USPAP Ethics and Competency 1 — Questions and Answers
Question 1: Under USPAP's Ethics Rule, which obligation must an appraiser fulfill to maintain independence?
- Disclose all fees to the client
- Perform assignments without advocacy for any party (Correct answer)
- Obtain state certification in every jurisdiction
- Submit reports to a review appraiser
Correct answer: Perform assignments without advocacy for any party
USPAP's Ethics Rule requires appraisers to perform assignments without bias or advocacy to preserve independence.
Question 2: Which section of the USPAP Ethics Rule addresses receiving and paying fees?
- Conduct section
- Management section (Correct answer)
- Confidentiality section
- Record Keeping section
Correct answer: Management section
The Management section of the Ethics Rule governs the business practices related to accepting and paying fees, including referral fees.
Question 3: An appraiser who lacks the knowledge and experience to complete an assignment competently must do which of the following?
- Decline the assignment immediately
- Disclose the lack of competency, take steps to acquire competency, or associate with a competent appraiser (Correct answer)
- Complete the assignment and note limitations in the report
- Request peer review before accepting
Correct answer: Disclose the lack of competency, take steps to acquire competency, or associate with a competent appraiser
USPAP's Competency Rule requires disclosure of any lack of competency and mandates taking steps to resolve it before or during the assignment.
Question 4: Under the Confidentiality section of the Ethics Rule, an appraiser may NOT disclose confidential information without client permission EXCEPT to:
- Another potential client
- A party paying a referral fee
- State enforcement agencies when legally required (Correct answer)
- The property owner
Correct answer: State enforcement agencies when legally required
USPAP permits disclosure of confidential information to state enforcement agencies as required by law, even without client consent.
Question 5: Which of the following would be considered a violation of the Ethics Rule's Conduct section?
- Using a trainee to assist with fieldwork
- Accepting an assignment with a contingent fee based on the outcome (Correct answer)
- Disclosing the scope of work to the client
- Including comparable sales in the report
Correct answer: Accepting an assignment with a contingent fee based on the outcome
Accepting a contingent fee that depends on the outcome of the appraisal violates USPAP's Conduct section because it impairs independence.
Question 6: How long must an appraiser retain work files under the USPAP Record Keeping Rule after the date of the report?
- 1 year
- 3 years
- 5 years (Correct answer)
- 7 years
Correct answer: 5 years
USPAP's Record Keeping Rule requires appraisers to retain work files for at least five years after the date of the report or two years after final disposition of legal proceedings, whichever is longer.
USPAP Ethics and Competency 1
Under USPAP's Ethics Rule, which obligation must an appraiser fulfill to maintain independence?