Legal & Ethical Standards in Appraisal Flashcards
7 cards from real IACP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Legal & Ethical Standards in Appraisal flashcards as text
An appraisal management company (AMC) pressures an appraiser to remove a downward adjustment for a deteriorating neighborhood. The appraiser should:
Answer: Refuse and report the pressure to the appropriate state board if it persists
Yielding to pressure to alter conclusions violates independence; persistent coercion should be reported to the state appraiser regulatory board.
The concept of 'arms-length transaction' is critical in comparable selection because:
Answer: It confirms the sale was conducted under normal market conditions without duress
Arms-length transactions reflect market value because both parties acted prudently, without unusual motivation or duress.
Which federal law prohibits appraisers from discriminating based on racial composition of a neighborhood?
Answer: Fair Housing Act and Equal Credit Opportunity Act
The Fair Housing Act and ECOA prohibit appraisers from considering race, color, national origin, or other protected characteristics in valuation.
An appraiser who is asked to appraise a property type they have never appraised before should:
Answer: Disclose the lack of experience to the client and either acquire competency or decline
USPAP's Competency Rule requires disclosure of inexperience to the client prior to acceptance and a plan to acquire competency.
Under USPAP, the minimum record retention period for workfiles after delivery of the final opinion is:
Answer: 5 years
USPAP requires workfiles to be retained for at least five years after preparation or two years after final disposition of legal proceedings, whichever is longer.
A 'restricted appraisal report' under USPAP is appropriate when:
Answer: The intended users are limited to the client only
A Restricted Appraisal Report may be used only when the client is the sole intended user, as it contains minimal reporting detail.
When an appraiser provides a value opinion that is later found to be fraudulent, potential legal consequences include:
Answer: Criminal charges, civil liability, and license revocation
Appraisal fraud can result in criminal prosecution under federal wire/mail fraud statutes, civil damages, and revocation of state certification.