1.15. Confidentiality. Appraisers’ valuations and supporting appraisal reports are confidential information and appraisers shall strictly abide by the following confidentiality of USPAP’s Ethics Rule: 

(1) An appraiser must protect the confidential nature of the appraiser-client relationship. 

(2) An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results. 

(3) An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than: a) the client and persons specifically authorized by the client; b) state appraiser enforcement agencies and such third parties as may be authorized by due process of law; and c) a duly authorized professional peer review committee.

Under item (1) above, appraisers must obtain written authorization from the client agency (or the Department of Justice if a case has been filed) before disclosure. The passage of time in and of itself does not extinguish either the appraiser’s responsibility for confidentiality or the appraiser/client relationship. The appraiser/client relationship is extinguished only upon written release from the client agency or upon the consummation of the government’s acquisition of the property appraised. Even though the appraiser/client relationship may terminate, the appraiser remains subject to the confidentiality provisions of USPAP. 

Appraisers have an extraordinary duty to maintain confidentiality when the acquisition of the property appraised may have to be accomplished by condemnation, and any appraisal report prepared for the purposes of government acquisition should be considered the subject of potential litigation until such time as the government has consummated its acquisition. 

If an appraiser receives a request or order, under items (2) or (3) above, to provide confidential information relating to an appraisal conducted for the government to a state appraiser enforcement agency or professional peer review committee, the appraiser must provide the government with written notice of the request or order prior to providing the confidential information to the state appraiser enforcement agency or professional peer review committee. If litigation is pending, the Department of Justice may elect to intercede if it determines such intercession would be in the best interest of the government. 

Appraisers must use extreme caution in choosing what information to cite in developing their opinions of value. While it is common practice for appraisers in non-litigation appraisals to report that they have relied upon confidential information (such as information learned in the conduct of other appraisals, or information provided to the appraiser by market participants on the condition that it not be disclosed) in addition to the supporting data reported, in developing their opinion of value such a reference in a litigation report may subject the information to discovery. Appraisers should not reference such information in litigation reports unless they are prepared to reveal the information, which occurs often by order of the court.