Preamble, Ethics Rule, and Definitions
What the Preamble actually says
The Preamble states USPAP's purpose: to promote and maintain public trust in appraisal practice by establishing requirements for appraisers. It frames USPAP as minimum requirements for process, disclosure, and credibility - not a methodology manual. USPAP does not prescribe a 'correct' approach to value; it prescribes that whatever you do be competent, supported, and not misleading.
Ethics Rule - four parts
- Conduct: honesty, impartiality, objectivity; no criminal conduct; no knowingly misleading communication; and no compensation contingent on a predetermined value, a direction in value, a loan amount, or a favorable outcome.
- Management: the appraiser must ensure employees and agents follow the Ethics Rule; contingency prohibitions extend to them.
- Confidentiality: confidential information (not publicly available) may not be disclosed except with client authorization, as required by law or regulation, by due process, or for USPAP enforcement by a duly authorized third party.
- Record Keeping: retain the workfile five years after delivery of the report, or two years after final disposition of a legal proceeding in which testimony was given; produce it to the state regulator on request.
Definitions that drive questions
Client (engages the appraiser) is not intended user (identified by the appraiser). Price, cost, and value are three different concepts. A hypothetical condition is something the appraiser knows to be false; an extraordinary assumption is something uncertain that, if untrue, changes the conclusion.
Rule of thumb
If a fact pattern says the fee rises when the value reaches a target, the Conduct violation occurs at acceptance, regardless of how the report turns out.