Who is the Appraiser's Client in a Mortgage Appraisal?

Explore what goes into the appraisal process by taking a look behind the curtain.

Understanding the relationships between the different professionals involved can help you navigate the appraisal process smoothly. In this piece, we'll explore the role of the appraiser and their relationship with their clients in the context of mortgage financing appraisals.

Who is the Appraiser's Client?

Appraisers, like lawyers and accountants, maintain confidential and fiduciary relationships with their clients. This relationship is governed by the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) of the Appraisal Institute of Canada (AIC).

According to these standards, any information within an appraisal report can only be disclosed with the written consent of the appraiser's client. This ensures a high level of trust and confidentiality in the interactions between appraisers and their clients.

The Role of the Lender

In many property transactions, especially when a mortgage is involved, the appraisal report is vital. This report is typically commissioned by the lending institution, making them the appraiser's client.

The homeowner, while they may be required to pay the appraisal fee, is not considered the appraiser's client. The appraiser must follow the instructions and guidelines provided by the lender to complete the report.

Sharing the Appraisal Report

The appraiser, under the AIC's professional practice standards, must keep their relationship with their client confidential. To share the report with any third party – including the individual who paid for the report – they require written authorization from the lender, their client.

Only the appraiser's client and the intended user identified in the report are authorized to receive a copy of and rely on the report. And, as the author of the report, the appraiser also needs to provide consent for its release.

The Homeowner and the Lender

The homeowner is the lender's client. As the homeowner, you might want to discuss with your lender their policies on whether you'll pay for the report and whether you'll receive a copy of it, regardless of the loan's approval status. This decision lies with your lender or mortgage broker, and the appraiser wouldn't be privy to this information.

By understanding the appraisal process and the relationships within it, you can ensure a smoother, more informed appraisal experience.