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client liability

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uncle sam

Junior Member
Joined
Aug 24, 2003
Professional Status
Certified Residential Appraiser
State
New Jersey
Recently completed job where interior paint damage was evident in a pre-1978 structure, sent report asking for repairs, client sent back letter stating that they would be responsible for paint damages and all liabilities it entailed, do inspection but paint damage would remain, and it would not be scraped and painted, is this possible to complete and transfer liability for a health hazard to the lender?
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
John,

The "subject to repair" must still be on your original report. If that was the only repair, the client does not have to order the completion report at all. That accomplishes his goal. You don't need a letter from him.

If there were other "subject to repair" items on your original report, he may want to order the completion report for you to verify those.

If everything but the paint was complete, just say so on the completion report. be careful not to check the box that says all items were complete. the answer to that question is "no".

This also accomplishes his goal of taking on the liability for not requiring completion of the paint repair.

The letter thing is unnecessary.

=====

Just in case ...

The one thing you don't want to do is violate FHA guidelines in any way. Regardless of the liability the client is willing to take on, don't let him dupe you into taking it by failing to stick to FHA guidelines. If you did that, no letter is going to help you out. You will have all the liability and the client will have none. The client cannot give you permission to violate the FHA guidelines.
 
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Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
Recently completed job where interior paint damage was evident in a pre-1978 structure, sent report asking for repairs, client sent back letter stating that they would be responsible for paint damages and all liabilities it entailed, do inspection but paint damage would remain, and it would not be scraped and painted, is this possible to complete and transfer liability for a health hazard to the lender?

I presume the client is the lender. Not a mortgage broker and not a "lender" who will package this loan among many others to send to investors. If it is an FHA loan, it would never be insured by them.

I would do nothing. Your report stands as you originally wrote it. If the UNDERWRITER wants to wave your requirement, so-be-it. But, you should not participate in this type of potential fraud.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
The underwriter can waive without you changing a thing, so don't. I had one where the owners had an inground pool that was actually an above ground pool built into the ground so that there was only a 4" lip above the ground. There was no fence, plus they had a 2 year old who didn't know how to swim. I called attention to the safety issue and made the report subject to a secured fence. The underwriter, after talking to the county planning department about it, decided that because it was an above ground pool the fence requirement was unnecessary and he waived the stipulation. I changed nothing. It was their own internal decision. The loan closed and I never altered my report.
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
The way you described it, the client sent you that letter as a "certification" so that you would not mention the peeling paint as NOT being repaired, the end result would then be that ALL of the liability would in fact be back on you.

As others have stated, if the client wanted to take the liability, all they had to do was "waive" the repair you called for... m2:
 
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