USPAP - September Q & A's

The Appraisal Foundation recently released the September monthly Questions and Answers.  In this months Q&A's we find two questions dealing with the new real estate related Home Value Code of Conduct which is for real estate mortgages and should not impact personal property appraisers.  There are two other questions to the Appraisal Foundation which do have relevance for the personal property appraiser.  One is on how to dispose of records after the retention period and the other is on confidentiality and release of client information under the due process of the law.  The two pertinent Q&A's are below.

Disposal of Workfiles

Question:
I am aware of and comply with the workfile retention requirements in the Record Keeping section of the ETHICS RULE in USPAP. However, once the required retention period has passed, does USPAP dictate a method I must employ to dispose of the workfiles?

Response:
No, USPAP does not dictate a particular method for disposal of workfiles. However, because there are no provisions in USPAP for termination of the appraiser-client relationship and the appraiser’s respective confidentiality obligations, appraisers must ensure that they do not violate the Confidentiality section of the ETHICS RULE even when disposing of workfiles.

This means that appraisers must ensure that whatever method they employ to dispose of workfiles does not allow for the communication of assignment results or confidential information (both, as defined in USPAP) in the disposal process.

Due Process of Law

Question:
I am a personal property appraiser that specializes in the appraisal of coins and currency. I am required, by federal law, to report United States counterfeit coins and currency to the U.S. Secret Service. In reporting these counterfeit coins and currency, I am also required under federal law to provide them with the name and contact information of my client. Would disclosing my client’s name under these circumstances be a jurisdictional exception under USPAP?

Response:
No, this issue does not constitute a jurisdictional exception. The Confidentiality section of the ETHICS RULE in USPAP prohibits an appraiser from disclosing confidential information (as defined in USPAP). However, it is not a violation of USPAP to disclose the name of the appraiser’s client. This would only hold true if the client’s name qualified as confidential information (as defined in USPAP), or if the appraiser contractually agreed with the client not to disclose the client’s name.

Even if the appraiser agreed not to disclose the name of the client, the Confidentiality section of the ETHICS RULE permits the appraiser to disclose the client’s name to “such third parties as may be authorized by due process of law.” If federal law mandates an appraiser to communicate confidential information, the appraiser must comply with that law.

To read the full September Question and Answers from the Appraisal Foundation, click HERE.