Legal, Regulatory, and Nondiscrimination Considerations
Rights and regulation
Appraisers must understand property rights such as fee simple, leased fee, and leasehold; encumbrances including easements and encroachments; deed restrictions; zoning; nonconforming uses; and condemnation. Federal and state law prohibit discrimination in appraisal practice. The Fair Housing Act, the Equal Credit Opportunity Act, and appraisal independence rules under FIRREA and Dodd-Frank shape lending-related assignments. Appraisers must not consider race, color, religion, sex, disability, familial status, national origin, or other protected characteristics.
Traps
Questions may imply that demographic change affects value; it does not justify bias. Zoning nonconformity is not automatically a value loss. Easements can affect value but are not always negative. State licensing and USPAP compliance are separate from federal lending rules, and all apply simultaneously.
Worked example
An appraiser observes neighborhood demographic change and lowers the value. That is unlawful bias and a standards violation; the analysis should rely on property and market factors. Rule of thumb: if a factor is not a property or market characteristic, do not use it as a value influence.