USPAP Quick Reference & Cheat Sheet
Everything you need to know about the Uniform Standards of Professional Appraisal Practice for the Appraiser exam. Ethics Rule, Competency Rule, Scope of Work, Standards 1 & 2, report types, and key definitions.
Governs conduct, management, confidentiality, and record keeping
1Conduct
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Conduct
- Perform assignments with impartiality, objectivity, and independence — no advocacy
- Do not accept an assignment that includes a predetermined result
- Do not communicate assignment results in a misleading manner
- Do not use or rely on unsupported conclusions from others
2Management
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Management
- Compensation must not be contingent on a predetermined value or direction in value
- Must disclose any fees or compensation paid to obtain the assignment
- Payment of undisclosed fees to procure assignments is unethical
- Fee splitting is allowed if properly disclosed
3Confidentiality
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Confidentiality
- Must not disclose confidential information or assignment results to anyone other than the client, intended users, or state enforcement agencies
- Confidentiality obligation survives completion of the assignment (it does not expire)
- Exceptions: authorized by client, required by law/regulation, or necessary for peer review
4Record Keeping
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Record Keeping
- Must prepare a workfile for each assignment containing all data, information, and documentation necessary to support the analyses, opinions, and conclusions
- Workfile must be retained for at least 5 years after preparation OR at least 2 years after final legal proceeding (whichever is longer)
- A workfile must include a true copy of the report
Requires competence in property type, market, and analysis method
When It Applies
The Competency Rule applies to every assignment. Before accepting an assignment, the appraiser must determine if they have the necessary knowledge and experience in the property type, market area, and specific appraisal methods required.
Steps to Achieve Competency
- 1Identify what is needed to complete the assignment competently
- 2Acquire the necessary competence through education, research, or association with a competent appraiser
- 3Take all steps necessary to complete the assignment competently
Disclosure Requirements
If competency was not present at the time of acceptance, the appraiser must disclose the lack of knowledge or experience to the client before accepting. The report must also describe the lack of competency and the steps taken to achieve it.
Defines the type and extent of research and analysis for each assignment
Problem Identification
- - Client and intended users
- - Intended use of the appraisal
- - Type and definition of value
- - Effective date of the opinion
- - Subject property characteristics
- - Assignment conditions
Applicable Approaches
- - Sales Comparison Approach
- - Cost Approach
- - Income Approach
- - Must consider all three and use those necessary for credible results
Level of Detail
- - Extent of data research
- - Type of property inspection
- - Degree of analysis applied
- - Must be sufficient for credible results
Disclosure
- - Scope of work must be disclosed in the report
- - Must allow intended users to understand the work performed
- - Appraiser determines scope (not client)
- - Cannot accept conditions that limit scope below credible standards
Appraisal development requirements
- Identify the problem to be solved
- Determine and perform the scope of work necessary to develop credible results
- Analyze the subject property and relevant market data
- Develop and reconcile applicable approaches to value
- Analyze highest and best use
- Collect, verify, and analyze all necessary information
- Do not render an opinion based on a predetermined result
Appraisal reporting requirements
- Clearly communicate the results in a manner not misleading
- Contain sufficient information to enable intended users to understand the report
- Clearly identify the type of report (Appraisal or Restricted)
- Include signed certification
- State all extraordinary assumptions and hypothetical conditions
- Include assumptions, limiting conditions, and scope of work
- Disclose prior services regarding the subject within 3 years
USPAP defines two reporting options for real property appraisals
| Feature | Appraisal Report | Restricted Appraisal Report |
|---|---|---|
| Intended Users | Client + other intended users | Client only |
| Level of Detail | Sufficient detail for intended users to understand | May use restricted detail |
| Restriction Notice | Not required | Must include prominent restriction notice |
| Summary of Info | Must summarize information analyzed and reasoning | May reference workfile instead of summarizing |
| Workfile | Required | Required (must support restricted content) |
| Certification | Required — signed | Required — signed |
| Common Use | Lending, litigation, tax appeals | Internal client use, portfolio management |
Must-know USPAP terminology for the exam
Hypothetical Condition
A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.
Example: Appraising a vacant lot "as if improved" with a proposed building.
Extraordinary Assumption
An assumption, directly related to a specific assignment, as of the effective date, which if found to be false, could alter the appraiser's opinions or conclusions. It is presumed to be true but is not verified.
Example: Assuming a property has no environmental contamination without performing a Phase I assessment.
