Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017 Page: 5,936
This periodical is part of the collection entitled: Texas Register and was provided to The Portal to Texas History by the UNT Libraries Government Documents Department.
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(g) All Applicants shall acknowledge, by virtue of filing an
Application, that the Department shall not be bound by any such opin-
ion or Market Analysis, and may substitute its own analysis and under-
writing conclusions for those submitted by the Market Analyst.
10.304. Appraisal Rules and Guidelines.
(a) General Provision. An appraisal prepared for the Depart-
ment must conform to the Uniform Standards of Professional Appraisal
Practice (USPAP) as adopted by the Appraisal Standards Board of the
Appraisal Foundation. The appraisal must include a statement that the
report preparer has read and understood the requirements of this sec-
tion. The appraisal must include a statement that the person or company
preparing the appraisal is a disinterested party and will not materially
benefit from the Development in any other way than receiving a fee for
performing the appraisal and that the fee is in no way contingent upon
the outcome of the appraisal.
(b) Self-Contained. An appraisal prepared for the Department
must describe sufficient and adequate data and analyses to support the
final opinion of value. The final value(s) must be reasonable, based on
the information included. Any Third Party reports relied upon by the
appraiser must be verified by the appraiser as to the validity of the data
and the conclusions.
(c) Appraiser Qualifications. The qualifications of each ap-
praiser are determined on a case-by-case basis by the Director of Real
Estate Analysis or review appraiser, based upon the quality of the report
itself and the experience and educational background of the appraiser.
At minimum, a qualified appraiser must be appropriately certified or
licensed by the Texas Appraiser Licensing and Certification Board.
(d) Appraisal Contents. An appraisal prepared for the Depart-
ment must be organized in a format that follows a logical progression.
In addition to the contents described in USPAP Standards Rule 2, the
appraisal must include items addressed in paragraphs (1) - (12) of this
subsection.
(1) Title Page. Include a statement identifying the Depart-
ment as the client, acknowledging that the Department is granted full
authority to rely on the findings of the report, and name and address of
person authorizing report.
(2) Letter of Transmittal. Include reference to accompany-
ing appraisal report, reference to all person(s) that provided significant
assistance in the preparation of the report, date of report, effective date
of appraisal, date of property inspection, name of person(s) inspect-
ing the property, tax assessor's parcel number(s) of the site, estimate of
marketing period, and signatures of all appraisers authorized to work
on the assignment including the appraiser who inspected the property.
Include a statement indicating the report preparer has read and under-
stood the requirements of this section.
(3) Table of Contents. Number the exhibits included with
the report for easy reference.
(4) Disclosure of Competency. Include appraiser's qualifi-
cations, detailing education and experience.
(5) Statement of Ownership of the Subject Property. Dis-
cuss all prior sales of the subject Property which occurred within the
past three (3) years. Any pending agreements of sale, options to buy, or
listing of the subject Property must be disclosed in the appraisal report.
(6) Property Rights Appraised. Include a statement as to
the property rights (e.g., fee simple interest, leased fee interest, lease-
hold, etc.) being considered. The appropriate interest must be defined
in terms of current appraisal terminology with the source cited.
(7) Site/Improvement Description. Discuss the site char-
acteristics including subparagraphs (A) - (E) of this paragraph.(A) Physical Site Characteristics. Describe dimensions,
size (square footage, acreage, etc.), shape, topography, corner influ-
ence, frontage, access, ingress-egress, etc. associated with the Devel-
opment Site. Include a plat map and/or survey.
(B) Floodplain. Discuss floodplain (including flood
map panel number) and include a floodplain map with the subject
Property clearly identified.
(C) Zoning. Report the current zoning and description
of the zoning restrictions and/or deed restrictions, where applicable,
and type of Development permitted. Any probability of change in zon-
ing should be discussed. A statement as to whether or not the improve-
ments conform to the current zoning should be included. A statement
addressing whether or not the improvements could be rebuilt if dam-
aged or destroyed, should be included. If current zoning is not consis-
tent with the highest and best use, and zoning changes are reasonable to
expect, time and expense associated with the proposed zoning change
should be considered and documented. A zoning map should be in-
cluded.
(D) Description of Improvements. Provide a thorough
description and analysis of the improvements including size (Net
Rentable Area, gross building area, etc.), number of stories, number of
buildings, type/quality of construction, condition, actual age, effective
age, exterior and interior amenities, items of deferred maintenance,
energy efficiency measures, etc. All applicable forms of depreciation
should be addressed along with the remaining economic life.
(E) Environmental Hazards. It is recognized apprais-
ers are not experts in such matters and the impact of such deficiencies
may not be quantified; however, the report should disclose any poten-
tial environmental hazards (such as discolored vegetation, oil residue,
asbestos-containing materials, lead-based paint etc.) noted during the
inspection.
(8) Highest and Best Use. Market Analysis and feasibility
study is required as part of the highest and best use. The highest and
best use analysis should consider paragraph (7)(A) - (E) of this subsec-
tion as well as a supply and demand analysis.
(A) The appraisal must inform the reader of any posi-
tive or negative market trends which could influence the value of the
appraised Property. Detailed data must be included to support the ap-
praiser's estimate of stabilized income, absorption, and occupancy.
(B) The highest and best use section must contain a sep-
arate analysis "as if vacant" and "as improved" (or "as proposed to be
improved/renovated"). All four elements (legally permissible, physi-
cally possible, feasible, and maximally productive) must be considered.
(9) Appraisal Process. It is mandatory that all three ap-
proaches, Cost Approach, Sales Comparison Approach and Income
Approach, are considered in valuing the Property. If an approach is
not applicable to a particular property an adequate explanation must be
provided. A land value estimate must be provided if the Cost Approach
is not applicable.
(A) Cost Approach. This approach should give a clear
and concise estimate of the cost to construct the subject improvements.
The source(s) of the cost data should be reported.
(i) Cost comparables are desirable; however, alter-
native cost information may be obtained from Marshall & Swift Val-
uation Service or similar publications. The section, class, page, etc.
should be referenced. All soft costs and entrepreneurial profit must be
addressed and documented.42 TexReg 5936 October 27, 2017 Texas Register
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Texas. Secretary of State. Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017, periodical, October 27, 2017; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth897027/m1/24/?q=%22%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.