La. Admin. Code tit. 70 § XVII-537

Current through Register Vol. 50, No. 11, November 20, 2024

Section XVII-537 - Role of the Cost Consultant (Formerly Section 533)

A. Quite often it becomes necessary for the Appraisal Office to contract the services of individuals other than appraisal experts. More often than not those persons are cost consultants. These consultants are those who are trained and/or experienced in the construction industry with knowledge of and access to construction costs and related areas of expertise. The consultant may be asked to provide such items as reproduction and replacement costs, cost to cure items damaged by the required acquisition or costs for comparison purposes which would not be included within an appraisal report. The cost consultant is there to provide a service to the appraiser and LDOTD and should provide costs as requested and in conjunction with all other consultants that will utilize the estimate. The cost consultant is responsible to the project review appraiser as well as the appraiser(s) of record.

B. The cost consultant is to work hand in hand with the appraiser and review appraiser. Although he is the most qualified to judge construction costs, the appraiser is the person responsible for all values used within the appraisal report.

C. Just like the appraiser, the cost consultant is required to contact all property owners and allow them the opportunity to accompany the consultant during the property inspection. In the case of the cost consultant, it is absolutely necessary to inspect all improvements due to the nature of the assignment. Only in very rare situations would it be possible to complete a consultant assignment without, at least, a rudimentary inspection of improvements. This would only be acceptable when an owner refuses entrance upon the subject site or within the subject improvements.

D. As mentioned earlier, the responsibility for the use of a cost estimate, whether replacement cost, reproduction cost, cost to cure or other cost assignment belongs to the appraiser. Therefore, it is absolutely necessary that the appraiser and the cost consultant work together. The cost consultant is responsible for the estimated costs where reproduction and replacement is concerned.

E. However, he and the appraiser must agree on the factual data such as the size of the improvement, location upon the site, minor improvements, etc. When a cost to cure is required, the cost consultant must provide a method of cure that is agreeable to both the appraiser and review appraiser in order for the assignment to be considered as acceptable and payment made. Therefore, the cost consultant and the appraiser(s) should inspect the subject property together, if possible, and at the least confer and compare factual data and proposed cures prior to submission of the contracted estimate for review. The provided reports shall contain a breakdown of the components required in a reproduction, replacement or cost to cure estimate and will quote a source of justification for said costs. Utilization of Marshall and Swift only is not acceptable. Therefore, when the costs provided are utilized by the appraiser, it is required that the cost consultant's report be included within the appraisal report.

F. The appraiser, as the one ultimately responsible for the costs quoted within his/her report will contact the review appraiser should a provided cost estimate not be suitable for inclusion within an appraisal report. However, the review appraiser should have made a determination prior to receipt of said report by the appraiser. The review appraiser will then contact the consultant and discuss the situation and the appraiser's concerns. Should it be found that revision is warranted, the cost consultant will be responsible for that revision. Payment for services rendered will be withheld until such time as acceptable revisions or corrections are submitted.

La. Admin. Code tit. 70, § XVII-537

Promulgated by the Department of Transportation and Development, Office of Real Estate, LR 25:887 (May 1999), amended LR 33:1375 (July 2007).

AUTHORITY NOTE: Promulgated in accordance with R.S. 48:443.