Jurisdictional Exception
An assignment condition established by applicable law or regulation, which precludes an appraiser from complying with a part of USPAP. The appraiser must comply with the law and cite the Jurisdictional Exception Rule.
Example: A state law requiring a specific report format that conflicts with USPAP reporting options.
Assignment Conditions
Assumptions, extraordinary assumptions, hypothetical conditions, laws, regulations, or other conditions that affect the scope of work. These include three categories: assumptions (general limiting conditions), extraordinary assumptions, and hypothetical conditions.
Intended Use vs. Intended Users
Intended use is the use(s) of an appraiser's reported assignment results, as identified by the appraiser based on communication with the client (e.g., mortgage lending, estate settlement). Intended users are the party or parties the appraiser identifies as users of the report (always includes the client). The appraiser has no obligation to parties who receive a copy but are not identified as intended users.
Frequently tested USPAP concepts that candidates get wrong
Contingent fees are NOT always prohibited
USPAP prohibits fees contingent on the direction of value or a predetermined result. However, fees contingent on other factors (like completing the assignment by a deadline) are acceptable. The exam tests whether you know the specific prohibition.
Confidentiality survives the assignment
Many candidates think confidentiality ends when the assignment is complete. It does not. The obligation continues indefinitely unless the client authorizes disclosure or law/regulation requires it.
The appraiser determines scope of work, not the client
While the client identifies intended use and intended users, the appraiser is responsible for determining the appropriate scope of work. A client cannot dictate a scope that would produce non-credible results.
Hypothetical Condition vs. Extraordinary Assumption
HC = you know it is not true (contrary to fact). EA = you assume it is true but have not verified. A proposed construction appraised "as complete" uses a Hypothetical Condition. Assuming no termite damage without an inspection uses an Extraordinary Assumption.
Workfile retention is 5 years OR 2 years after final legal proceeding
The retention period is the longer of 5 years after preparation or 2 years after final disposition of any judicial proceeding. Candidates often forget the judicial proceeding extension.
You CAN accept assignments you're not competent in
The Competency Rule does not prohibit accepting assignments outside your expertise. You must disclose the lack of competency to the client before accepting and take steps to become competent.
Prior services disclosure is 3 years, not 5
USPAP requires disclosure of any services performed regarding the subject property within the prior 3 years (not the 5-year workfile retention period). Candidates frequently confuse these two timeframes.
Jurisdictional Exception is not a "get out of USPAP free" card
The Jurisdictional Exception Rule only applies when law or regulation precludes compliance with USPAP. An appraiser cannot invoke it for personal convenience. It must be cited specifically in the report, identifying which part of USPAP is affected and why.
USPAP applies to appraisals, not BOVs or CMAs
USPAP applies when performing an appraisal (an opinion of value). Broker Opinion of Values (BOVs) and Comparative Market Analyses (CMAs) performed by licensees who are not acting as appraisers are generally not subject to USPAP, unless the state says otherwise.
Frequently Asked Questions
What does USPAP stand for?▼
USPAP stands for the Uniform Standards of Professional Appraisal Practice. It is the set of quality control standards applicable to real property, personal property, and business appraisal analysis and reports in the United States. USPAP is developed and maintained by The Appraisal Foundation.
How often is USPAP updated?▼
USPAP is updated every two years by the Appraisal Standards Board (ASB) of The Appraisal Foundation. Appraisers must complete a 7-hour USPAP update course each cycle to maintain their license or certification.
What is the difference between an Appraisal Report and a Restricted Appraisal Report?▼
An Appraisal Report contains sufficient detail for intended users to understand the appraisal, including the reasoning behind the opinion of value. A Restricted Appraisal Report is for client use only and may contain less detail, but must still state the opinion of value and comply with USPAP.
What is a Hypothetical Condition vs. an Extraordinary Assumption?▼
A Hypothetical Condition is a condition assumed to be true but is known to be contrary to fact (e.g., appraising a vacant lot as if a building exists). An Extraordinary Assumption is something assumed to be true that, if found untrue, could alter the value conclusion (e.g., assuming clear title without a title search).
Can an appraiser accept an assignment they are not competent to perform?▼
Yes, under the Competency Rule, an appraiser may accept an assignment they are not yet competent to perform, provided they: (1) disclose the lack of knowledge or experience to the client before accepting, (2) take all steps necessary to complete the assignment competently, and (3) describe in the report the lack of knowledge and the steps taken to achieve competency.
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