An appraiser discovers mid-assignment that the property has a complex ground lease she does not know how to analyze. What does USPAP require?
Correct Answer
C) Notify the client and take steps to achieve competency, or withdraw
Why this is correct: The Competency Rule applies throughout the assignment. Upon discovering a competency gap, the appraiser must notify the client and then either take steps to achieve the necessary competency (e.g., research, bring in help) or withdraw from the assignment. Why the other choices are wrong: Immediate withdrawal is one option, but achieving competency is also allowed. Valuing as if the lease did not exist would be misleading. A boilerplate disclaimer does not fulfill the duty to address the competency gap. Exam tip: Competency is a continuous duty. If you get stuck mid-assignment, inform the client and fix the gap or quit.
Why This Is the Correct Answer
Why this is correct: The Competency Rule applies throughout the assignment. Upon discovering a competency gap, the appraiser must notify the client and then either take steps to achieve the necessary competency (e.g., research, bring in help) or withdraw from the assignment. Why the other choices are wrong: Immediate withdrawal is one option, but achieving competency is also allowed. Valuing as if the lease did not exist would be misleading. A boilerplate disclaimer does not fulfill the duty to address the competency gap. Exam tip: Competency is a continuous duty. If you get stuck mid-assignment, inform the client and fix the gap or quit.
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
If an appraiser uses a hypothetical condition that the subject property is 10% larger than it actually is, this must be:
Under Standard 1, when developing a real property appraisal, an appraiser must:
An appraiser accepts an assignment to appraise a specialized industrial property but has never appraised this property type before. To comply with the Competency Rule, the appraiser:
According to the Scope of Work Rule, the scope of work must be appropriate to the:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
A lender emails: 'We need at least $450,000 to make this loan work — can you take the assignment?' Accepting on that basis is:
An appraiser is developing an opinion of market value for a 20-unit apartment building. The appraiser finds three comparable sales with the following information: Sale 1: 18 units, sold for $1,800,000; Sale 2: 22 units, sold for $2,200,000; Sale 3: 24 units, sold for $2,280,000. What is the average price per unit for these comparables?
In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
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