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Have questions about compliance with USPAP

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Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Over the past four months I have done two appraisals for two different lenders. Yesterday I got a call from two more different lenders asking me to recertify my original appraisals or do two new ones for them. Taking the old lenders name out and putting theres in the appraisals.
Both borrowers had given my appraisal to the new lenders. The old lenders would not give the new lender a release.

The barrowers had drop the first two lenders and were now going with someone else now.

The kicker is I have not been paid for the first two appraisals. :x

I feel that I would be in volation of USPAP if I did new appraisals or if I recertified the old ones. :roll:

Any input would be of great help. 8)
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Yes you would be. Don't do any more work on this case until you have been paid....you hold the hammer. The lender who ordered the appraisal owes you the fee...demand payment now!
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Mike hon,

I think you need to go study the new USPAP and interpretations thereof again.

Ray: According to the class I took last summer as taught by Danny Wiley Chaiman ASB (Appraisal Standards Board: the ones who write USPAP), and Stephanie Coleman - Ethics Director of Screening - Ethics and Counseling - Appraisal Institute:
USPAP does NOT prohibit your taking on a new assignment on a property which you have previously appraised, and producing a appraisal REPORT even if you did one earlier on the same property. The previous 'rules' (interpretations) about a market change or time or yada yada ya apparently no longer apply.

The client owns the REPORT. The intellectual property (the appraisal) is YOURS to sell wherever and to whomever you may.

Now Personal/business ethical responsibilities to the original client's is another matter, but that YOU have to decide. I would not want to hack off a good and regular client. I have little compunction about my loyalty to persons/business entities who fail to pay for my work, AND refuse to relinquish the appraisal to someone else so that I can receive my pay for another party. Be very careful that IF you accept a documented reassignment that there is specific provision for your reimbursment included. I would get an order from someone FIRST the reassignment or assurance that cleint #2 understands that they are responsible for full payment (MY preference is my money from SOMEONE up FRONT :evil: ) With out of the goodness of my heart a possibility of some reimbursement on the basis of discount for work previously completed.. IF I manage to acquire the original payment due.

The prohibitive interpretations previously (and unevenly) taught by USPAP instructors are apparently out. New rules are IN.

IF you are a member of the Appraisal Institute, go ahead and call or write the Institute... I do not believe there is yet a clearly written document on this matter, but I have my class notes annoted as to date, instructor(s) and time. (AND personal PUBLIC assurances of the instructors as to the veracity of this information AND the names and addresses of my classmates as backup).

~~~~~~~~~~~~~

The payment thing is another and seperate matter: you need to collect for your work from the original clients through whatever means available to you.

What you charge for the seond report is likewise up to you. Reccomendations range from 'whatever the market will bear' to a 'nominal retype fee'. hence my comments above. You are enjoined to charge no particular fee for ANY of you work. Business decision all YOURS.

The CATCH is that you should probably reinspect (that covers your rear on the any potential issues of confidential information 'owned' by original client), and you MUST consider any new information found in the market as of the effective date of the appraisal, which remember is NOT the signature date. Me I 'd make darn sure I covered anything recent as well.

You CANNOT do an update of the appraisal as the REPORT you would be referring to is "OWNED" by the jerks who didn't pay and didn't release :evil: .

Hope this helps!
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
I don't think this rule has changed, Dee Dee:

Confidentiality:

An appraiser must protect the confidential nature of the appraiser-client relationship.

An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.

An appraiser must be aware of, and comply with, all confidentiality and privacy laws and regulations applicable in an assignment*.

An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law; and a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation. It is unethical for a member of a duly authorized professional peer review committee to disclose confidential information presented to the committee.

It's a bummer when some clod who hasn't paid you can use the rules against you, but that may be happening this time. I think Mike is right, and I wouldn't do an assignment for the new guy until the old client's purpose has been satisfied.

One suggestion: call the first client and demand payment, if they don't want to pay, suggest releasing the appraisal to the second client - then, if they will, demand payment from the second client in advance.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Steve:

While I appreciate your calling me Dee Dee (Really- I consider it a compliment! :D )

I heard and agressively questioned this facet of USPAP in front of the cited sources of information. THEY stated repeatedly that this acceptance of a subsequent assignment is O.K. and NOT prohibited! You need to be careful NOT to disclose any truely confidential information: defined as anything the original client gave TO you which would not otherwise be avaiable to you, but other than that you are entirely free to accept the NEW assignment.

The logic is that the amount of truely confidential information is quite limited, far more so than you might think based on what we have for years been TOLD to think....

I consider the Chair of the ASB and Director of Screening AI to be reputable sources. :usa

IF you take my attitude on this forum, square it by the fact that (like yourself) I have had it drilled into my head for YEARS that one had a cleint confidentiality issue to uphold, and then place me in person in front of someone of authority telling me I was NOT required to decline that subsequent assignment ... :? 8O :eek:nfire: :? :agrue: the instructors are going to get some serious grilling about how the new rules work!!!

I am no more shy about challenging things in person than on this forum. :2gunfire:
TRUST that I asked a LOT of questions and posed a number of very specific scenario's. I amused the heck out of some General Appraisers for whom this is not as often an issue. :roll:

I am SURE both Stephanie an Danny remember me as an individual :oops: Since I demanded and STATED that I was asking in front of witnesses that they give us their WORD that they would PERSONALLY stand behind me/us if we were challenged by a state licensing board on this issue. Mouthy twit that I am.... no joke, those were my very words.

I GOT the reassurance :!: :beer: , which is why I took specific note of my classmates names and addresses and such--that part was NOT a casual exercise. :twisted: :twisted:

