DOES A NEW ASSIGNMENT REQUIRE STARTING OVER?

By
Steven H. Berg

It is common for a lender to call and ask you to "reprint" or "readdress" a recently completed appraisal to them. Once a report has been prepared for a named client or clients, the appraiser cannot “readdress” or transfer the report to another party. Simply changing the client name on the report cannot change or replace the original appraiser-client relationship. Therefore, this action is misleading.

However, you can accept the request as a new assignment. In so doing, you will establish a new appraiser-client relationship and appraise the property for this new client. This does not mean that you are “starting from scratch.” You must decide the appropriate scope of work for the new assignment, just as you do for any assignment. This would include a decision as to whether or not it was necessary to perform another inspection. The scope of work for the new assignment can be different from the scope of work completed in the earlier assignment (i.e. last time, you had to inspect the property; this time, you do not).

As with any assignment, you might be able to use information and analysis developed for a previous assignment. It may take you only twenty minutes to complete the new assignment, but it is still a new assignment. Appraisers are often selected for subsequent assignments specifically because of experience and demonstrated competency in a prior assignment. One must be mindful of obligations relating to the use of confidential information. The Confidentiality section of the ETHICS RULE states:

An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client…

Finally, there has been some misunderstanding about the fees you have to charge for these additional assignments. Some appraisers have been heard to tell clients, “I have to charge you for a whole new appraisal.” The Uniform Standards of Professional Appraisal Practice do not require appraisers to charge for their services. You are at liberty to charge whatever you want for your services. At all times, the decision to charge a fee, and what that fee will be, is a business decision; USPAP does not care if you charge full price or if you provide the service at no charge. Obviously, anywhere in between that range is also acceptable. We should also mention that nothing says that you must accept the assignment at all. In some circumstances, it may be a prudent business decision for you to decline the assignment altogether.

Additional information on this topic can be found in Advisory Opinion 26, Readdressing (Transferring) a Report to Another Party and in Advisory Opinion 27, Appraising the Same Property for a New Client.