An appraiser is asked to complete an assignment using only the cost approach due to a local regulation, even though USPAP would normally require consideration of all three approaches. This situation would require:
Correct Answer
B) Invoking a jurisdictional exception
Why this is correct: When a legal requirement (here, a local regulation) directly conflicts with a USPAP requirement (to consider all applicable approaches), the appraiser may invoke a jurisdictional exception. This allows compliance with the law while disclosing the departure from USPAP. Why the other choices are wrong: 'Declining the assignment' is not necessary if the exception is properly invoked. 'Using all three approaches despite the regulation' would violate the law. 'Following the client's instructions' is wrong if the instruction is not based on a legal requirement. Exam tip: Law vs. USPAP conflict? Use Jurisdictional Exception, disclose it clearly.
Why This Is the Correct Answer
Why this is correct: When a legal requirement (here, a local regulation) directly conflicts with a USPAP requirement (to consider all applicable approaches), the appraiser may invoke a jurisdictional exception. This allows compliance with the law while disclosing the departure from USPAP. Why the other choices are wrong: 'Declining the assignment' is not necessary if the exception is properly invoked. 'Using all three approaches despite the regulation' would violate the law. 'Following the client's instructions' is wrong if the instruction is not based on a legal requirement. Exam tip: Law vs. USPAP conflict? Use Jurisdictional Exception, disclose it clearly.
Why the Other Options Are Wrong
The Legal Override Rule
Remember 'JED' - Jurisdictional Exception Disclosure. When law conflicts with USPAP: Justify the legal requirement, Exception must be invoked, Disclose it clearly in the report.
How to use: When you see a question about conflicting legal requirements vs. USPAP, think 'JED' and look for the answer that involves invoking and disclosing a jurisdictional exception rather than simply following instructions or declining the assignment.
Exam Tip
Look for keywords like 'local regulation,' 'legal requirement,' or 'law requires' combined with USPAP conflicts - these signal jurisdictional exception questions.
Common Mistakes to Avoid
- -Thinking the appraiser must decline any assignment with conflicting requirements
- -Believing client instructions alone justify departing from USPAP without proper documentation
- -Assuming USPAP always takes precedence over legal requirements
Concept Deep Dive
Analysis
This question tests understanding of jurisdictional exceptions under USPAP, which allow appraisers to comply with legal requirements that conflict with USPAP standards. Jurisdictional exceptions are a critical safety valve that prevents appraisers from being caught between conflicting professional and legal obligations. The key is that the exception must be properly disclosed and documented in the appraisal report. This concept balances professional standards with legal compliance, recognizing that local laws and regulations may sometimes supersede USPAP requirements.
Background Knowledge
USPAP allows jurisdictional exceptions when legal requirements conflict with appraisal standards, provided the exception is clearly identified and disclosed in the report. The appraiser must demonstrate that compliance with USPAP would violate applicable law or regulation.
Real-World Application
Common situations include court orders requiring specific approaches, local government regulations mandating certain methodologies for tax assessments, or lending regulations requiring particular valuation methods that may conflict with USPAP's requirement to consider all applicable approaches.
More USPAP Questions
Which statement best defines a hypothetical condition under USPAP?
According to the Competency Rule, if an appraiser lacks the knowledge and experience to complete an assignment competently, which action is NOT acceptable?
An appraiser runs only the sales comparison approach on a standard tract home and omits the cost and income approaches. Under Standard 1 this is:
A value opinion for a subdivision as if fully built out two years from now is what kind of assignment, and what does it require?
A hypothetical condition differs from an extraordinary assumption in that a hypothetical condition:
An appraiser must disclose in the certification whether they have:
A client-imposed requirement — 'use only comps from our approved list' — is best described as:
Under Standard 1, when developing a real property appraisal, an appraiser must:
The certification required by Standards Rule 2-3 must be signed by:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
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