~~~~~~~~~~~~
in an aside: Ask Rich Heyn why he remembers me 4+ YEARS after taking a class from him... If I think/know I am right: I don't back down - and IF you are going to prove yourself more right, best be prepared to back that proof up with something more heavily weighted than what I am going to throw! In Rich's case I sent pictures to prove MY point :wink: A gracious gentleman for sure!
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I think Mike is right, and I wouldn't do an assignment for the new guy until the old client's purpose has been satisfied.

When the borrower walked off and decided to get a new lender was the "Purpose" of the appraisal not satisfied at that point? They pulled their loan request that use was finished. Now you are free to do a new appraisal.

I side with Lee Ann but for different reasons. But do a new inspection, new "as of" date, new assignment. No problem.

As for the fee's I would want to be paid before I did anything else also.
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
Lee Ann-

Thanks for the information--very helpful.

Ray-

If Lee Ann is correct (appears she is) I'd charge an additional fee, and make sure you get paid. I've had situations in which I had serious doubts that I was gonna get my payola. I demanded the money upfront first. Mike G's right in this regard--you are holding the hammer--funny how the other side doesn't seem to understand this fact.

I've got to cash a check this morning (this scenario happens a few times a year to me). Once I have the money in my hands they'll get the report and not a moment sooner. I've been stiffed toooooo many times in the past.

-Mike
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Guess that is why I failed the USPAP instructors test!

I still don't agree, but you could be right. You can do a new appraisal but you can't just change the name on the original report and be in compliance without a release from the client. Looks like something that needs to be fixed because it is conflicted.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
:lol: :lol:

I arsked THAT one also. 8)

The fact that you wind up with the same exact value conclusion, logic and etc is immaterial... Tis a new report and so valid/legal/okey-dokey etc...

However in personal use, I tend to find there is almost ALWAYS something I shoulda-woulda said iffin I wasn't in such a hurry on the original report :oops: even if it took me a week to write :oops: so I add it anyway :roll: Et voila! a really new or at least modified report :wink:.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
If the new request requires a new date, you have a new request; hence a new appraisal (per USPAP). You are free and obligated to use any and all information that you have or can gather on the property in order to meet the requirements of your client. There is no confidential information contained in the old appraisal that must be withheld from the new appraisal other than the name of the first client. All other information is in your appraisal library of data or in public records. The information is either yours or is public knowledge. Do the new appraisals. You are free to charge anything you wish for this service.

Don't link the payment for the first with the work for the second. These are two different clients and two different orders. Bad business linking them.
 
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