If an appraiser values a property with known contamination under an extraordinary assumption of it being uncontaminated, is this allowed by USPAP?

The assertion that an appraiser can value a property with known contamination under the extraordinary assumption of it being uncontaminated is valid, provided that reasonable attempts to verify the contamination status are made. Under USPAP, extraordinary assumptions are permitted when they are clearly disclosed in the appraisal report, and when the appraiser has a reasonable basis for believing that the assumption is true. In this scenario, if the appraiser has conducted due diligence to establish a foundation for the assumption, such as thorough research into the property's history, environmental reports, or consultations with experts, then this practice aligns with the ethical and professional standards set by USPAP.

Moreover, it’s crucial that the appraiser explicitly outlines the nature of the extraordinary assumption and its potential impact on the valuation in the report. Transparency in these circumstances helps to inform the client and users of the appraisal about the inherent risks and uncertainties associated with the assumption of uncontaminated status.

This approach allows appraisers to provide value assessments that could be essential for decision-making, while maintaining the integrity and credibility of the appraisal process.