USPAP in Action: Why a New Client Means a New Assignment
Q. I completed an appraisal of a small office building in town for a local lender. The borrower/property owner and his family are well known and well respected in town. About a week after I submitted the report, a loan officer from Bank A calls and says the borrower is doing some other big deal with his bank so he wants me to “transfer” this report to Bank B. I tried to explain that I couldn’t just put the new Bank’s name on the report I prepared for Bank A and the loan officer got angry with me and said something about the report being “only a week old”.
The next call I got was from the bank manager of Bank A asking me what the problem was and saying he was prepared to have his legal department prepare whatever documents I needed. This guy wouldn’t let me get a word in, but finally I said that I could not just put the name of Bank B on the report I did for Bank A...I needed to prepare a new report for Bank B. I didn’t finish my sentence before he really went off on me saying that was “ridiculous” and it was a “money grab” and I don’t even know what else he said before he hung up.
I’m concerned about maintaining good relationships in a small town and would prefer not to create unnecessary friction. My thought is to send a brief email explaining my ethical obligations under USPAP, possibly referencing Advisory Opinions 26 and 27. I would also offer that, if they provide written authorization, I can prepare a new appraisal addressed to Bank B at no additional charge.
How does that sound? Anything else that you think I should add to my email?
A: It’s unfortunate that the representatives at Bank A reacted before fully hearing your explanation, but you handled the situation appropriately by staying professional and composed. I agree that sending a clear, prompt email is the right next step to prevent further misunderstanding.
In your message, you may also want to confirm the exact entity name and contact information for Bank B to ensure the new report is addressed correctly. Additionally, it would be wise to clarify that once the new report is completed and delivered to Bank B, the original report prepared for Bank A should either be returned to you or formally destroyed, and not relied upon for any future purpose.