USPAP Ch 6 Quiz

Question 1

When a law or regulation precludes compliance with any part of USPAP, appraisers must:

Answer 1

Comply with that law or regulation

Question 2

If USPAP compliance is mandated by federal law, no state or local law can create a jurisdictional exception.

Answer 2

TRUE

Question 3

If an assignment involves a jurisdictional exception, what must an appraiser do?

Answer 3

Identify the law, comply with the law, disclose in the report the part of USPAP that is voided, and cite in the report the law that caused the jurisdictional exception

Question 4

What is the purpose of the JURISDICTIONAL EXCEPTION RULE?

Answer 4

To provide a saving or severability clause to preserve the balance of USPAP

Question 5

The use of the JURISDICTIONAL EXCEPTION RULE in an assignment is a matter of choice by an appraiser.

Answer 5

FALSE

Question 6

Is it permissible to use instructions from an attorney as a basis for a jurisdictional exception?

Answer 6

No

Question 7

As used in the JURISDICTIONAL EXCEPTION RULE, the term “law” includes ____________.

Answer 7

Court-made laws, Administrative rules and ordinances, Legislative laws

Question 8

A property owner’s attorney in a condemnation case has asked a real property appraiser to use the JURISDICTIONAL EXCEPTION RULE of USPAP in a particular assignment. The subject property sold within one year of the appraisal for what everyone admits was a very low price, although all parties claim the sale was not made under duress. The attorney does not want the prior sale mentioned in the appraisal report. The appraiser reviews USPAP with the attorney, showing him Standards Rule 1-5 which requires appraisers to analyze any prior sales of the property being appraised that occurred within three years. The attorney is aware that the JURISDICTIONAL EXCEPTION RULE exists and tells the appraiser to apply it in this situation. How should the appraiser respond?

Answer 8

Instructions from a client do not establish a jurisdictional exception. A jurisdictional exception is not created unless compliance with one or more of the requirements of USPAP is precluded by law or regulation of a jurisdiction.

Question 9

State whether each one of the following statements is a jurisdictional exception: A: You have been asked to use a specific definition of market value in an assignment.

Answer 9

No – This is an assignment element issue (type and definition of value). This would not preclude an appraiser from complying with USPAP.

Question 10

State whether each one of the following statements is a jurisdictional exception: Your state regulations say you need to keep your workfile for six years

Answer 10

No – This is a management issue related to state certification and licensing requirements. This would not preclude an appraiser from complying with USPAP. By keeping his or her workfile for six years, an appraiser would be able to comply withboththe regulation and USPAP.

Question 11

State whether each one of the following statements is a jurisdictional exception: The probate court pays appraisers based on the value of the property

Answer 11

Yes – This is a jurisdictional exception that must be supported by a citation of the law or regulation. TheManagementsection of the ETHICS RULE prohibits compensation that is contingent upon the value opinion that is developed. The appraiser must follow the court-made law, and not the part of USPAP that has been voided. It is important to note that the remainder of USPAP is still in effect.

Question 12

State whether each one of the following statements is a jurisdictional exception: In an eminent domain case, the state agency client does not want you to consider the future improvements

Answer 12

No – This is an assignment element issue. Appraisers are required only to consider anticipated public or private improvements when such analysis is necessary for credible assignment results. In an assignment for this state agency, consideration of the future improvements would not be necessary for credible results. An appraiser could comply with both USPAP and this state agency requirement, so there is no jurisdictional exception.

Question 13

Which of these would be considered an example of a jurisdictional exception in an appraisal assignment?

Answer 13

A probate court paying appraisers based on the value of the subject property

Question 14

A state passes a law requiring appraisers to keep their workfiles for 10 years after preparation. Is this a jurisdictional exception under USPAP?

Answer 14

No

Question 15

When does a jurisdictional exception occur in an assignment?

Answer 15

It is automatic when a law precludes compliance with a part of USPAP

Question 16

An appraiser was recently hired to perform an appraisal assignment for a government agency. The agency has a regulation that requires the appraiser to provide the appraisal report to other government agencies if requested. Does this regulation create a jurisdictional exception to theConfidentialitysection of the ETHICS RULE?

Answer 16

No. The Confidentiality section of the ETHICS RULE reads, in part:

An appraiser must not disclose: (1) confidential information or (2) assignment results to anyone other than:

the client;
parties specifically authorized by the client;
state appraiser regulatory agencies;
third parties as may be authorized by due process of law; ….