Clients and Confidentiality
An accredited appraiser is governed by the Canadian Uniform Standards of Professional Appraisal Practice (The Standards.) Those Standards define the Appraiser-Client relationship and the Appraiser’s responsibilities to the Client. Items in italics are taken from The Standards. These standards are intended for the protection of both the Client and the Appraiser.
The Surprise - You paid for it but you don’t own it.
Surprisingly enough, even if you are the person paying for the appraisal, you might not be the one who owns it. Kind of like buying your grad a Mustang convertible – never get to use it – never even get to see it.
The Standards state the following at line 7.2.1:
"The client is generally the party or parties ordering the appraisal report. It does not matter who pays for the work."
Gee Mom – Not Fair to Me!
How can this be, and what are the implications to you?
Well, if you approach a bank and discuss a mortgage on a house you want to buy (or you're arranging refinancing) the bank may order the appraisal and charge you a part or all of the cost. This fee could be paid up front, be a deduction from your account, or be rolled into the financing arrangements in some way. In this case the following circumstances apply:
• the appraisal is the property of the bank
• the bank is not obligated to show you the appraisal or discuss the contents of it - though some will
• if the bank is specifically named as the client, the bank can not hand the appraisal over to you for your own use (or the use of another lender) without the written permission of the Appraiser.
• the appraisal is also owned by the Appraiser who, with the written permission of the client, may give permission to allow someone else to use the appraisal as a new or additional client. This is done in a Transmittal Letter.
My Lips are Sealed
Furthermore, The Standards state the following:
5.10 Disclosure
5.10.1 Members pledge to uphold the confidential nature of the appraiser/client relationship.
5.10.2 A member must not disclose the analyses, opinions, or conclusions in an assignment to anyone other than:
5.10.2.i. the client and those persons specifically authorized by the client to receive such information;
• that means that the Appraiser can not discuss the contents of the appraisal with anyone: you, the homeowner, the person who paid for the appraisal, the neighbours, a Realtor, a lawyer, a spouse – anyone, without the written consent of the client (the bank if they ordered it, your purchaser if they ordered it, your spouse if s/he ordered it, etc.)
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