An appraiser who becomes aware that a client intends to use a report for a purpose other than the stated intended use should:
Correct Answer
B) Recognize the report was not developed for that use
Why this is correct: USPAP's Ethics Rule requires that an appraisal be developed for a specific intended use. If the client uses it for another purpose, the appraiser should recognize that the report was not designed for that use and may not be appropriate. Why the other choices are wrong: "Amend the report to cover the new purpose" is wrong because the appraiser cannot simply amend it; a new assignment may be needed. "Take no action, since use is the client's concern" is wrong because the appraiser has a professional responsibility regarding the report's proper use. "Void the original report immediately" is wrong because voiding is not the required first step; recognition and communication are. Exam tip: Intended use drives scope. A report for one use may not support another. Communicate, don't ignore.
Why This Is the Correct Answer
Option B captures the appraiser's actual position: the report was developed for the intended use identified in the assignment, and it may not be appropriate for another. Recognizing that limitation, and communicating it to the client, is what protects intended users and keeps the appraiser from implicitly certifying an analysis for a purpose it never addressed. The remedy, if the client wants coverage, is a new assignment with a properly identified intended use.
Why the Other Options Are Wrong
Option A: Amend the report to cover the new purpose
A new use is a new appraisal problem, not an editing task. Simply amending the report would leave the scope of work, the data, and possibly the definition of value matched to the old question while the cover page claims a new one. If the analysis genuinely needs to change, the appraiser performs a new assignment rather than papering over the old one.
Option C: Take no action, since use is the client's concern
Indifference is not an option when the appraiser knows the report is heading toward a use it does not support. The standards impose duties that run to intended users and to the public trust, not only to whoever paid the fee. Silence in the face of a known misuse risks a misleading communication.
Option D: Void the original report immediately
There is no mechanism for voiding a report that was properly developed and delivered for its stated use, and the original intended users may still be relying on it appropriately. Withdrawing the work would not stop the misuse and would create problems for users who did nothing wrong. The measured response is to identify the limitation and communicate it.
Built for One Job
A report is a tool built for one job. Handing it to a different job does not retool it, and no note on the cover converts a tool built for one purpose into one built for another.
How to use: When a stem describes a report being used for something other than its stated intended use, choose the option that acknowledges the mismatch and points toward a new assignment rather than an edit, silence, or withdrawal.
Exam Tip
Look for the moderate, professional response. On intended-use items the extremes, do nothing and void everything, are both wrong.
Common Mistakes to Avoid
- -Readdressing or relabeling a report instead of performing a new assignment
- -Assuming anyone who receives a copy becomes an intended user
- -Treating client instructions as controlling over the appraiser's own duties
Concept Deep Dive
Analysis
Intended use drives scope of work, so a report is engineered for a particular purpose and a particular set of intended users identified at the outset. When a client repurposes the report, the analysis may no longer fit: the definition of value, the effective date, the property rights considered, the depth of investigation, and even the report format were all chosen for a different question. The appraiser cannot control what a client does with a delivered report, but the appraiser can recognize the mismatch, say so, and decline to endorse the report for a use it was not developed to serve. If the client genuinely needs the new use, the right path is a new assignment with its own intended use, scope of work, and report, not a relabeling of the old one.
Background Knowledge
You need to know that identifying the client, intended users, and intended use is a required first step, and that scope of work follows from those identifications. You also need to understand that intended users are those identified by name or type in the assignment, and that other parties are not intended users merely because they obtain a copy.
Real-World Application
A client who ordered a report for internal decision making later asks to hand it to a lender for a loan; the appraiser explains the report was not developed for lending purposes and offers a new assignment with the lender identified as the client or intended user.
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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