Confidential information, and how it applies to me.

[Billy Bibbit]

I am a very recently licensed appraiser, just about to begin the arduous work of trying to make a name for myself. Hip hip hooray! I am fortunate to have a very competent trainer, who is willing to help me get started by referring some work my way. I worked as my trainers assistant, and provided clerical work for them. In this role, I was privy to some confidential data. Now that I am licensed, and want to work for myself, I need to ensure my future work association with my trainer will not violate any laws or ethics.

In our ideal work environment moving forward, it would be beneficial for us to share data with each-other to aid in our respective work, as well as share a computer system (that would necessarily grant us access to each-others files.) I've searched through the forum and google to find this question and have bee unsuccessful. Far as I can tell the regulations I have to worry about are USPAP and the Graham Leech Bliley act. USPAP seems to speak more to the disclosure of said confidential information, and not the actual access. E.G: "An appraiser must ensure that employees, co-workers, sub-contractors, or others who may have access to
confidential information or assignment results, are aware of the prohibitions on disclosure of such information or results."

My trainer advised me to speak to a lawyer, however, I don't expect a lawyer to be intimately familiar with USPAP, and the appraisal process. Unless perhaps I reach out to a lawyer who is employed by an E&O insurance company.

My questions are as follows:
1. If we are both shared owners in a parent corporation, would that relationship protect both of us from sharing confidential information with each other? Would we also be free to review each-others work to constructively criticize it?
2. Being in the same office I would be able to see private and confidential information, but so long as It is not disclosed to the wrong people (per USPAP), am I good?
3. Am I under other regulations of which I am not aware? I searched through my state code and didn't observe anything readily apparent regarding confidential information relating to a licensed appraiser.

I see a few categories of sensitive information to which I would have access.
1. Assignment results. (these would be helpful to me as a reference point, but I understand I would not be able to use them as a data source in my own appraisals.)
2. Appraiser-Client information. (This would be available to me, as a matter of being in the same office environment. It is no use to me as far as I can tell. I would have no use in disclosing any of this data to anyone, and would protect it the same as I am required to protect my own data.)
3. Appraiser data (calculations, research, paired sales, analysis, adjustments, etc). (It is my understanding that, if my trainer is willing to share any of this with me, it is at their sole discretion, aside from portions of such information that was obtained from private sources.)

 

[Terrel L. Shields]

With an agreement between the two of you not to disclose information that is confidential, you both should be covered. Find an administrative lawyer and see what they say and have them write up an agreement. They should be familiar with G-L-B law and if you are covered there then USPAP is pretty much a given.

 

[TerryRohrer]

If I were seeking an attorney's advice in this matter, I would contact Ted Whitmer in Texas. He is both a certified general appraiser and an attorney engaged in educating and defending appraisers.

Ted Whitmer Companies

 

[TerryRohrer]

Here are a few discussions in a similar vein:

https://appraisersblogs.com/apprais...praiser-a-violation-of-USPAP-confidentiality/

Disclosing Info To Fellow Appraisers

I received an email from a fellow appraiser looking to verify information for a recent sale(Our MLS provides the appraiser info in the listing). It is new construction and he wants to verify data including any seller's concessions. The property ended up selling for its original contract price...

appraisersforum.com

Nothing you are proposing reaches the level reported here, but is a cautionary tale with a good summary of the issues.

https://appraisersblogs.com/apprais...ips-big-claims-USPAP-absurdity-and-subpoenas/

 

[Fernando]

So you are both working independently but share files with each other? Would your clients mind that?
Do you have an agreement between the two of you in how to deal with such situations?

 

[George Hatch]

I see a few categories of sensitive information to which I would have access.
1. Assignment results. (these would be helpful to me as a reference point, but I understand I would not be able to use them as a data source in my own appraisals.)
2. Appraiser-Client information. (This would be available to me, as a matter of being in the same office environment. It is no use to me as far as I can tell. I would have no use in disclosing any of this data to anyone, and would protect it the same as I am required to protect my own data.)
3. Appraiser data (calculations, research, paired sales, analysis, adjustments, etc). (It is my understanding that, if my trainer is willing to share any of this with me, it is at their sole discretion, aside from portions of such information that was obtained from private sources.)

This is a thoughtful question for an appraiser to be considering. I wouldn't spend a lot of energy worrying about it, though. So long as you approach the issue with a little consideration you'll never have a problem with confidentiality. And unless you burn your bridges with your supervisor you won't have any problems accessing your records in the unlikely event someone files a complaint or sues you.

What they're aiming for with Confidentiality is to prohibit the appraiser from handing out their client's results to the clients competition or adversaries. Which you don't really want to be doing anyway when considering you're trying to protect the legitimate interests of your client. The Confidentiality section then provides cover for what an appraiser would otherwise choose to do anyway if they were thinking about it.

Let's say you did an assignment for Client A and Client B is trying to sneak into the deal without have to obtain or pay for an appraisal. You don't want to burn your relationship with Client A because client relationships are valuable; they're hard to build and easy to lose. Besides, regardless of what Client B is telling you about thinking you're great and they want to use you from now on, this is still a 1-time deal. "There's No Love in the Champagne Room" at the strip club and there's no new client relationship to be had with the pirate Client B who'se trying to sneak in and swipe Client A's load file.

In any case, the prohibitions in the Confidentiality section enable an appraiser to respond to Client B (or the opposing side of a lawsuit or divorce) request to hand over Client A's appraisal with "Gee, I'd LIKE to help you stab my client in the back but I can't. It's prohibitado. If the roles were reversed I'd do the same for you.".

