Question:

I am a real property appraiser and a government employee. The agency I work for wants me to provide a “preliminary estimate of value.” The agency policy states that this work is not an appraisal and is not covered by USPAP because of a Jurisdictional Exception. Should I comply with USPAP when I prepare a “preliminary estimate of value?”

Response:

This question raises a number of issues related to USPAP compliance and the application of the JURISDICTIONAL EXCEPTION RULE. . 

Based on your identification as an appraiser, you should comply with USPAP. This is because an individual’s public identification as an appraiser establishes an expectation that valuation services will be performed in compliance with USPAP. You must comply with USPAP when required by law, regulation, or agreement.  Even if the agency policy does not require USPAP compliance, other applicable law or regulation might require compliance.

The JURISDICTIONAL EXCEPTION RULE cannot be used to resolve this type of USPAP compliance question because compliance is not required by USPAP. USPAP does not establish who or which assignments must comply; thus, the JURISDICTIONAL EXCEPTION RULE cannot be applied to the decision to comply with USPAP.

Another issue raised by this question relates to the USPAP requirements that apply to a “preliminary estimate of value.” USPAP does not define “preliminary estimate of value.” However, it is the nature of the service, not the label applied, that defines the service. An appraisal is defined as the act or process of developing an opinion of value; an opinion of value. If the service is an “appraisal” as defined in USPAP, then STANDARDS 1 and 2 apply to the “preliminary estimate of value.”