Confidentiality in using comparable sales or rentals

[Gobears81]

If you look at the confidentiality section of USPAP, it is somewhat vague on what should be regarded as confidential.

For commercial sales write-ups, reporting a cap. rate that wouldn't be available on a secondary source like MLS/Costar is commonplace. Or, a sale of an interest that wouldn't be recorded on public record.

I typically show redacted rental data, but see many appraisers openly use rental data that they obtain from their past appraisals.

Some engagement letters touch on what is and is not confidential, although for example, reporting on a write-up that a property has had an interior remodel when there is no information available publicly to indicate this does not seem to be such a concern.

This is a side that appraisers seem to be fairly protected or unconcerned about ramifications, but outside of reporting past appraised values, what is interpreted as a violation of confidentiality for USPAP purposes?

 

[Fernando]

For residential appraisals, I use what public information is available in my report.
However, when I do the reconciliation, I consider the confidential information in determining value.
If you get right value, you should be fine.

 

[Dublin ohio]

I consider the confidential information in determining value

What confidential information would that be?

 

[Fernando]

What confidential information would that be?

Information obtained from doing an appraisal on comps. Not even sure if you can disclosed that you did appraisal for comp used.

 

[George Hatch]

 

[Gobears81]

View attachment 79928

GH - is your interpretation of that then - as an example - we can use this information as comparable rentals or expense comps unless otherwise instructed by the original client?

And what might be classified as confidential by applicable law/ regulation? My USPAP copy doesn't have a footnote for that statement for some reason.

 

[Fernando]

Last week, I was taking a comp photo and adjacent neighbor came out.
First reaction is to drive away.
Then I thought about it and it would have been beneficial if I could introduce myself as an appraiser and extract as much information from that neighbor to get "inside" information on comp.
Would it be wrong to reveal what I was doing? Not sure if lender or subject owner want me to disclose my true intentions.
What do you think I should have done?

 

[George Hatch]

GH - is your interpretation of that then - as an example - we can use this information as comparable rentals or expense comps unless otherwise instructed by the original client?

I'm trying to not interpret anything for you. But as a general observation: It says what it says, and just as importantly, it doesn't say what it doesn't say. In this case that's a 2-part test: As instructed by the client AND not available anywhere else.

 

[Gobears81]

and just as importantly, it doesn't say what it doesn't say.

Yes, that does seem to be the case quite often

 

[bnmappraisal]

Very interesting question, Commish