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Oregon Bulletin

March 1, 2013

Department of State Lands, Chapter 141

Rule Caption: Modification of land sale appraisal procedures for properties with an estimated value less than $100,000

Adm. Order No.: DSL 1-2013

Filed with Sec. of State: 2-14-2013

Certified to be Effective: 3-1-13

Notice Publication Date: 10-1-2012

Rules Amended: 141-067-0310

Subject: The 2012 Real Estate Asset Management Plan identifies the strategy of disposing of lower performing property and reinvesting in higher performing property. The Department owns a number of low potential sale properties that are worth less than $100,000. The average cost of preparing a non-timbered parcel for sale ranges from $2,000 to $2,500 and includes cultural survey, endangered species study and appraisal. Appraisals typically make up 75-80% of these costs. With low-valued parcels, the cost of the due diligence studies added to the market estimate of the property can raise the price of the property beyond its market appeal. The Land Board authorized staff to investigate this rules changes at its meeting of December 13, 2011.

 The Department proposes to amend the rules to allow in-house summary appraisals that would not meet Uniform Standards of Professional Appraisal Practice (USPAP) standards, as is allowed under ORS 674.100. The appraisal would include a brief description of the property, highest and best use conclusion, sales comparison approach, based on area sales and value conclusion. The rules change would be consistent with DAS rules for disposal of parcels of less than or equal to $100,000 (OAR 125-045-0215). The new rules allow a “desk appraisal” or a “letter opinion of value”, and provide descriptions of the content of a desk appraisal and a letter opinion of value. The rules affecting appraisals of properties valued greater than $100,000 would not be impacted by this rules change.

Rules Coordinator: Tiana Teeters—(503) 986-5239

141-067-0310

General Requirements for Appraisals

(1) Appraisals conducted for land sales, purchases or exchanges shall comply with the following requirements:

(a) Be conducted by a State of Oregon-licensed appraiser familiar with the type of property to be appraised and in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) standards.

(b) Unless directed otherwise by the Department, the appraisal shall estimate the fair market value of the property based on its highest and best use, taking into account the contributory value of all offered interests in the property such as water rights, minerals, or timber to the extent that such interests are consistent with the highest and best use of the property.

(c) The appraisal report must include sufficient description of the property, highest and best use analysis, valuation methodology and support materials to fully document and justify the appraiser’s estimate of fair market value.

(d) The Department may, based on the particular use of the appraisal, impose additional requirements or conditions on the appraisal.

(2) For land sales, purchases or exchanges where the estimated fair market value of the lands or interest in lands is $100,000 or less, the Department may utilize a “desk appraisal” or a “letter opinion of value” as the Appraisal required under these rules.

(3) For purposes of this section, a “desk appraisal” is a written statement setting forth an opinion as to the market value of the lands or interest in lands as of a specific date. A desk appraisal conducted for land sales, purchases or exchanges shall comply with the following requirements:

(a) The desk appraisal must be conducted by an employee of the Department. A desk appraisal need not be prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), as desk appraisals performed by an employee of the Department are not required to be performed by State of Oregon-licensed appraiser pursuant to ORS 674.100(2)(h).

(b) Unless directed otherwise by the Department, the desk appraisal shall estimate the fair market value of the property based on its highest and best use, taking into account the contributory value of all offered interests in the property such as water rights, minerals, or timber to the extent that such interests are consistent with the highest and best use of the property.

(c) The desk appraisal must include a sufficient description of the characteristics of the property, a highest and best use analysis, a description of the valuation methodology, and a description of the support materials utilized to fully document and justify the estimate of fair market value. The description of the characteristics of the property, and description of the characteristics of properties used as comparison to the property, may be based on aerial and topographic photographs and maps and on generally accepted property data resources, such as the United States Department of Agriculture — Natural Resources Conservation Service, county assessor tax lot information, multiple listing services, and similar resources. Field inspections of the property and of the properties used as comparison to the property are not required as part of the desk appraisal.

(4) For purposes of this section, a “letter opinion of value” is a written statement from a real estate professional licensed under ORS 696 setting forth an opinion as to the market value of the lands prepared in accordance with the requirements of OAR 863-015-0190(3).

Stat. Auth.: OAR 141-167-0005 - 141-067-0120, 125-045, ORS 270.005 - 270.190, 273.045, 273.245 - 273.247, 273.251 - 273.311, 273.316 - 273.321, 273.413 - 273.456, 274.040, 274.905 - 274.940, 274.960 - 274.985
Stats. Implemented: OAR 141-167-0005 - 141-067-0120, 125-045, ORS 270.005 - 270.190, 273.045, 273.245 - 273.247, 273.251 - 273.311, 273.316 - 273.321, 273.413 - 273.456, 274.040, 274.905 - 274.940, 274.960 - 274.985
Hist.: DSL 2-2002, f. 4-12-02, cert. ef. 7-1-02; DSL 6-2009, f. & cert. ef. 7-1-09; DSL 1-2013, f. 2-14-13, cert. ef. 3-1-13

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2012.

2.) Copyright 2013 Oregon Secretary of State: Terms and Conditions of Use

Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722
Phone: (503) 986-1523 • Fax: (503) 986-1616 • oregon.sos@state.or.us

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