Appraisers Liable for Third Parties Data
There has been a lot of discussion and debate among appraisers around liability issues for data collected by third parties for hybrid and desktop appraisals. On April 22, 2022, the Maryland Commission of Real Estate Appraisers cautioned its appraisers that they are responsible for the data they rely upon.
Hello Maryland Appraiser:
It has come to the attention of the Maryland Commission of Real Estate Appraisers, Appraisal Management Companies, and Home Inspectors (“Commission”) that there may be confusion over where a supervising appraiser and trainee are supposed to sign an appraisal report and how a licensed or certified appraiser is to disclose assistance and third party contribution. A supervising appraiser is only to sign the “appraiser” section when they have completed an interior inspection of the property as per the certifications page 5 of 6 of the 1004URAR: “I performed a complete visual inspection of the interior and exterior areas of the subject property.” If the supervising appraiser did not inspect the interior, they must sign in the “supervisor” section. See attached sample. Trainees, as well as supervisors that provide samples of appraisals incorrectly signed, may be subject to disciplinary action by the Commission pursuant to MD Ann. Code, Bus. Occ. & Prof. §16-701. Additionally, it is recommended to that each supervising and trainee appraiser visit the state website and review how trainees’ assistance is disclosed, see attached documents.
The Commission is also aware of the new Fannie Mae 1004 Hybrid and 1004 Desktop appraisal forms. Both utilize property data reports on which an appraiser would need to rely as a source. An appraiser preparing a desktop appraisal should refer to USPAP Standard 1 and Advisory Opinion 2. Ultimately the appraiser is responsible and liable for data collected by third parties.
Maryland Commission of Real Estate Appraisers, Appraisal Management Companies and Home Inspectors
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