FRE 702 and USPAP: Meeting Both Standards for Admissible Appraisal Testimony

Time to Read: 3 Minutes
Technical Level: Moderate

How USPAP and legal standards define credible valuation testimony

Rule 702 of the Federal Rules of Evidence (FRE 702) governs expert testimony in federal court. Its most recent significant amendment for expert witnesses took effect on December 1, 2023, requiring judges to find, by a preponderance of the evidence, that an expert’s opinion is:

1. The product of reliable principles and methods
2. Based on sufficient facts or data
3. A reliable application of those methods to the facts of the case

The amendment replaces prior inconsistent applications of Daubert and makes admissibility more rigorous. Now, a court must evaluate not only whether an appraiser uses recognized valuation methods, but also whether those methods are applied correctly to the facts.

Why the Change Matters

The 2023 amendment to FRE 702 was prompted by decades of inconsistent application of the Daubert standard across federal courts. In practice, some courts applied only limited scrutiny to expert testimony, allowing it to be admitted with minimal evaluation of reliability, and leaving most credibility questions for the trier of fact. The revised rule makes clear that the judge must decide, by a preponderance of the evidence, that the testimony meets all requirements before it is heard.

For appraisal experts, this change means the court will not only look at whether recognized valuation methods were used, but also whether those methods were applied correctly to the specific facts of the property and the case. It is essential that the appraiser appropriately identify the appraisal problem at the outset, which includes determining the correct property rights to be appraised, applying extraordinary assumptions or hypothetical conditions correctly, and ensuring that the resulting analysis, such as highest and best use, is appropriate for the intended use and can inform the court’s decisions. From there, the analysis and conclusions must be supported by reliable data and reasoning that can withstand detailed judicial review.

Although FRE 702 applies in federal courts, many states are expected to adopt similar standards. This higher level of review may soon become common in both federal and state litigation, making it critical for appraisers to be prepared for detailed scrutiny of both their methodology and its application. In Florida, for example, Florida Statutes § 90.702 — Testimony by experts establishes a similar standard.

How USPAP Aligns with FRE 702

The Uniform Standards of Professional Appraisal Practice (USPAP) establish the minimum ethical and performance requirements for licensed appraisers. While USPAP is not a law, it is adopted in most states and mirrors many FRE 702 requirements. USPAP requires appraisers to:

• Be competent for the assignment
• Maintain independence, impartiality, and objectivity
• Use recognized methods and credible data
• Explain reasoning and conclusions clearly

When an appraisal violates USPAP by omitting relevant data, lacking clear reasoning, or showing bias, it risks both professional censure and legal exclusion under FRE 702.

Where USPAP Failures Create Legal Vulnerability

USPAP compliance is more than a professional obligation. It can determine whether an appraiser’s opinion survives in court. When appraisal reports fall short of USPAP’s requirements, the weaknesses often align with the specific admissibility standards in FRE 702. The table below outlines common USPAP failures and how they can create direct legal vulnerabilities under the revised rule.

The revised FRE 702 shifts some of these risks from being “weight of the evidence” issues to outright admissibility barriers.

Spotting Issues Before They Become Court Problems

Attorneys and clients do not need to be appraisal experts to identify red flags. Before relying on an appraisal in litigation, ask:

• Is the scope of work clearly defined and aligned with intended use?
• Is the reasoning transparent and logically supported?
• Does the report maintain neutrality, or does it read like advocacy?
• Are the appraiser’s qualifications relevant to this specific case?
• Is the methodology applied consistently to the facts?

When the valuation issues are complex or the report is difficult to interpret, seeking guidance from an appraiser familiar with both USPAP and evidentiary standards can be a practical next step. A brief consultation can clarify whether the work has weaknesses that may affect its credibility or admissibility before those issues surface in court.

---

The Bottom Line

Under revised FRE 702, appraisal testimony must meet both professional and evidentiary standards. USPAP ensures credibility within the profession, while FRE 702 ensures admissibility in court. The overlap is significant, but not identical.

Appraisers should anticipate deeper judicial scrutiny, more frequent challenges, and the need for detailed support connecting methodology to case-specific facts. An appraisal that meets both standards is far more likely to withstand legal challenge. One that does not may be excluded entirely, potentially ending a case before it begins.

Engaging an appraiser who understands both USPAP and evidentiary requirements can help identify and address vulnerabilities before a report is relied on in litigation. Such an appraiser can evaluate whether the work is not only professionally sound but also positioned to survive admissibility review. Even when an appraisal is admitted, a poorly supported opinion can be given little or no weight by the trier of fact, which can have the same practical effect as exclusion.

---