Question:

I am a manager for an Appraisal Management Company that performs commercial and residential appraisals in various parts of the country.  Our company acts as the agent for our clients who consist of numerous regional and national lenders.  In that capacity, we take in appraisal orders from our clients and order those appraisals from fee appraisers on our approved list of appraisers. We also perform STANDARD 3 compliant reviews on those appraisals. We forward the appraisal and appraisal review reports to our client. Are we required to keep a file of the appraisal reviews?

Response:

Yes.  The Record Keeping section of the ETHICS RULE requires, in part:

An appraiser must prepare a workfile for each appraisal, appraisal review, or appraisal consulting assignment. The workfile must include:

• the name of the client and identity, by name or type, of any other intended users;

• true copies of any written reports… (Bold added for emphasis)

Further, it is important to note that the requirement under USPAP is for the appraiser to retain a copy of:

the workfile for a period of at least five (5) years after preparation or at least two (2) years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever period expires last.

Therefore, it is incumbent upon the appraiser, not his or her employer, to ensure that a copy of the workfile is available for the time periods stipulated.