An appraiser writes that a neighborhood is valuable because its residents are “all of one background.” Which USPAP requirement does this violate?
Correct Answer
D) The ban on treating inhabitant homogeneity as relevant
Whether or not any antidiscrimination law applies, an appraiser must not base a value opinion on the premise that homogeneity of the inhabitants of a geographic area is relevant to the appraisal. Accuracy of the statement does not make it permissible.
Why This Is the Correct Answer
Option D is correct because USPAP states that an appraiser must not base an opinion of value upon the premise that homogeneity of the inhabitants of a geographic area is relevant for the appraisal. Tying value to residents being of one background does exactly that. Factual accuracy of the description does not make the premise permissible.
Why the Other Options Are Wrong
Option A: The Confidentiality section, and no other provision
Option A, the Confidentiality section and no other provision, is wrong because the statement does not involve disclosing confidential information; the issue is a prohibited basis for value.
Option B: The Record Keeping Rule, and no other provision
Option B, the Record Keeping Rule and no other provision, is wrong because the problem is the premise used in the value opinion, not the workfile or its retention.
Option C: No provision, if the statement is factually accurate
Option C, no provision if the statement is factually accurate, is wrong because the prohibition applies to the premise itself; an accurate description of residents does not make homogeneity a permissible basis for value.
Value the property, not people
Appraisers value land and buildings, not who lives nearby or whether residents are alike.
How to use: Use this when a report comment links value to resident characteristics.
Exam Tip
An option claiming accuracy excuses a discriminatory premise is a trap; the premise itself is prohibited.
Common Mistakes to Avoid
- -Thinking a factually true description of residents may support value
- -Classifying the issue as a confidentiality or record keeping problem
- -Assuming the rule applies only when a fair housing law applies
Concept Deep Dive
Analysis
This question tests USPAP's nondiscrimination provisions. An appraiser must not base a value opinion on the premise that homogeneity of an area's inhabitants is relevant. Calling a neighborhood valuable because residents are of one background relies on that forbidden premise, whether or not the statement is factually accurate.
Background Knowledge
The Ethics Rule's nondiscrimination provisions bar value opinions based on protected characteristics of people and on the premise that homogeneity of inhabitants is relevant. These provisions apply whether or not a particular antidiscrimination law covers the assignment.
Real-World Application
A reviewer finds a neighborhood comment praising a subdivision's 'uniform population' as a value factor. The reviewer flags it as a prohibited homogeneity premise and asks the appraiser to base the neighborhood analysis on market data such as sales, supply and amenities.
More USPAP Questions
Under USPAP, what are assignment results?
The certification required by Standards Rule 2-3 must be signed by:
Under 2024 USPAP, which statement correctly combines the requirements for an oral real property appraisal report and its workfile?
An appraiser accepts an assignment involving a property type the appraiser has valued once before, years ago. Competency requires:
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?
Under 2024 USPAP Standard 1, which listed assignment element must be identified in developing a real property appraisal?
An appraiser provided an appraisal of the same property for another client 18 months ago. No confidentiality obligation prevents disclosing the fact of that service. Before agreeing to a new assignment, the appraiser must:
According to USPAP, what is the primary purpose of the Ethics Rule?
An appraiser is asked to determine 'fair market value' for an assignment. According to USPAP, the appraiser should:
Which list gives the sections of the 2024 USPAP Ethics Rule?
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