One of the most common questions we hear from borrowers and even lenders is – the borrower switched lenders and we need the appraiser to change the lender name. Can the appraiser just switch it without having to do a new assignment?
The answer is no. If the appraiser changes the name of the lender/client, the appraiser is no longer following the Scope of Work Rule as required by the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP requires a new assignment not only when the lender/client changes, but also when any other intended users change. If the appraiser simply switches the lender/client name or add/removes another intended user, they are in violation of USPAP and putting their appraisal license at risk. To comply with USPAP, there must be a new assignment.
One reason is that even if the name of the lender/client was changed and the readdressed report was submitted to the new lender/client, it does not change the first appraiser-client relationship. Once that initial relationship is established and the appraisal is completed, it cannot be changed. To be named as the lender/client in a report, one must have been identified as such at the onset of the assignment. This would also breach the confidentiality of the appraiser’s relationship with the original client, which is another violation of USPAP. It is inappropriate for clients to request this and unethical for appraisers to comply with.
Borrowers sometimes ask: “I’m the one that paid for this appraisal – can’t you just give me a copy of it?” Again, this request is out of our hands. It is a USPAP issue. USPAP mandates that the appraiser must not disclose confidential information or assignment results to anyone other than the client or those specifically authorized by the client. Without consent from the client, neither the appraiser nor the AMC can provide the report to the borrower or discuss it with them.
To a borrower, creating a new assignment might seem like a drastic measure, especially when the new report could quite possibly look remarkably similar. However, all the assignment parameters for the new client could be completely different from those of the first client and the appraiser must now meet the needs of a new client, given their intended use.
Another issue to keep in mind is that when an appraiser provides a report to a client, they are extending their liability to that client. Every time an addition is made to the list of intended users, their liability grows. The appraiser-client relationship involves this factor, which solidifies the reasoning behind why that relationship cannot be changed once established.