An appraiser performed a prior appraisal of the subject within three years before a proposed new agreement. No confidentiality restriction prevents disclosing its occurrence. What is required?
Correct Answer
A) Disclose the prior service to the client and in the subsequent report certification
The prior-services disclosure covers known services concerning the subject in any capacity within the three years before the new agreement. The occurrence is disclosed to the client and in subsequent certification; it does not automatically authorize revealing the former client’s confidential information.
Why This Is the Correct Answer
Option A is correct because USPAP requires the appraiser, if the prior service is known before agreeing to perform the assignment or discovered during it, to disclose it to the client and in each subsequent report certification. Here a prior appraisal occurred within the three-year period and no confidentiality restriction prevents disclosing its occurrence.
Why the Other Options Are Wrong
Option B: No disclosure is required, because the earlier appraisal was the appraiser’s own work product
Option B says no disclosure is needed because the earlier appraisal was the appraiser's own work. The disclosure requirement applies precisely to the appraiser's own prior services regarding the subject.
Option C: Disclosure of the prior fee charged, without disclosing the prior service
Option C requires disclosing the prior fee while not disclosing the prior service. The obligation is to disclose that the service occurred; the fee is not what the rule targets.
Option D: Automatic disclosure of all former-client confidential information
Option D calls for automatic disclosure of all former-client confidential information. Disclosing the occurrence of a prior service does not authorize revealing the former client's confidential information.
Disclose the service, not the secrets
Disclose that you previously performed a service regarding the subject, but keep the former client's confidential information confidential.
How to use: Use it to separate the required disclosure from information that remains protected.
Exam Tip
Note the two places the disclosure goes: to the client and in each subsequent report certification.
Common Mistakes to Avoid
- -Thinking one's own prior work is exempt from disclosure
- -Disclosing the fee instead of the service
- -Revealing the former client's confidential information
Concept Deep Dive
Analysis
This question tests the USPAP prior services disclosure. If an appraiser knows of services performed regarding the subject within the three years before agreeing to a new assignment, that fact must be disclosed. The disclosure covers the occurrence of the prior service, not the former client's confidential information.
Background Knowledge
The USPAP Ethics Rule addresses conflicts of interest and transparency, including disclosure of prior services regarding the subject property. The disclosure is made to the client before or upon discovery and in the certification of subsequent reports. Confidentiality obligations to prior clients continue to apply.
Real-World Application
A lender asks an appraiser to value a house the appraiser appraised for a different lender two years earlier. Before accepting, the appraiser tells the new client about the prior appraisal and includes the disclosure in the certification, without sharing the earlier report's confidential details.
More USPAP Questions
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