Reuse of Workfile Materials

[seekingAppAdvice]

Hypothetical: An appraiser is retained by a bank to appraise a residential property for a construction loan. During that lending assignment, the appraiser obtains a copy of the borrower's signed construction contract from the bank (provided as part of the loan file) because there was no house yet built to actually appraise (it was a construction loan). The appraiser completes the bank assignment and gets paid.

A year or two later, the local municipality happens to hire the same appraiser to appraise the property on their behalf in a property tax dispute the owner filed. The appraiser takes the construction contract from the old work file, uses it again in the new appraisal, and gives it to the municipality for use against the homeowner in the property tax dispute.

The borrower/property owner allegedly never authorized the appraiser to share the contract or the information in it with anyone and the contract wasn't available anywhere else.

Bueno or no bueno?

 

[J Grant]

Client confidentiality - the bank was your client on the first appraisal, not the homeowner. IMO this breaches the client confidentiality rule.

 

[KHS445]

I am not knowledgeable of property tax assessments in New York. IMO there are two issues here; first is confidentiality and second is valuation. I believe the appraiser violated the confidentiality as they disclosed information that was not publicly available. Most property tax assessments are based on market value. The construction contract could have resulted in a home that was either under built or over built. So while one of the three main methods of valuation, I would think the construction costs would be secondary to the sales approach.

I also have to wonder if the appraiser adequately disclosed the fact that they had previously appraised the subject. Myself, I would have probably turned down governmental request, primary due to the competing interest of the homeowner/lender and the local municipality.

 

[DWiley]

Reminder :


Did the client provide the info to the appraiser and identify it as confidential when providing it? Is it available from another source? Is there an applicable privacy law or regulation?
Those are the questions that must be answered before one can respond to the OP.

 

[George Hatch]

Permissible or not I think this would be a high risk assignment to take. The two parties are in dispute. There's no good reason to wander anywhere near the potential of being accused of a conflict of interest or confidentiality dispute.

I don't normally duck assignments over technically demanding situations, but I try to avoid situations where my integrity might be challenged.

 

[Tom4value]

First off, the borrower/homeowner has no argument since they weren’t the client, the lender was. Any concern would be if you violated USPAP.

Second, define the contents of the “contract”. Do you mean the plans and specs? If so, then you are fine. Factual information, regardless how many, if any, other people have access to it, is not confidential. Therefore, it is not a breach of shared.

If the contract contained any information on negotiation of terms then it might be a gray area, I don’t know. It certainly wouldn’t contain any of your opinions/conclusions or anything that involved you so…..

 

[Tawfik Ahdab]

George wrote:

“I don't normally duck assignments over technically demanding situations, but I try to avoid situations where my integrity might be challenged.”

So you must be avoiding any testimony work in court, since the first thing them sumbetch lawyers will do is exactly that: challenge your integrity.

“The first thing we do, let's kill all the lawyers"
Shakespeare
Henry VI, Part 2 (Act 4, Scene 2),

 

[George Hatch]

George wrote:

“I don't normally duck assignments over technically demanding situations, but I try to avoid situations where my integrity might be challenged.”

So you must be avoiding any testimony work in court, since the first thing them sumbetch lawyers will do is exactly that: challenge your integrity.

“The first thing we do, let's kill all the lawyers"
Shakespeare
Henry VI, Part 2 (Act 4, Scene 2),

Good point

 

[JTip]

the construction contract....

If the data is available from a public or paid source, then I would reuse it (ie deed or MLS sheet).

If not, someone is in trouble.