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Reliance Letter?

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KLJennings

Thread Starter
Freshman Member
Joined
Nov 14, 2006
Professional Status
Certified General Appraiser
State
North Carolina
What the heck is a "reliance letter"?

I did a search and found a discussion about re-assigning appraisals; but no answer as to what a "reliance letter" is.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Never heard of one, I'd ask the client what they need or are expecting.
 

Joe Moore

Junior Member
Joined
Jan 30, 2002
Professional Status
Appraisal Management Company
State
Pennsylvania
USPAP Q & A December 2006

SUBSEQUENT USER REQUESTS A“RELIANCE LETTER”

Question:

I delivered an appraisal report to my client. A week later, an entity other
than one of the identified intended users contacted me and asked that I
provide a “reliance letter,” enabling them to rely on the appraisal report for
their own investment use. My client says they have no problem with my
doing that. Can I provide this entity with such a letter, even though I had
not originally identified them as an intended user?


Response:

No. You cannot add what is in effect a new “intended user” after the completion
of an assignment, no matter what terminology you use.

USPAP defines Intended User as:
The client and any other party as identified, by name or type, as users of
the appraisal, appraisal review, or appraisal consulting report by the
appraiser on the basis of communication with the client at the time of
the assignment.

The proper way to handle this is to initiate a new assignment with this entity as
the client and provide them an appraisal, being careful to develop an appropriate
scope of work consistent with their own intended use.

This new assignment could be based on virtually the same data and analysis, and
the value conclusion might be the same. However, in the new assignment you
must consider the assignment elements most appropriate to the scope of work for
that client and the assignment, which could well be different from those of your
prior client.
 

Lost Cause

Senior Member
Joined
Sep 17, 2004
Professional Status
Certified General Appraiser
State
New York
Thanks for the definitive answer, Joe.

While some give you grief being in AMC management, I don't see how anyone can have a problem with someone who has Hank Pym as their avatar.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
What the heck is a "reliance letter"?

I did a search and found a discussion about re-assigning appraisals; but no answer as to what a "reliance letter" is.


Someone (some entity) wants you to add them as an Intended User "after the fact" (after the appraisal has been communicated to your Client). This is a BIG "no can do". Whoever is making the request wants you on their hook for the appraisal!
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
What if the original client ask you to add an additional Intended User?

This goes to the question of when does an assignment end.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
What if the original client ask you to add an additional Intended User?

I ask that question knowing the original client can give that appraisal out to anyone they feel like>



Per USPAP, any Intended User is to be identified at the time the appraiser is engaged for the assignment.
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Lee,

Disregard, I see the statment cleared up the confusing Standard.

The problem I was having with this rigid rule is that sometimes client forget or just leave someone out by simple omission.
 
Last edited:

Michigan CG

Moderator
Staff member
Moderator
Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
Thanks Joe. I would bet not many of your peers could find that information and many of mine either.

:beer:
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
What if the original client ask you to add an additional Intended User?

This goes to the question of when does an assignment end.

Ditto Lee.

USPAP defines Intended User as:
The client and any other party as identified, by name or type, as users of
the appraisal, appraisal review, or appraisal consulting report by the
appraiser on the basis of communication with the client at the time of
the assignment.



Barring error corrections, the assignment ends at the point of delivery.

The client has more standing than the other intended users and is the one who calls the shots at the time of the assignment.

It's part of the scope of work for the appraiser to identify the intended users and uses as needed by the client. The SOW can be modified during development stages but even the client cannot change the parameters of the assignment after delivery. If they want something new, it is a new assignment.
 
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