The Restricted Report That Traveled

The Restricted option was appropriate only if the lender was truly the sole intended user. The Restricted Appraisal Report is permitted when the client is the only intended user; the report must state that the use is restricted to the client and warn that it may not contain sufficient information for another party. Those statements appear to be present.

• The appraiser's obligation is to the identified intended user. The appraiser cannot control forwarding, but must not mislead anyone who relies on the report.
• When the appraiser learns the borrower and a second lender are using it, the appraiser should communicate the restriction in writing and not accept the second lender as a user without a new engagement that identifies the new intended user and the new intended use.
• If the appraiser knew at the outset that the borrower or a second lender would rely, they should have been identified as intended users and an Appraisal Report (not a Restricted report) would have been the appropriate option.
• Confidentiality still applies: the appraiser should not discuss the client's business with the second lender beyond confirming the report's stated use restriction.

The appraiser should decline the request as framed. Reporting must not be misleading, and the client's convenience is not a reason to omit a conclusion that supports the value.

• Exposure time is a market-derived conclusion that explains the value opinion. Deleting it because it "confuses the borrower" would remove material information and could mislead.
• The reporting option controls how much detail is required, but the appraiser still decides whether the resulting report is credible and not misleading. The client cannot dictate content to the point of misrepresentation.
• Separately, the omission of the cost approach without explanation is a reporting defect: the report must state the rationale for excluding an approach. The two-sentence sales comparison summary should also be expanded or explained if it is not adequate for the intended user.
• If the client insists on a report the appraiser believes is misleading, the appraiser should decline to deliver it.

A certification is a statement of personal compliance, not a formality. Each person who signs must be able to support every statement in it.

• Under USPAP, the appraiser(s) who sign take responsibility for the work and must be competent for the assignment. The supervising appraiser remains responsible for the assistant's work.
• Whether an unlicensed assistant may sign at all is a state licensing question. If state law does not permit it, the signature must be removed.
• If the assistant did not perform the analysis or did not inspect, signing a certification that implies otherwise is a misrepresentation. The appraiser should correct the certification, disclose the assistant's actual role and the extent of the inspection, and ensure the signer can support each certification statement.
• The February 2 inspection and March 3 report date are not automatically a problem if the effective date of the value is clearly stated, but the report must not blur the two dates. The appraiser should make the effective date explicit.