When can you decline an assignment?

[J in Florida]

A question for the forum--

At what stage in the process can you decline an assignment; specifically, after field inspection of the subject property, can you then decline the assignment (and charge no fee) and be covered?

My buddy and I have a bet ( a beer)

 

[David S. Roberson]

I don't see why you can't decline to deliver an appraisal even after it's finished & signed. What are they going to do? You have broken no laws, nor have you violated USPAP. No one can force you to deliver an appraisal.

 

[Wally Jones]

Well, I guess you can just say no anytime you feel like it. However, USPAP sorta thinks we ought to complete what we start unless things change after we begin.

From USPAP Statement On Appraisal Standards No. 9 (SMT-9):

"An appraiser's obligations to the client are established in the course of considering and accepting an assignment. Once an assignment is accepted, an appraiser is obligated to complete the assignment as agreed and in compliance with USPAP. However, if an appraiser becomes aware of a change in the client's intended use of the report, the appraiser must consider whether the extent of the appraisal, appraisal review, or appraisal consultation process and type of report initially agreed upon are still appropriate, and if they are not, the appraiser must communicate with the client to establish an appropriate basis upon which to proceed."

Hope this helps.

 

[Dee Dee]

Just curious, J.....what made you decide that you wanted to back out of the assignment after the inspection?

Dee Dee

 

[Terrel L. Shields]

If I had any sense there are a lot of assignments I should have backed out of....

This also demonstrates the stupidity of USPAP when it, on the one hand implies you must complete what you start, but on the other hand, if you find the property is more complex or exceeds your license limitations, you must notify the client.

At this point USPAP (stupidly) suggests you find a Cert. Gen. appraiser to co-sign with. Fat chance. I never as a CR found a CG to sign a report already commenced and as a CG I will NEVER sign a report where I am not involved in the process from the beginning. Further, the client is not going to be willing to compensate the 2 appraisers with anymore money than they would expect to pay had they chosen the right appraiser for the job in the first place.

SMT 9 is a fraud and I am confident any court in the land would require the client to prove they had suffered damage because the appraiser could not complete the report. And that would be the rarest of circumstance. In a lending situation, the borrower might suffer some loss, but they are not the client and have no standing with the appraiser.

 

[Ray Ohler]

when accepting or declining an assignment. You have exposure and liability problems to contend with also. You are providing a service. You have a contractural relationship with the client BUT in a mortgage appraisal the borrower is also a third party. The "contract" CAN be verbal or written (enforceable either way) but a written contract is a lot easier to hang someone with. A lot of appraisers do not require a written contract for each job simply because that process can be very time consuming and no one has time to "waste" and most lenders would go elsewhere. Once again, 999 times out of a 1,000 it doesn't make a difference. However, if you "accept" an assignment and start the appraisal process, then decide to "decline" it, keep in mind there might be a commitment date for the mortgage you can be held liable for if and granted that is a BIG IF, it becomes a litigation case.

 

[airphoto]

Let's read that Useless PAP section literally .. it only requires that one 'complete the assignment.' I, for one, do not regard completing the assignment to include delivering the appraisal .. thus, there is a contingency that is legitimate .. payment 'in full.'

 

[Don Clark]

8)

Terrell has some good thought on this, and our obligations to a client. However, there are many reasons to decline an assignment, some and not the least of which have been stated already. I will decline an assignment for example when it does not meet the minimum property requirements(MPR's) required by FHA or VA and there is no reasonable way through repair, rehabilitation, or otherwise to do the things necessary to meet the MPR's. Example, I went out to do an FHA appraisal. Could not find the house on the street it supposedly was on. Looked on the other side of a new Interstate connector and there it was. It was now the only house on that portion of the street. To 2 sides were huge oil storage tanks, 1 side was commercial property, the other side was the interstate. Just to be sure I called FHA and they said no, we will not insure such a loan as it has lost it's residential characteristics. Told the lender I must decline. They had a hissy fit. Sorry, I must decline. In a VA case I went out to do a refinance on a "house". It was a very small old portion of what was to become a very large house. The kitchen had been removed, had a 1/2 bath, and 3 people were staying their while they were to build a new structure. No central or any kind of heat. No cooking stove. No bath facilities. Sorry says I, no can do, Not suitable for refinance, may be suitable for financing as per any plans & specs. Lender says "Oh my God". I will also cancel an assignment of I have a conflict with a property owner. Lot's of reasons to cancel or decline an assignment. BTW, clients have no reservations about cancelling an assignment regardless of the stage you are in. If I cancel, I don't charge. If they cancel I charge in proportion to how much has been done.

Don

 

[Mountain Man]

Read the engagement letter. Many I see spell out when an appraiser is to NOT complete the assignment, and call the client for instructions. If it is an odd ball that doesn't meet the lenders expectations, they may not want the loan.

 

[Anonymous]

I have declined assignments for several reasons. I have inspected properties which were supposed to be owner occupied but were in fact vacant. The houses were in poor condition and the "owner occupants had out of state phone numbers. They seemed fishy to me and I told the lender that I would not complete the assignment. I never got another order from that lender but I sleep well at night.

One time the owner of the property was so abusive that I told him that I didn't want to appraise his house and I walked out. I told the lender about the owner's bad behavior. I still do business with that lender.

We are professionals and we decide for whom we work.