Under the management section, an appraiser must disclose:
Correct Answer
C) A fee or thing of value paid to procure the assignment
The Management section of the Ethics Rule requires an appraiser to disclose that he or she paid a fee or commission, or gave a thing of value, in connection with procuring an assignment. The disclosure goes in the certification and in any transmittal letter that states conclusions; the amount need not be disclosed. It is not a list of clients, revenue or education.
Why This Is the Correct Answer
Option C is correct because the Management section requires an appraiser to disclose that he or she paid a fee or commission, or gave a thing of value, in connection with procuring an assignment. The disclosure must appear in the certification and in any transmittal letter in which conclusions are stated. The amount paid does not need to be disclosed.
Why the Other Options Are Wrong
Option A: The names of all current clients served during the past year
Option A is wrong because the Management section does not require disclosing the names of all clients served during the past year. Its disclosure duty concerns payments or things of value given to procure an assignment.
Option B: Total annual revenue from all appraisal and consulting services
Option B is wrong because total annual revenue from appraisal and consulting services is not a Management section disclosure. The required disclosure concerns a fee, commission or thing of value paid to procure the assignment.
Option D: A complete transcript of the appraiser’s continuing education
Option D is wrong because the Management section does not require a complete transcript of continuing education. That is not the disclosure this section addresses.
Paid to get it? Disclose it
If the appraiser paid a fee or gave something of value to get the assignment, disclose that fact, but not the amount.
How to use: Use this when a question asks what the Management section requires an appraiser to disclose.
Exam Tip
Remember the details: the disclosure goes in the certification and any transmittal letter stating conclusions, and the amount need not be disclosed.
Common Mistakes to Avoid
- -Believing the amount paid must be disclosed
- -Forgetting to include the disclosure in a transmittal letter that states conclusions
- -Thinking the Management section requires disclosure of client lists or revenue
Concept Deep Dive
Analysis
This question tests the disclosure requirement in the Management section of the Ethics Rule. An appraiser must disclose that he or she paid a fee or commission, or gave a thing of value, in connection with procuring an assignment. Client lists, revenue and education records are not required disclosures under this section.
Background Knowledge
The Management section of the Ethics Rule addresses payments for procuring assignments and other business practices that could affect public trust. Paying a fee or giving a thing of value to obtain an assignment must be disclosed in the certification and in any transmittal letter stating conclusions. The fact of payment must be disclosed, but not the amount.
Real-World Application
An appraiser pays a referral fee to a marketing firm that brings in an assignment. The appraiser states in the certification that a fee was paid in connection with procuring the assignment. The appraiser does not need to state how much was paid.
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