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USPAP's Ethics Rule

By Edited Nov 13, 2013 0 0

USPAP’s Ethics Rule

The Uniform Standards of Appraisal Practice (USPAP) was created to “promote and maintain a high level of public trust in appraisal practice” and to establish “requirements for appraisers” (USPAP, 2009, p. 6).  It is a requirement that all appraisers follow the ethical and performance stands given in the USPAP when they are obligated by “law or regulation, or by agreement with the client or intended users” (USPAP, 2009, p. 6).  The USPAP gives their standards through definitions, rules and standards.  Definitions in the USPAP include all the terminology used in the USPAP.  The rules include: ethics rules, competency rules, scope of work rules, and jurisdictional exception rules. The standards include all the requirements that appraisers must follow and the ways in which these requirements must be communicated.

An important rule addressed in the USPAP is the “ethics rule”.  The ethics rule “sets forth the requirements for integrity, impartiality, objectivity, independent judgment and ethical conduct” (USPAP, 2009, p. 6).  It includes four different aspects about conduct, management, confidentiality and record keeping.

The conduct section of the ethics rule is compromised of seven different rules appraisers are suggested to follow. Firsts, an appraiser must perform “ethically and competently” with the USPAP rules (USPAP, 2009, p. 7).  Second, appraisers must not have any association with criminal conduct. Third, appraisers should bring in their personal objectivity into their assignments. Four, an appraiser may not take sides with one party. Fifth, appraisers may not “accept an assignment that includes the reporting of predetermined opinions and conclusions” (USPAP, 2009, p. 7).  Sixth, all reports must be clear and not give misleading information.  Seventh, appraisers may not determine the value of a property based on characteristics such as race, gender, marital status etc.

The management section consists of three rules. First, all payments received by the appraiser for their work must be disclosed. Second, an appraiser should not accept an assignment and receive payment for any of the following reasons: a) preparing a report on a predetermined value, b) preparing a report that has a predetermined direction to benefit the client, c) preparing a report that consists of a value opinion of someone else, d) preparing a report that has a stipulated result and finally e) preparing a report that depends on the “occurrence of a subsequent event related to the appraiser’s opinions and specific to the assignment’s purpose” (USPAP, 2009, p. 8).  Third, an appraiser should not advertise in a false or misleading manner.

The confidentiality section consists of four rules. First, the appraiser must “protect the confidential nature of the appraiser-client relationship” (USPAP, 2009, p. 8).  Second, appraisers must perform their duties with good faith with the interests of the customer and the confidentiality of their information. Third, appraisers must be “aware of, and comply with, all confidentiality and privacy laws and regulations applicable “ with the assignment (USPAP, 2009, p. 8).  Forth, the appraiser must not disclose any confidential information about the client or the assignment unless required by law.

The record keeping section consists of three rules. First, an appraiser must prepare a “workfile for each appraisal, appraisal review, or appraisal consulting assignment” (USPAP, 2009, p, 9). The workfile must contain the following: a) the name of the client and any other uses, b) copies of reports and documentation of media, c) summaries of “any oral reports or testimony” with the appraiser’s signature and date, d) any additional information that is necessary to “support the appraiser’s opinions and conclusions” (USPAP, 2009, p. 9).  Second, an appraiser must keep their workfile for five years or two years (after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment”, which ever is longer (USPAP, 2009, p. 9). Third, appraisers must have custody of their records or someway of retrieving their records at any time.

 

References

The Appraisal Foundation (2009). USPAP, retrieved May 10, 2009 from http://www.vanderwerffandassociates.com/USPAP.pdf


Appraisal Standards

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