USPAP Issues and Concerns – PART IV

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USPAP Blog Image Part IV

The 2014 USPAP Q&A publication had another interesting question that was posed to The Appraisal Foundation’s Appraisal Standards Board:

Question:

I have received inquiries from various companies regarding appraisals I have completed for others. Typically, I receive a letter that includes the address of a property I previously appraised, along with the effective date of my appraisal, and my appraised value. The letter asks me to confirm that the information agrees with my records, and also asks me to confirm that my appraisal was performed without violating any appraiser independence requirements. Since the company requesting the information was not my client, does USPAP allow me to comply with such requirements for information?

Response:

No. Unless you have received permission from your client, you may not communicate assignment results or confidential information (both, as defined in USPAP) to this third party (or any other entity that your client did not authorize).

The appraised value of a property is clearly part of an appraiser’s assignment results, as are any of the appraiser’s opinions or conclusions that are specific to that assignment. Additional examples of assignment results may include the appraiser’s opinion of highest and best use, condition of the property, and opinion of reasonable exposure time, just to name a few.

Acknowledging the fact that you performed an appraisal on a property is not prohibited by USPAP. However, in this instance, acknowledging assignment results or confidential information without permission from the client is prohibited.

There are also instances where appraisers contractually agree with some clients not to disclose the fact that an appraisal was performed; in such cases the appraiser’s contractual obligation would preclude the appraiser from ever disclosing the fact that an appraisal was performed.

Valuation Management Group has seen this type of request from audit verification companies hired by the lender. If they are doing the verification for your initial client it would be acceptable to get written permission from the client for the release of the information. If you were engaged by VMG on behalf of the client, we would be happy to assist in obtaining the written permission.

Valuation Management Group is a national, full service appraisal management company that manages the appraisal process for community banks, mortgage bankers and credit unions. We take the process from ordinary to extraordinary.

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