, Question 1
An appraiser is engaged to value a 200-unit apartment complex.
Mid-assignment, the client requests the appraiser ignore a recently discovered
environmental contamination that materially affects value. Under the
2024-2025 USPAP Ethics Rule, which action is required?
A. Comply with the client's request but disclose the omission in the
workfile only.
B. Decline to accept the assignment or withdraw, because the request
constitutes an unethical condition.
C. Complete the assignment and note the contamination only if the client
approves disclosure.
D. Reduce the scope of work to exclude environmental analysis and state
a hypothetical condition.
Correct Answer: B - Decline to accept the assignment or
withdraw, because the request constitutes an unethical condition.
RATIONALE
The Ethics Rule's Management section prohibits accepting an
assignment conditioned on the appraiser's agreeing to a predetermined
value or on the omission of material information that would mislead
intended users. Ignoring known contamination would produce a
misleading report, so the appraiser must decline or withdraw.
Disclosing only in the workfile or using a hypothetical condition
without client consent does not cure the ethical violation.
Question 2
An appraiser accepts a complex mixed-use assignment in a market where she
has no prior experience. Under the USPAP Competency Rule, which sequence
best satisfies the rule before accepting?
A. Accept, then disclose lack of experience in the certification and
proceed.
B. Decline all assignments lacking prior experience regardless of
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, available assistance.
C. Acquire competency through research, or associate with a competent
appraiser, or disclose the limitation and take steps to complete
competently.
D. Accept only if the client waives the Competency Rule in writing.
Correct Answer: C - Acquire competency through research, or
associate with a competent appraiser, or disclose the limitation
and take steps to complete competently.
RATIONALE
The Competency Rule permits an appraiser to accept an assignment
lacking initial competence if she acquires the necessary knowledge,
associates with a competent appraiser, or discloses the limitation and
takes steps to complete the assignment competently. Simply
disclosing without acquiring competency is insufficient. The
Competency Rule cannot be waived by the client.
Question 3
An appraiser is asked to appraise a property for a federally related transaction.
The client insists on a Restricted Appraisal Report to save time. Which
condition must be met under the 2024-2025 USPAP Standards Rule 2-2(b)?
A. The intended user is the client only, and the appraiser must state the
report's use is limited to that client.
B. The report must still include all information required by Standards
Rule 2-2(a) for an Appraisal Report.
C. The client must sign a waiver acknowledging the report is
non-compliant with USPAP.
D. The appraiser must obtain prior approval from the state appraisal
board.
Correct Answer: A - The intended user is the client only, and the
appraiser must state the report's use is limited to that client.
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, RATIONALE
A Restricted Appraisal Report is permitted only when the intended
user is the client alone (and any other users expressly identified). The
report must state the use is limited to that client, and the appraiser
must retain a workfile with sufficient supporting data. It need not
contain all 2-2(a) content, and no board approval is required.
Question 4
During an appraisal review of a commercial property report, the reviewer finds
the original appraiser used a capitalization rate unsupported by market
evidence. The reviewer's client asks for a value opinion on the property. Under
USPAP Standards Rules 3 and 4, what is the reviewer's obligation?
A. Provide the value opinion without commenting on the original report's
deficiencies.
B. Complete the review under Standards 3 and 4, and if also providing a
value opinion, comply with Standards 1 and 2 as a separate assignment.
C. Refuse to provide any value opinion because review and appraisal
cannot be combined.
D. Provide the value opinion under Standards 3 and 4 alone, since the
review already covers the analysis.
Correct Answer: B - Complete the review under Standards 3 and
4, and if also providing a value opinion, comply with Standards 1
and 2 as a separate assignment.
RATIONALE
A review is governed by Standards 3 and 4. If the reviewer also
develops and reports a value opinion, that constitutes an appraisal,
requiring compliance with Standards 1 and 2. The reviewer may
combine them but must clearly comply with both sets of Standards.
Refusing is not required, and Standards 3-4 alone do not authorize a
value opinion.
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An appraiser is engaged to value a 200-unit apartment complex.
Mid-assignment, the client requests the appraiser ignore a recently discovered
environmental contamination that materially affects value. Under the
2024-2025 USPAP Ethics Rule, which action is required?
A. Comply with the client's request but disclose the omission in the
workfile only.
B. Decline to accept the assignment or withdraw, because the request
constitutes an unethical condition.
C. Complete the assignment and note the contamination only if the client
approves disclosure.
D. Reduce the scope of work to exclude environmental analysis and state
a hypothetical condition.
Correct Answer: B - Decline to accept the assignment or
withdraw, because the request constitutes an unethical condition.
RATIONALE
The Ethics Rule's Management section prohibits accepting an
assignment conditioned on the appraiser's agreeing to a predetermined
value or on the omission of material information that would mislead
intended users. Ignoring known contamination would produce a
misleading report, so the appraiser must decline or withdraw.
Disclosing only in the workfile or using a hypothetical condition
without client consent does not cure the ethical violation.
Question 2
An appraiser accepts a complex mixed-use assignment in a market where she
has no prior experience. Under the USPAP Competency Rule, which sequence
best satisfies the rule before accepting?
A. Accept, then disclose lack of experience in the certification and
proceed.
B. Decline all assignments lacking prior experience regardless of
Page 2
, available assistance.
C. Acquire competency through research, or associate with a competent
appraiser, or disclose the limitation and take steps to complete
competently.
D. Accept only if the client waives the Competency Rule in writing.
Correct Answer: C - Acquire competency through research, or
associate with a competent appraiser, or disclose the limitation
and take steps to complete competently.
RATIONALE
The Competency Rule permits an appraiser to accept an assignment
lacking initial competence if she acquires the necessary knowledge,
associates with a competent appraiser, or discloses the limitation and
takes steps to complete the assignment competently. Simply
disclosing without acquiring competency is insufficient. The
Competency Rule cannot be waived by the client.
Question 3
An appraiser is asked to appraise a property for a federally related transaction.
The client insists on a Restricted Appraisal Report to save time. Which
condition must be met under the 2024-2025 USPAP Standards Rule 2-2(b)?
A. The intended user is the client only, and the appraiser must state the
report's use is limited to that client.
B. The report must still include all information required by Standards
Rule 2-2(a) for an Appraisal Report.
C. The client must sign a waiver acknowledging the report is
non-compliant with USPAP.
D. The appraiser must obtain prior approval from the state appraisal
board.
Correct Answer: A - The intended user is the client only, and the
appraiser must state the report's use is limited to that client.
Page 3
, RATIONALE
A Restricted Appraisal Report is permitted only when the intended
user is the client alone (and any other users expressly identified). The
report must state the use is limited to that client, and the appraiser
must retain a workfile with sufficient supporting data. It need not
contain all 2-2(a) content, and no board approval is required.
Question 4
During an appraisal review of a commercial property report, the reviewer finds
the original appraiser used a capitalization rate unsupported by market
evidence. The reviewer's client asks for a value opinion on the property. Under
USPAP Standards Rules 3 and 4, what is the reviewer's obligation?
A. Provide the value opinion without commenting on the original report's
deficiencies.
B. Complete the review under Standards 3 and 4, and if also providing a
value opinion, comply with Standards 1 and 2 as a separate assignment.
C. Refuse to provide any value opinion because review and appraisal
cannot be combined.
D. Provide the value opinion under Standards 3 and 4 alone, since the
review already covers the analysis.
Correct Answer: B - Complete the review under Standards 3 and
4, and if also providing a value opinion, comply with Standards 1
and 2 as a separate assignment.
RATIONALE
A review is governed by Standards 3 and 4. If the reviewer also
develops and reports a value opinion, that constitutes an appraisal,
requiring compliance with Standards 1 and 2. The reviewer may
combine them but must clearly comply with both sets of Standards.
Refusing is not required, and Standards 3-4 alone do not authorize a
value opinion.
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