A Certified General appraiser is asked to value a specialized industrial property for the first time. The appraiser knows a competency gap exists before agreeing to the assignment. What is required if the appraiser proceeds?
Correct Answer
D) Disclose the gap before agreeing, acquire the needed competence and describe the steps in the report.
A legally authorized appraiser may acquire assignment-specific competency. When the gap is known before agreeing, disclose it to the client before agreeing, take the steps needed to complete the work competently, and describe the gap and those steps in the report. Disclosure alone does not make unfamiliar methods appropriate. If competency cannot be achieved, decline or withdraw; competency acquisition does not enlarge the legal scope of a credential.
Why This Is the Correct Answer
Option D is correct because, when an appraiser determines before agreeing that he or she is not competent, the Competency Rule requires disclosing the lack of knowledge or experience to the client before agreeing. The appraiser must then take all steps necessary or appropriate to complete the assignment competently. Finally, the report must describe the lack of knowledge or experience and the steps taken.
Why the Other Options Are Wrong
Option A: Decline the assignment, because competency for a new property type cannot be acquired during it.
Option A says to decline because competency for a new property type cannot be acquired during the assignment. The Competency Rule allows an appraiser to acquire competency through the required steps, so declining is not the only option.
Option B: Disclose the gap when delivering the report, after performing the unfamiliar work.
Option B says to disclose the gap when delivering the report, after performing the unfamiliar work. When the gap is known beforehand, disclosure must occur before agreeing to perform the assignment, not at delivery.
Option C: Use familiar residential methods without establishing that they suit the industrial property.
Option C says to use familiar residential methods without establishing that they suit the industrial property. Competent performance requires methods appropriate to the property, and disclosure does not make unsuitable methods acceptable.
Tell, Learn, Describe
Tell the client before agreeing, learn what is needed to do the work competently, and describe the gap and steps in the report. The order matters.
How to use: Use this three-step sequence when a question involves a competency gap known before engagement.
Exam Tip
Pay attention to timing: a known gap is disclosed before agreeing, not at delivery. All three steps are needed.
Common Mistakes to Avoid
- -Disclosing a known competency gap only at report delivery
- -Assuming disclosure alone satisfies the Competency Rule
- -Believing competency for a new property type cannot be acquired
Concept Deep Dive
Analysis
This question tests the steps required when an appraiser knows of a competency gap before agreeing to an assignment. The Competency Rule requires disclosure to the client before agreeing, taking all steps necessary to complete the assignment competently, and describing the gap and steps in the report. Candidates should watch for answers that get the timing wrong or treat disclosure as a substitute for competent work.
Background Knowledge
The Competency Rule lets appraisers expand into new assignment types while protecting clients. The three steps, prior disclosure, acquiring competency and reporting the steps, keep the client informed and the work credible. Acquiring assignment competency does not enlarge the legal scope of an appraiser's credential, and if competency cannot be achieved the appraiser should decline or withdraw.
Real-World Application
A certified general appraiser is asked to value a specialized manufacturing plant for the first time. Before agreeing, he tells the client about his limited experience with that property type. He then partners with an appraiser experienced in industrial properties and describes this arrangement in his report.
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