Re-posted 3-9-09

Page 22

At mid-page, add the following section at the end of the section entitled Hypothetical Condition:

Jurisdictional Exception

A jurisdictional exception is another type of assignment condition that is established by applicable law or regulation which precludes the appraiser from complying with a part of USPAP. If any section of USPAP is contrary to applicable laws or regulations, then the appraiser is excused from complying with that section of USPAP. Jurisdictional exceptions preserve the balance of USPAP if one or more of its parts is in conflict with local laws or ordinances. Jurisdictional exceptions must be disclosed in the report. Jurisdictional exceptions rarely impact the personal property appraiser.

An example might be an appraisal done for the probate court in a state which has a statute stipulating that appraisal fees for these types of assignments shall be based on the appraised value of the property — an obvious violation of USPAP which prohibits such a contingency fee. This is an example where the Jurisdictional Exception Rule applies. In order to comply with the requirements of the Jurisdictional Exception Rule, the appraiser must disclose in the appraisal report the reason(s) that prohibit compliance with the USPAP prohibition against contingency fees, and cite the basis for the jurisdictional exception.