An appraiser is asked for a retrospective value opinion as of three years ago. When must the appraiser meet the Competency Rule?
Correct Answer
A) At the time the assignment is performed
For assignments with retrospective opinions and conclusions, USPAP requires the appraiser to meet the Competency Rule at the time the assignment is performed, not as of the earlier effective date.
Why This Is the Correct Answer
Option A is correct because, for assignments with retrospective opinions and conclusions, USPAP requires the appraiser to meet the Competency Rule at the time the assignment is performed. The appraiser must have the knowledge and experience needed to complete the work competently now, even though the value is as of three years ago.
Why the Other Options Are Wrong
Option B: As of the retrospective effective date three years ago
Option B is wrong because it ties competency to the retrospective effective date three years ago. USPAP requires competency at the time the assignment is performed, not as of the earlier effective date of the value opinion.
Option C: Only if the client requests a competency disclosure
Option C is wrong because it makes competency apply only if the client requests a competency disclosure. The Competency Rule is an obligation on the appraiser in the assignments it covers, regardless of any client request.
Option D: Competency does not apply to retrospective assignments
Option D is wrong because it claims competency does not apply to retrospective assignments. USPAP specifically addresses retrospective assignments and requires the appraiser to meet the Competency Rule when the work is performed.
Competent when you work
The value date can look backward, but your skills are tested on the day you do the work. Competency is a 'now' requirement.
How to use: Use this phrase whenever a question pairs a retrospective effective date with a competency requirement.
Exam Tip
Separate the effective date of the opinion from the date the work is performed. For retrospective assignments, competency is measured when the assignment is performed.
Common Mistakes to Avoid
- -Measuring competency as of the retrospective effective date
- -Believing competency applies only on client request
- -Assuming retrospective assignments are exempt from the Competency Rule
Concept Deep Dive
Analysis
This question tests when USPAP competency must be met for an assignment with a past effective date. The effective date of the value opinion and the time the work is done are different things. USPAP ties competency to when the assignment is performed.
Background Knowledge
The USPAP Competency Rule requires an appraiser to be competent to perform an assignment, or to acquire the necessary competency, before or while completing it. A retrospective appraisal has an effective date in the past, but the appraiser performs the analysis in the present, so the required competency is measured at that time.
Real-World Application
An estate attorney asks an appraiser for a home's value as of a death three years ago. The appraiser, who recently began working in that county, must have or acquire the geographic and market knowledge needed to analyze that past market before completing the assignment now.
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