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Antiques

Minding the Hen House
Professional Standards for Art and Antiques Appraisers

New Minimum Professional Qualifications Standards are Set for an Unregulated Industry

The profession of appraising art and antiques has long been challenged by conflicts of interest and lack of regulatory oversight and requirements. In fact, most countries who have firm standards in place for the appraisal of real property, fall short in regulating their personal property appraisers. Given the substantial financial decisions reliant on appraisal services, it seems that the dangers of hiring a professional in this wholly unregulated field would be difficult to overstate.

Where does this leave consumers? In the United States, The Appraisal Foundation, an agency funded by, but not empowered by Congress, issues the only recognized set of guidelines: The Uniform Standards of Professional Appraisal Practice (USPAP). USPAP was developed for real estate appraisers, but is also the source of generally accepted standards and ethics for personal property appraisers throughout much of the world. The guidelines address ethical considerations such as bias and conflicts of interest, as well as standards for the research and development of an appraisal assignment.

USPAP is the lowest accepted industry threshold, setting minimum ethics development standards. In addition to USPAP, in 1998, the Appraisal Foundation's Appraisers Qualifications Board (AQB) developed voluntary minimum qualifications for personal property appraisers. This standard has been in the long, painful process of proposed revision, exposure and comment since 2010. The new standard is poised to be effective early in 2015 and can be found here:

https://appraisalfoundation.sharefile.com/download.aspx?id=s928559899ec4f81b

The document is complex and confusing and offers some equivalency options not listed here. Highlights of the Proposed Criteria:

* The requirements are not voluntary for members of Sponsoring organizations, which include the three largest appraisal societies in the USA: ISA, AAA, and ASA

* USPAP Training and Compliance, including passing an examination taught by an AQB-Certified Instructor, and a 7 hr update class every two years

* Successful completion, including qualifying examination, of 120 creditable classroom hours of Personal Property specific education

* 45 hours of the above classroom instruction must be in Appraisal Valuation Theory and Methodology specific to the appraisal of personal property

* 700 hours of documented personal property appraisal writing experience

* Significant market experience with the type of property to be appraised, roughly equivalent to 2.5 full-time years. The wording for this section is so complex and confusing that a broad range of interpretations are likely to be adopted by sponsoring organizations.

* 70 hours of continuing education during each five (5) year period preceding credential renewal. Twenty (20) hours of which must be in coursework related to valuation theory.

* An Associate's Degree or Equivalent Undergraduate Education

Consumers of appraisal services should be happy that more strident standards will be in place for personal property appraisers, right? Well, the new standards are not without controversy. Some of the concerns about the criteria are listed below. As these standards will be revisited in as little as two years, I've also suggested some solutions for the next round.

* Concern: The proposed Associate Degree requirement is not relevant to appraiser competency and creates an artificial barrier to the profession. In contrast to real property appraisers, the competency of personal property appraisers is drawn much more heavily from years of market experience and resultant connoisseurship, necessary to expertly identify, qualify and differentiate a variety of properties. This criterion risks the unintended result of effectively lowering industry standards by removing otherwise better qualified and more experienced individuals from the industry. Most at risk might be those with multi-generational experience and invaluable family mentorship such as auctioneers, gallery directors, or antique dealers.

Possible Solution:

The thinking for adding this criteria is two-fold. One is the desire to ensure reports are professionally presented and literate. The second is to advance the perceived professionalism of the industry. This requirement however, guarantees neither. Unfortunately, an Associate's Degree is no guarantee of literacy, and long-standing market exposure and coursework in appraisal methodology are markedly more relevant to competent appraisal results than an unrelated degree. Peer-review of reports prior to accreditation, as suggested below, would be a more effective measure of the appraiser's ability to produce professionally prepared reports.

* The proposed educational requirements are too specific and standardized to account for the inherent diversity in the personal property appraisal profession. Personal property appraisers, (unlike real property appraisers), reflect a diverse range of practice, from full-time appraisers specializing in a narrow or highly-specialized field of expertise to estate sale professionals supplementing their income as part-time appraisers of general household contents.

Possible solution:

Retain the required minimum theory and methodology coursework. Allow sponsoring organizations more leeway in the allotment of education and experience training in order to allow customization of appropriate pathways for various areas of specialization and levels of credentialing.

* The proposed criteria are open to subjective interpretation. The wording is so complex and cumbersome that the leadership of the sponsoring organizations are consulting to understand what they mean.

Possible solution:

If the purpose of enacting standards is to raise professional standards and increase public trust, this document needs to be less complex and more clearly written to ensure that all readers will have a consistent interpretation.

* The proposed criteria does not include peer-review of complex appraisal report assignments. Despite significant training and experience, some appraisers are unskilled in the presentation and reporting of their results, and fail to present transparent, credible analysis.

Possible solution:

Peer-review, accomplished by a panel of members who have obtained the highest level of credentialing, is required at the lowest level of the credentialing process by most of the professional organizations. This should be incorporated into the minimum criteria.

On the right track

The Appraisal Foundation is on the right track in going beyond USPAP in developing minimum standards for professional art and antiques appraisers. However, the longstanding bent toward standards which were developed for the real estate industry has not been completely overcome in this version.We need to go a bit further in considering feedback from the most professional of the appraisal societies to ensure the criteria are fully relevant to producing competent appraisers, and do not create artificial barriers to the profession.

I would like to take this opportunity to invite all appraisers and interested parties to discuss these new proposed standards and their effects, by way of sharing your own opinions and thoughts, in the comment boxes below. Thank you.