In New York commercial real estate, confusion about who the “client” is can cause real problems: delayed closings, unusable reports, confidentiality disputes, and appraisals that a lender or court simply won’t accept. Paying the invoice doesn’t automatically make someone the client—and neither does being the property owner.
At Lloyd Real Estate Services, our New York Commercial Real Estate Appraisers recommend clarifying “client” status at the very beginning—before inspection, before documents are exchanged, and definitely before the report is delivered.
The short definition: what “client” means in an appraisal
In professional appraisal practice (including work performed under USPAP standards), the client is generally the party who engages the appraiser—the person or entity that retains the appraiser and establishes the assignment through an engagement letter or written agreement.
Key point: The client is not automatically the person who pays the fee, owns the property, or benefits from the value conclusion.That’s why our New York Commercial Real Estate Appraisers recommend treating “Who is the client?” as a scope-of-work decision, not a casual assumption.
Client vs. intended users: the distinction that matters in New York
Many New York transactions involve multiple stakeholders: owners, lenders, attorneys, equity partners, accountants, and sometimes courts or agencies. Appraisal reports, however, are not “for everyone.”
- Client: the party who engaged the appraiser.
- Intended user(s): the client and any other party (if any) the appraiser identifies—by name or type—as permitted to rely on the report for the stated intended use.
Why it matters: The appraiser’s liability, confidentiality obligations, and report reliance are tied to the client and intended users, not to everyone who requests a copy.
This is why our New York Commercial Real Estate Appraisers recommend you confirm in writing whether your attorney, lender, partner, or investor is an intended user—especially if they need to rely on the value.
Scenario 1: A bank-ordered appraisal for financing (most common)
If a bank or lender is requiring an appraisal for a refinance or acquisition loan, the bank is usually the client, because the bank is the party engaging the appraiser for underwriting.Even if:
- you (the borrower/owner) pay the appraisal invoice,
- you provide documents (leases, rent roll, financials), and
- you receive a copy,
…the lender is still typically the client.What this means for you as the owner:
- You may be a borrower or property contact, but not the client.
- The report’s intended use is lender underwriting.
- The lender controls distribution in many cases (subject to law and policy).
- The appraiser’s communications and delivery protocols often run through lender channels.
Our New York Commercial Real Estate Appraisers recommend that owners ask one simple question before ordering: “Will the lender be the named client on the engagement letter?” If yes, you should expect lender-specific requirements and review processes.
Scenario 2: An owner-ordered appraisal (you are the client)
If you hire Lloyd Real Estate Services directly for internal decision-making—pricing, strategy, buy/sell analysis, partnership planning, or pre-listing guidance—you (the owner) are generally the client, because you engaged the appraiser.This structure is often ideal when you need:
- a valuation to support negotiations,
- clarity on highest and best use,
- a baseline for capital planning,
- or a defensible opinion for internal reporting.
Key point: If you later want to hand that report to a bank, the bank may not be able to rely on it unless the assignment was structured for that purpose from the start. Lenders often require they be the client (or at least a specifically named intended user) and may require their own engagement process.
That’s why our New York Commercial Real Estate Appraisers recommend stating the intended use(s) up front: internal planning only, financing, litigation, tax, estate, etc.
Scenario 3: An attorney-ordered appraisal (your attorney is the client)
If your attorney retains the appraiser for a matter—litigation support, arbitration, eminent domain, divorce, partnership disputes, estate planning strategy, or other legal contexts—the attorney (or the law firm) is often the client.This is common when:
- attorney work product considerations are important,
- the appraisal is part of a broader legal strategy,
- confidentiality and controlled distribution are critical,
- the valuation date and standards must align with legal requirements.
Important nuance: An appraisal used in litigation may require additional steps (deposition readiness, expert testimony, stricter documentation). Our New York Commercial Real Estate Appraisers recommend confirming whether the assignment is appraisal-only or includes expert support and whether court rules or disclosure obligations will apply.
Scenario 4: A third-party platform, AMCs, and institutional processes
In New York commercial lending, some institutions order appraisals through internal procurement or third-party ordering systems. In those cases, the ordering institution is still typically the client, even if the process feels “outsourced.”Our New York Commercial Real Estate Appraisers recommend that you treat these as lender-client assignments and avoid side agreements that contradict lender instructions.
How to tell who the client is (fast): check the engagement letter
If you’re unsure, the engagement letter should make it clear. Look for:
- Client name (exact legal entity)
- Intended use (financing, acquisition, legal, tax, internal, etc.)
- Intended users (named parties who may rely)
- Intended property interest (fee simple, leased fee, leasehold)
- Effective date and reporting requirements
- Distribution language and reliance limitations
Our New York Commercial Real Estate Appraisers recommend requesting the engagement letter (or order confirmation) before you assume your attorney or lender can rely on the report.
Common misconceptions (and what’s actually true)
- “I paid, so I’m the client.”
Not necessarily. Payment source and client identity can be different. - “My attorney reviewed it, so the attorney is the client.”
Review isn’t engagement. The client is whoever retained the appraiser. - “The owner can share it with anyone.”
If the owner isn’t the client, sharing may violate lender policies and may not create reliance rights for third parties. - “If I hand it to the bank, they can use it.”
Not always. Banks frequently require specific client/intended user language and engagement controls.
Because these issues can derail real deals, our New York Commercial Real Estate Appraisers recommend aligning the appraisal structure with your end user before the work begins.
Practical guidance: who should be the client in your situation?
Use this quick rule of thumb:
- Financing appraisal (purchase/refi): usually the bank is the client.
- Deal strategy / internal pricing: usually you (the owner) are the client.
- Legal dispute / expert context: usually your attorney/law firm is the client.
- Multi-party scenarios (partners, investors): define one client and list others as intended users only if appropriate.
Key point: The “right” client is the one whose reliance needs and compliance requirements drive the assignment.
Work with Lloyd Real Estate Services
If you’re ordering a New York appraisal and want the report to be usable for the right purpose—lending, legal, tax, or internal planning—start by getting the client question right.At Lloyd Real Estate Services, our New York Commercial Real Estate Appraisers recommend a brief upfront scoping call to confirm: who the client will be, who the intended users are, and how the report will be relied upon. That single step helps prevent re-orders, re-writes, and last-minute surprises—and keeps your valuation aligned with how New York real estate decisions actually get made.