The Old Report and the New Client
Eighteen months ago you appraised a townhouse for Lender A at $312,000. The homeowner now calls asking for 'my appraisal' because Lender A denied a refinance; she says she paid for it. The next day Mortgage Broker B engages you to 'update the old appraisal for the same effective date' because the borrower needs $340,000 to consolidate debt. B asks you to change the client name, keep the old inspection and effective date, and omit the foundation crack you noted last time because it is 'cosmetic.' You still have the old workfile. The property has not been inspected since the original assignment.
1. Can you provide the prior report directly to the homeowner?
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The homeowner is not the client; Lender A is. Appraisal confidentiality runs to the client, and the borrower generally obtains the report through the lender. I should not release the report directly to the homeowner without Lender A's authorization or a legal requirement. I can explain that she may request a copy from Lender A. If I am uncertain about authorization, I should decline to provide it and document the request. This is not a situation for informal courtesy, because the report contains confidential assignment information and the client relationship controls.
2. Can you accept Broker B's assignment exactly as requested?
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No. Broker B's request is a new assignment with a new client, a new intended use, and a new scope of work. I cannot simply change the client name and reuse the old inspection and effective date. I would need a new engagement agreement, a current inspection, current market data, and a new effective date. The prior report can be used as background, but the new assignment must stand on its own. I also cannot accept an assignment conditioned on reaching $340,000, because that is a value contingency. I would explain the new scope and fee, and I would decline if B insists on the old effective date or a predetermined result.
3. What must you do about the foundation crack and the requested omission?
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I cannot omit a known adverse condition because the client calls it cosmetic. I would inspect the crack, document its location, width, and any displacement, and determine whether it is cosmetic or evidence of structural movement. If I lack expertise, I would recommend an engineer and use an extraordinary assumption or a subject-to condition as appropriate. The report must disclose the condition and analyze its effect on marketability and value. I would also retain the old workfile and the new workfile, including the client's request to omit the crack. If Broker B insists on omission, I would withdraw; accepting would mislead the intended user and violate the requirement to produce credible assignment results.