WRT assignment results, there's basically nothing about the property's physical attributes that would fall under that category in an SFR appraisal. It's your analyses opinions and conclusions that you would need to protect. The property attributes or any other info that would be available in the public records or an MLS listing don't become protected just because an appraiser had their hands in it.

 

[RCA]

I am a very recently licensed appraiser, just about to begin the arduous work of trying to make a name for myself. Hip hip hooray! I am fortunate to have a very competent trainer, who is willing to help me get started by referring some work my way. I worked as my trainers assistant, and provided clerical work for them. In this role, I was privy to some confidential data. Now that I am licensed, and want to work for myself, I need to ensure my future work association with my trainer will not violate any laws or ethics.

In our ideal work environment moving forward, it would be beneficial for us to share data with each-other to aid in our respective work, as well as share a computer system (that would necessarily grant us access to each-others files.) I've searched through the forum and google to find this question and have bee unsuccessful. Far as I can tell the regulations I have to worry about are USPAP and the Graham Leech Bliley act. USPAP seems to speak more to the disclosure of said confidential information, and not the actual access. E.G: "An appraiser must ensure that employees, co-workers, sub-contractors, or others who may have access to
confidential information or assignment results, are aware of the prohibitions on disclosure of such information or results."

My trainer advised me to speak to a lawyer, however, I don't expect a lawyer to be intimately familiar with USPAP, and the appraisal process. Unless perhaps I reach out to a lawyer who is employed by an E&O insurance company.

My questions are as follows:
1. If we are both shared owners in a parent corporation, would that relationship protect both of us from sharing confidential information with each other? Would we also be free to review each-others work to constructively criticize it?
2. Being in the same office I would be able to see private and confidential information, but so long as It is not disclosed to the wrong people (per USPAP), am I good?
3. Am I under other regulations of which I am not aware? I searched through my state code and didn't observe anything readily apparent regarding confidential information relating to a licensed appraiser.

I see a few categories of sensitive information to which I would have access.
1. Assignment results. (these would be helpful to me as a reference point, but I understand I would not be able to use them as a data source in my own appraisals.)
2. Appraiser-Client information. (This would be available to me, as a matter of being in the same office environment. It is no use to me as far as I can tell. I would have no use in disclosing any of this data to anyone, and would protect it the same as I am required to protect my own data.)
3. Appraiser data (calculations, research, paired sales, analysis, adjustments, etc). (It is my understanding that, if my trainer is willing to share any of this with me, it is at their sole discretion, aside from portions of such information that was obtained from private sources.)

For me, two central questions would be: (1) Whose name the E&O Insurance is under and (2) Whether the Corporation's name is on legal contracts and appraisals. Did you both take your E&O insurance out under the name of the Corporation? That is what I do through LIA. For example, I have:

Customer ID: XXXXXXX
Name Insured:
PACIFIC VISTA NET
William Bert Craytor
242 Clifton Rd
Pacifica, CA 94044
......

If you are both working for the corporation, - which is a separate legal entity, and all contracts are in the corporation's name, then the agreement is between the client and the corporation. Yes, of course, if there is a complaint with your work YOU will get reported to the State Board - and YOUR license will be at risk. But the legal liability would, I assume, be against the corporation. Of course, it all depends on the details and your state laws --- so you should consult an attorney.

If you don't have your i's dotted and your t's crossed with respect to your relationship to the corporation, so that perhaps you and your previous supervisor are not really working for the same corporation as far as contracts and insurance goes, then you may have a problem, maybe several. But then again, I couldn't give you legal advice - even if I knew the details.

 

[Billy Bibbit]

So you are both working independently but share files with each other? Would your clients mind that?
Do you have an agreement between the two of you in how to deal with such situations?

That's what I'm trying to figure out. If we work on our own files but are under an "umbrella" corporation, or have some other formal agreement that would protect our clients data from unauthorized distribution, would we then be able to share information with each-other. I'm not going to ask every client if I can share their information with my co-worker. I am trying to find a legal and ethical way to share it without needing their express permission.

We are drafting up our agreement now, to hopefully avoid issues in the future.

 

[Billy Bibbit]

For me, two central questions would be: (1) Whose name the E&O Insurance is under and (2) Whether the Corporation's name is on legal contracts and appraisals. Did you both take your E&O insurance out under the name of the Corporation? That is what I do through LIA. For example, I have:

Customer ID: XXXXXXX
Name Insured:
PACIFIC VISTA NET
William Bert Craytor
242 Clifton Rd
Pacifica, CA 94044
......

If you are both working for the corporation, - which is a separate legal entity, and all contracts are in the corporation's name, then the agreement is between the client and the corporation. Yes, of course, if there is a complaint with your work YOU will get reported to the State Board - and YOUR license will be at risk. But the legal liability would, I assume, be against the corporation. Of course, it all depends on the details and your state laws --- so you should consult an attorney.

If you don't have your i's dotted and your t's crossed with respect to your relationship to the corporation, so that perhaps you and your previous supervisor are not really working for the same corporation as far as contracts and insurance goes, then you may have a problem, maybe several. But then again, I couldn't give you legal advice - even if I knew the details.

From what I've done with my supervisor as far as I can recall, almost everything in contract with the client and the insurance is in the name of the appraiser, and not in the name of the parent corporation. I don't really know how appraisal firms work, as I've only ever worked for my trainer.

 

[Billy Bibbit]

Thank you all for your responses. I'll reach out to some administrative lawyers familiar with my state and see what i can figure out.

I'm looking forward to my participation on this forum. Hopefully I will be contributing soon, and not just asking for advice.