Summary (AO-21)

• An individual must comply with USPAP when required by law, regulation, or agreement.

• An individual should comply with USPAP when choosing to represent one’s self as an appraiser.

• Appraisal practice is a subset of valuation services. Since USPAP obligations apply to those who act as appraisers, USPAP applies to appraisal practice.

• The definition of appraiser and need for public trust establish the factor of “expectation” as the basis for the obligation to comply with USPAP.

• An individual’s public identification as an appraiser establishes a justifiable expectation that valuation services will be performed in compliance with USPAP. Because of the need to preserve public trust and confidence in appraisal practice, the expectations of the client and other intended users for ethical and competent performance create an obligation to comply with USPAP.

• The appraiser has a professional responsibility to recognize the capacity in which he or she is performing. The responsibility includes inquiry about, and recognition of, the client’s expectations.

• When an individual has an opportunity to choose the capacity in which he or she will provide a valuation service, he or she is free to provide the valuation service as an appraiser or in some other capacity.

• An individual who is recognized as an appraiser must use great care not to violate the public trust. An appraiser acting in another role must ensure that intended users are not misled as to the individual’s role in providing that valuation service.

• USPAP also places an obligation on an appraiser even when he or she provides a valuation service in some other capacity – that obligation being to not mislead the intended users of the valuation service about the capacity in which he or she is acting.

• If a valuation service is premised on advocacy, or compensation arrangements that are contrary to the ETHICS RULE, an individual acting as an appraiser cannot perform the valuation service.

• Within appraisal practice, there are Standards that describe the requirements for developing and communicating appraisal, appraisal review, or appraisal consulting assignments. Appraisers who provide valuation services for which there are no Standards need to comply with the portions of USPAP that apply generally to appraisal practice.

• The Record Keeping section of the ETHICS RULE applies to appraisal, appraisal review, or appraisal consulting assignments. For other assignments, there are no USPAP record keeping or workfile requirements.

• The SCOPE OF WORK RULE applies only to appraisal, appraisal review, and appraisal consulting assignments.

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