USPAP Ethics and Competency 3 — Questions and Answers
Question 1: Under USPAP, 'impartiality' in the Ethics Rule means the appraiser must:
- Agree with the lender's value estimate
- Perform analysis without a predetermined conclusion (Correct answer)
- Use only government-approved data sources
- Limit scope of work to what the client requests
Correct answer: Perform analysis without a predetermined conclusion
Impartiality requires the appraiser to conduct analysis and form conclusions without predetermining the result or favoring any party.
Question 2: When must an appraiser disclose prior services performed on a property?
- Never, to protect confidentiality
- Only if the prior service was within three years
- Before accepting or within the appraisal report if services occurred within three years (Correct answer)
- Only if the client specifically asks
Correct answer: Before accepting or within the appraisal report if services occurred within three years
USPAP requires disclosure of any prior services on the subject property performed within the three years preceding the current assignment.
Question 3: Which of the following scenarios would require invoking the Competency Rule?
- Appraising a property type the appraiser has completed 50 times before
- Appraising a specialized industrial property the appraiser has never valued (Correct answer)
- Using the income approach for the first time in a report
- Using a software tool to run regression analysis
Correct answer: Appraising a specialized industrial property the appraiser has never valued
When an appraiser encounters a property type or geographic area outside their experience, the Competency Rule is triggered and must be addressed.
Question 4: What is the primary purpose of the Ethics Rule in USPAP?
- To set minimum education requirements for appraisers
- To ensure appraisers produce credible, unbiased value opinions (Correct answer)
- To establish fees that appraisers may charge
- To define state licensing requirements
Correct answer: To ensure appraisers produce credible, unbiased value opinions
The Ethics Rule is designed to ensure that appraisers maintain integrity and independence so their value opinions are credible and trustworthy.
Question 5: Can an appraiser accept a fee for recommending a specific appraiser to a client?
- Yes, with no restrictions
- Yes, but only if disclosed in the report
- No, referral fees for recommending appraisers are prohibited by USPAP (Correct answer)
- Yes, if approved by the state licensing board
Correct answer: No, referral fees for recommending appraisers are prohibited by USPAP
USPAP's Management section expressly prohibits appraisers from accepting fees for recommending a specific appraiser to a client.
Question 6: Under USPAP's Confidentiality section, which party is the appraiser permitted to share confidential assignment results with?
- Any member of the public upon request
- Only parties authorized by the client or law (Correct answer)
- Any licensed appraiser in the same firm
- The property owner without restriction
Correct answer: Only parties authorized by the client or law
Confidential assignment results may only be disclosed to parties authorized by the client or as required by law.
USPAP Ethics and Competency 3
Under USPAP, 'impartiality' in the Ethics Rule means the appraiser must: