A Restricted Appraisal Report may be used when:
Correct Answer
B) When the client is the only intended user or other users are named
A restricted format can be used only when its content suits the assignment and provides sufficient information to its permitted users. The client and any additional intended users must be appropriately identified, with additional users named. Complexity or a low fee alone neither authorizes nor prohibits the format.
Why This Is the Correct Answer
Option B is correct because USPAP states that a Restricted Appraisal Report may be provided when the client is the only intended user, or when additional intended users are identified by name. The format must still suit the assignment and give sufficient information to its users. That intended-user condition is what permits the option.
Why the Other Options Are Wrong
Option A: When the lower fee alone justifies the shorter report option
Option A is wrong because a lower fee alone does not justify the shorter report option; the permission depends on who the intended users are.
Option C: Never for complex property, since property complexity always prohibits it
Option C is wrong because property complexity does not by itself prohibit a Restricted Appraisal Report; the rule turns on intended users and whether the content suits the assignment.
Option D: Always for mortgage lending, since lenders require this option
Option D is wrong because USPAP does not require the restricted option for mortgage lending, and lenders do not uniformly require it; the claim that it applies to all mortgage lending is unsupported.
Restricted equals restricted users
The word restricted points to the users: only the client, or others identified by name.
How to use: Use this when a question asks under what condition a Restricted Appraisal Report may be used.
Exam Tip
Look for the intended-user condition; options based on fee, complexity or a blanket lending rule miss the test.
Common Mistakes to Avoid
- -Choosing the restricted option because the fee is low
- -Thinking complex properties can never use the restricted option
- -Allowing unnamed third parties as intended users of a restricted report
Concept Deep Dive
Analysis
This question tests when a Restricted Appraisal Report is permitted. The controlling condition concerns the intended users: the client alone, or additional users identified by name. Fee, complexity and lender type do not decide the question.
Background Knowledge
The Restricted Appraisal Report has lower content requirements than the Appraisal Report and may not be understandable without the workfile. Because of this, it is limited to the client or named intended users. Development requirements remain the same under either reporting option.
Real-World Application
An attorney needs a value opinion for internal settlement planning and will be the only user. The appraiser may provide a Restricted Appraisal Report, identifying the attorney as the sole intended user.
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