Is it permissible for an appraiser to use an extraordinary assumption that the property is uncontaminated when the contamination status is known?

In the context of appraisal practice, using an extraordinary assumption requires a careful analysis of the facts surrounding the property in question. An extraordinary assumption is defined as an assumption that, if found to be false, could alter the appraiser’s opinion of value or the relevant characteristics of the property.

When the contamination status is known, it means there is factual data indicating that the property is contaminated. Therefore, it would not be permissible for an appraiser to assume that the property is uncontaminated without supporting evidence. This would not only misrepresent the condition of the property but could also lead to significant implications in the valuation process and mislead clients or stakeholders relying on the appraisal report.

In this scenario, using such an assumption despite the known contamination status would violate professional standards and ethics, compromising the credibility of the appraisal and potentially placing the appraiser in a legal jeopardy due to misrepresentation. Therefore, under these circumstances, it is clear that the appropriate action is to acknowledge the known contamination and reflect that accurately in the analysis.