Real Estate Law, Regulations, and Ethics
Legal Interests and Rights
Understand the bundle of rights: surface, subsurface, air, and the right to use, exclude, and transfer. Distinguish fee simple absolute, leased fee, leasehold, life estate, and easements (appurtenant versus in gross, prescriptive versus by necessity). A trap: appraisers value the rights conveyed, not just the physical property.
Regulation and Licensing
Know the regulatory structure: state licensing boards, federal oversight through the Appraisal Subcommittee, and the Appraiser Qualifications Board. The Uniform Standards are enforced by state boards; the Appraisal Foundation issues standards. Distinguish the Appraisal Standards Board (writes USPAP) from the Appraiser Qualifications Board (sets criteria).
Ethics and Independence
Core ethics: competency, independence and objectivity, confidentiality, record keeping, and no contingent fees based on a predetermined value. An appraiser may not accept an assignment with a fee contingent on the value reported. Disclose prior services and any interest in the property.
Worked Rule of Thumb
If a client offers a bonus for hitting a target value, decline-this violates the ethics rule on compensation. If asked to appraise a property you sold within the past three years, disclose the prior service and obtain competency or decline.
Exam Traps
Do not confuse licensing with certification; do not confuse appraisal with appraisal review (review is a separate service with its own scope).