Is requiring payment before report delivery a USPAP violation?

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An interesting discussion took place on the Yahoo!-based WinTOTAL User Group recently on the issue of requiring payment before report delivery.

As you are hopefully aware, your Professional or Enterprise XSite allows you to "force" your client to pay by credit card online (or otherwise) before your report can be downloaded. The question arose whether not delivering your work product until the agreed upon payment is made constitutes "holding an appraisal for ransom" in violation of USPAP.

The thoughtful discussion quickly came to the conclusion that the business decision of requiring payment before delivery is not covered by USPAP. (As always, you should make up your own mind how best to comply.) USPAP prohibits contingent values, and offering or receiving anything of value for a future appraisal assignment. But it is not so counterintuitive as to make you to deliver your work product to someone who hasn't paid for it.

To be safe, you may want to be sure to spell out payment terms in advance of, or as a condition of, assignment acceptance. One thing everyone can agree on about USPAP is that it's always a good idea to disclose, disclose, disclose.

The WinTOTAL User Group is a tremendous resource for Aurora and Athena users alike. It is not sponsored by a la mode and is run by some of our customers. It is a true "user group" where appraisers discuss ideas, problems, solutions and the best ways to maximize the utility of WinTOTAL, as well as broader issues affecting your business and your profession. Click here for the home page of the Group and consider joining for free.

About a la mode

Founded in 1985, a la mode develops desktop tools, mobile tools, web sites for real estate professionals, mortgage brokers, and appraisers. a la mode’s flagship product, WinTOTAL form-filling software for appraisers leads the residential appraisal industry. a la mode’s Mercury Network, a vendor management platform for lenders, provides the most experienced local appraisers in an HVCC-compliant, easy-to-use loan ordering and management application. a la mode’s mission-critical products are used by hundreds of thousands of appraisers, agents, inspectors, and lending professionals to complete the nation’s real estate transactions.  The company’s state-of-the-art offices are located in Salt Lake City, Oklahoma City, and Washington, DC.  To learn more, visit www.alamode.com.