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Reliance Letter Minefield an appraiser real-world problem… Solved

Save this letter in your file; it will help protect you from liability and enhance your professional image.

While not typical, there are enough requests for “reliance letters” that they are not uncommon.

A mortgage broker may receive a copy of the appraisal report and want to submit it to a “second mortgage” lender, who is not the original client or an intended user.

The mortgage broker may ask the appraiser to complete a “reliance letter” and re-address the report to the new lender. At this juncture typically there is no discussion of compensation.

The audacity of this mortgage broker is probably your first thought! In their industry, it’s not uncommon for them to ask an environmental consultant for a reliance letter.

Let’s clarify what a reliance letter is. A reliance letter is a letter from one party to another party allowing them to rely on the contents of a report. Reliance letters can be offered by consultants (usually an environmental consultant) in place of a formal collateral warranty to the consultant’s appointment.

With that in mind, realizing the mortgage broker’s lack of USPAP knowledge, you can understand why they might consider asking the appraiser for a reliance letter.

So, what’s the answer? Can an appraiser just re-address the appraisal report? Can the appraiser re-address the appraisal report if they are offered remuneration?

Advisory Opinion 26 provides the following clear and unambiguous answer to these questions.

The answer to the question posed above is… No. Once a report has been prepared for a named client(s) and any other identified intended users and for an identified intended use, the appraiser cannot “readdress” (transfer) the report to another party.

USPAP defines Client as: the party or parties (i.e., individual, group, or entity) who engage an appraiser by employment or contract in a specific assignment, whether directly or through an agent. (USPSP Publication)

Avoid the reliance letter minefield. The next time you are requested to readdress an appraisal, just send them a copy of this Food for Thought. And just say, NO!!

Good luck and do good work,


For more information and on this topic read the following:


Relevant USPAP & Advisory References

• The Confidentiality and Conduct sections of the ETHICS RULE

• Standards Rules such as 1-2(a) and 1-2(b); 7-2(a) and 7-2(b); and 9-2(a) and 9-2(b), which require an appraiser to identify the client, intended users, and intended use

• Standards Rules such as 2-1(a), 8-1(a), 10-1(a), which require an appraiser to clearly and accurately set forth the appraisal in a manner that is not misleading

• SCOPE OF WORK RULE, which requires an appraiser to ascertain whether other laws or regulations apply to the assignment in addition to USPAP

• Advisory Opinion 25, which covers clarification of the client in a federally related transaction• Advisory Opinion 27, which addresses appraising the same property for a new client

• Advisory Opinion 36, Identification and Disclosure of Client, Intended Use, and Intended Users 

(USPAP Publication)