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You did a bad—a USPAP violation!  They said so!  Are they right?

A violation.  A strong word.  Clear and succinct.  Easily understandable by anyone.  Of course.  Black letters on white.  Where in USPAP does it identify (for real property) what is a violation or not?

We can look at three parts of USPAP;

First there are the “integrity” rules, having to do with ethics, management, confidentiality, record- keeping, competency, work scope, and superseding laws and regulations.  Next there is Standard 1, on performance in development, and finally, Standard 2, on performance in reporting.

Here are the violations:

  1. Be “grossly negligent” in conduct. (Conduct section of the Ethics Rule).
  2. Fail to keep records, willfully or knowingly. (Record Keeping Rule)
  3. Fail to use “care” in identifying the client is used again in an identical sentence 8 times! It must be important!  “Violation” shows up (with identical words and paragraphs) in reporting standards 2, 4, 6, 8, and 10, twice each in rules 2, 8, and 10.

Let’s look at each of these in turn.

Violation A:  Gross negligence  

What is gross negligence?  My Blacks law dictionary defines it [paraphrased] as intentional failure to perform a duty in reckless disregard of the consequences.  In the context of what are administrative law or rules, such as USPAP, we are judged on two elements of Standard 1:  what would our peers do, and what do users expect.  In the context of Standard 3, the reviewer in turn has five words to follow:  completeness, adequacy, accuracy, relevance, and reasonableness.

Hopefully this clarifies everything about avoiding gross negligence.  We only need to note who is making the judgment of intentional reckless disregard.  Is it the lay unlicensed non-appraiser, the licensed appraisal reviewer, or the regulatory group, which may or may not be competent in valuation?

So be not grossly negligent.  (Is less-than-gross ok?)  The judgment is made by whoever decides to make the judgment, whether they are qualified or not.  Competent or not.  Biased or not.  Self-interested or not.  Believable or not.

Violation B:  Failure to keep records

Next, we look at willful or knowing failure to comply with the record keeping rule.  This requires a look at the word “must.”  This rule has a bunch of musts.  Basically, it means a workfile, to include the name of the client, copies, summaries, and “all other data, information, and documentation necessary.”  It also means keeping custody and availability of the workfile.

Clients generally do not have access to our workfiles.  Reviewers generally do not have access to our workfiles.  Usually the only time this “violation” comes out is if someone, somewhere files a complaint.

Violation C:  Failure to “use care in identifying the client”

Be careful!  “An appraiser must use care when identifying the client.”  This must be important, because these exact words are used eight times in the reporting standards 2, 4, 6, 8, and 10, twice in standard 2!

So, there you have it.  Here are the three violations:

  1. Be grossly negligent. 
  2. Fail to keep records.
  3. Fail to use care in naming the client.

All else is someone else’s use or misuse or abuse of the word:  violation!