Intended User for Litigation Appraisal

[Mike Kennedy]

As the world does...........

Another opinion...

......"amost everybody in court except the appraiser seems to think an appraisal is useful regardless of the intended user who was supposed to be. It seems to have something to do with us saying at one point that an appraisal is an objective, independent opinion of value, that does not represent any sort of advocacy whatsoever, and then, in another, say no-one else other than the intended user can rely on it. People outside of our profession seem to have difficulty wrapping their minds around those concepts. They sort of seem to think we can't have it both ways."

a. except an Ethical Judge.

So, USPAP and us makes a big deal out of intended user.

b. in court - it is.

"I guess you need to fill in intended user someplace in the report and then you are USPAP compliant, which is definitely important to appraisers, but don't count on it helping you much if some non-appraiser uses your report and then has questions about it."

c. unless the "non-appraiser" is not part of the litigation (attorney or judge or court appointed rep) .......see USPAP Confidentiality......which exists to protect the Client AND the Appraiser.

"Why don't we try looking at the world the way the world does?"

d. Edd did you mean as "Enron" and "Fannie" and politicians do????? Hope not.

Our blanket of intended user has holes in it. Rich gave you the USPAP answer.

e. Yes he did.

merely some thoughts in rebuttal ..............

 

[xm72mhd]

As the title of the thread shows, the intended use is litigation. So how does a rational appraiser explain that he or she does not “intend” that the litigants and the trier of fact use the appraisal.

Most excellent.

Where does USPAP get these things, and why? Now that the intended user has been discussed and Steven so effectively dispatched the silliness of the concept in the context of litigation, talk to a lawyer about what you are getting yourself into when you cross litigation with your opinions. Sort of like being a goldfish in a pirahna tank.

 

[Mike Kennedy]

he/she doesn't, isn't required to; only state the Client's intended use and the Client as the Intended User.

 

[xm72mhd]

Another opinion...

e. Yes he did.

merely some thoughts in rebuttal ..............

Perhaps there was a thought in there, but it looks like history repeating. You can believe it if you wish, but its dogma Mike, dogma. The comment about the world had to do more with thinking and speaking in a recognized language instead of what has been invented for appraisers and that USPAP instructors are busy peddling to appraisers.

Show me that intended user has mattered to a court until it comes an issue in appraiser liability. And then show me a case where confidentiality has mattered at all. I have read one bankruptcy case where an appraiser was prevented from testifying because the judge read the ASA confidentiality provision and decided the creditor had an expectation of confidentiality when it hired the appraiser and the appraiser could not now appraise or testify for the debtor. How's that for an unintended twist on confidentiality? Judge turned confidentiality into a conflict of interest without so much as wink. And us appraisers thought we know what it meant. The people who write USPAP and teach USPAP instructors really need to look a little further. Its a growing document and its a good thing, but it is much misunderstood, to a large degree because it is taught as accepted law. It is not.

 

[Mike Kennedy]

the judge read the ASA confidentiality provision and decided the creditor had an expectation of confidentiality when it hired the appraiser and the appraiser could not now appraise or testify for the debtor.

rightly so. See Confidentiality, USPAP. The Client was the creditor.

 

[Fred]

he/she doesn't, isn't required to; only state the Client's intended use and the Client as the Intended User.

Of course he/she is required to identify and state the intended users. That is certainly articulated enough times in USPAP.

Show me that intended user has mattered to a court

It could matter. In your perusals, have you even come across the word, “Daubert?”

 

[Mike Kennedy]

[ Of course he/she is required to identify and state the intended users. That is certainly articulated enough times in USPAP.

USPAP SMT-9

An appraiser’s obligations to other intended users may impose additional development and reporting requirements in the assignment. It is essential that an appraiser establish with the client a clear and mutual understanding of the needs of all intended users prior to accepting an assignment. An appraiser’s obligation to intended users other than the client is limited to addressing their requirements as identified by the appraiser at the time the appraiser accepts the assignment.

Neither the client nor the appraiser is obligated to identify an intended user by name. If identification by name is not appropriate or practical, an appraiser’s client and the appraiser may identify an intended user by type.

A party receiving a report copy from the client does not, as a consequence, become a party to the appraiser-client relationship.

Parties who receive a copy of an appraisal, appraisal review, or appraisal consulting report as a consequence of disclosure requirements applicable to an appraiser’s client do not become intended users of the report unless the client specifically identifies them at the time of the assignment.

......Court Venues change, Attorneys change, until this changes, Confidentiality stands.

Example: (paraphrased) As of the Effective Date of Appraisal... ..the Intended User is the Client, Mr. Tom Jones, Attorney at Law, the Intended User is his client, Mr. Joe Blow. The Intended Use of this Appraisal is to ascertain Market Value for the Subject Property for Litigation Purposes.

 

[Walter Kirk]

Never ever do anything for litigation until you are engaged by an attorney. This doesn't mean that you can't collect your fee from the property owner, just that the attorney is your client and the attorney is the intended user.

After reading your discription of the situation a few questions come to mind. Who has title to the the land in question? Was there a broker involved in the purchase? How did the appraiser treat the situation upon purchase? Is there a survey? Is a title insurance company involved? This could be a really interesting assignment as well as complicated, have fun!

 

[Mike Kennedy]

Additional USPAP

he/she doesn't, isn't required to; only state the Client's intended use and the Client as the Intended User.

AO-27) Illustration: Example A - Answer
No, assuming confidential information is handled correctly. However, there are common business practices in such circumstances. Often, the opposing parties each hire an appraiser to appraise the subject property. If the opposing parties do not plan to hire one appraiser jointly, each party could make it a part of the agreement between the appraiser and the client (the engagement letter or contract) that the appraiser is not to appraise the property for anyone representing the opposing side of the legal action.



In the absence of such an agreement between the client and the appraiser, the appraiser should consider the presence of confidential information. The knowledge of confidential information may prevent the appraiser from accepting the second assignment. The appraiser must decline the second assignment if:

the appraiser used confidential information in performing the first assignment;

that information would not be available from any other source; and

credible results cannot be derived without the use of this confidential information.

However, the appraiser may accept the second assignment, making sure to not disclose any confidential information from the original assignment to the second client, if

he information is available from another source (meaning it is not confidential information, as defined); or

the confidential information is not material to deriving credible assignment results.

However, the appraiser must ensure that confidential information is not disclosed, even if it has no impact on the assignment results (such as the litigation strategy of attorneys representing the first client).

 

[xm72mhd]

the judge read the ASA confidentiality provision and decided the creditor had an expectation of confidentiality when it hired the appraiser and the appraiser could not now appraise or testify for the debtor.

rightly so. See Confidentiality, USPAP. The Client was the creditor.

You missed the point Mike, but away we go away on the confidentiality cruise again. It was about time. Some appraiser's need to think the USPAP brand of confidentiality means they are father confessors or something of the sort.