Under USPAP 2024 SR 2-2(b), which statement correctly describes Restricted Appraisal Report use?
Correct Answer
D) Use is limited to the client and named users, with the required warning
Restricted Appraisal Report content is in SR 2-2(b), not a separate SR 2-5. The report limits use to the client and named intended users and warns that some supporting rationale may be absent. Restricted reporting does not remove development or workfile responsibilities.
Why This Is the Correct Answer
Option D is correct because SR 2-2(b) requires a Restricted Appraisal Report to clearly and conspicuously state a restriction limiting use to the client and the named intended users. It must also clearly and conspicuously warn that the report may not contain supporting rationale for all opinions and conclusions. Option D captures both the use limit and the required warning.
Why the Other Options Are Wrong
Option A: The client is the sole permitted intended user of the report
Option A is wrong because the client is not the sole permitted intended user. A Restricted Appraisal Report may be used by the client and other intended users who are named in the report.
Option B: Anyone who receives a copy of the report becomes an intended user
Option B is wrong because receiving a copy does not make someone an intended user. Use is limited to the client and named intended users identified by the appraiser.
Option C: The restricted format eliminates the need for credible development
Option C is wrong because the restricted format changes reporting, not development. Credible development and workfile responsibilities still apply.
Restricted means named users, warned
A Restricted Appraisal Report is for the client and named users only, and it warns that some rationale may be missing.
How to use: Use this to check options describing who may use a Restricted Appraisal Report and what it must state.
Exam Tip
Watch for options saying the client is the only possible user or that the restricted format relaxes development. Named intended users and a conspicuous warning are the key features.
Common Mistakes to Avoid
- -Believing only the client may be an intended user of a Restricted Appraisal Report
- -Thinking anyone who receives a copy becomes an intended user
- -Assuming restricted reporting reduces development requirements
Concept Deep Dive
Analysis
This question tests the Restricted Appraisal Report requirements in SR 2-2(b). The report must limit use to the client and named intended users and warn that it may not contain supporting rationale for all opinions and conclusions. Restricted reporting changes reporting detail, not development duties.
Background Knowledge
USPAP offers two written real property reporting options: the Appraisal Report and the Restricted Appraisal Report. The restricted format provides less detail, so its use is limited to the client and named intended users and it carries a warning about missing rationale. Development requirements and the workfile obligations stay the same.
Real-World Application
A client who needs a value for internal planning asks for a Restricted Appraisal Report and names its business partner as an additional intended user. The appraiser names both in the report, states the use restriction and includes the required warning. The appraiser still develops credible results and keeps a complete workfile.
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