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Appraiser fined $10,000, has license downgraded

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Colorado Guy

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From the Denver Post
http://www.denverpost.com/search/ci_7655583?source=email

Appraiser fined $10,000, has license downgraded
By Margaret Jackson
The Denver Post
Article Last Updated: 12/06/2007 11:51:57 PM MST

A Loveland appraiser accused of inflating the value of a conservation easement near Walsenburg has been fined $10,000, and her license has been stripped to the lowest level.

Over the next three years, Julie O'Gorman must pay the state's Division of Real Estate $10,000, according to a settlement reached Thursday. She faces an additional $15,000 fine if she violates the stipulated agreement.

Also, O'Gorman's license has been reduced from certified general appraiser, the highest level, to licensed appraiser. She is not permitted to appraise land for conservation easements until January 2011.
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Vernon Martin

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Court documents show that O'Gorman said in a letter that she was performing the appraisal based on "preliminary plans and specifications supplied by Rodney Atherton," whose plans included annexation into the city of Walsenburg and a zoning change from agricultural to urbanizing residential district."

[/email]

Whether her overvaluation was willful or accidental, one lesson to be learned by appraisers is to verify the property owner's representations with a simple phone call to the town government; otherwise, you may unwittingly become a party to fraud. I wish I had a dollar for every time a developer told me "the town loves my project and can't wait to annex me."

VM
 

Stephen J. Vertin MAI

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O'Gorman's conclusion relied on the property being annexed into the southern Colorado town, but she didn't include any discussions with planners to suggest that was possible or any references to the town's master plan showing its desire to annex the property, court records state.
It sounds like she made an extraordinary assumption based on "preliminary plans and specifications supplied by Rodney Atherton," whose plans included annexation into the city of Walsenburg and a zoning change from agricultural to urbanizing residential district.
Atherton, a Denver lawyer, said he worked on behalf of the developers to give the development design to O'Gorman. He said he could not recall the name of his client and that if he did, he would not be able to reveal it for confidentiality reasons.
There has to be more to this. This is not a positive.
 

Terrel L. Shields

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If I recall her case, she has a mill with several employees and 'cranked 'em out' for some time. I think she was lucky to have kept her license at all. I do wonder if someone ever appealed such a ruling if, in fact, once you have met the qualifications of a CG how you could be forced to drop to License level except by an agreement letter.

Conservation easements are, without a doubt, the most fraudulent of schemes contrived by well-meaning conservationists and politicos. It purports to save the environment but has been perverted into a value enhancing, not value decreasing system of developing selectively.
 

Stephen J. Vertin MAI

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Terrel:

Forget all the "she did this and that prior" for a second. Judge what is being said on its merits. Would you not agree that from reading the article it appears she had an extraordinary assumption based on plans and specs provided by an attorney? So lets read what USPAP says:

(f) Identify any extraordinary assumptions necessary in the assignment;

Comment: An extraordinary assumption may be used in an assignment only if:
§ it is required to properly develop credible opinions and conclusions;
§ the appraiser has a reasonable basis for the extraordinary assumption;
§ use of the extraordinary assumption results in a credible analysis; and
§ the appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions.


I believe it would have to boil down “to the appraiser has a reasonable basis for the extraordinary assumption” simply based on what is reported. So my question is why isn’t a written plan by an attorney reasonable? It does not say the appraiser has to have rock solid proof for the basis of an extraordinary assumption and such proof must come directly from Governmental sources. To me, that becomes more then reasonable and in fact is no longer even an extraordinary assumption. Further, we use information provided by others all the time. What about environmental studies? Is it now recommended appraisers check all issues with EPA and other regulatory bodies? These are just some thoughts for open dialogue.
 

CCAAMO

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If she had been a California appraiser, they would only have fined her and required some additional couse work.
 

Abester

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I know I've worked in a few cities where the Board(s) will not tell you anything about what they might do other than they will consider it if/when it comes up for a hearing. I have even had some that won't give a general direction of whether they might sometimes maybe lean one way or the other...
 

Terrel L. Shields

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Easement valuations have been problematic for some time. I have to conclude that the problem is that division of a property with an easement enhances the value, not reduces it therefore there would be no tax break available. Since Colorado law and U. S. Laws on conservation easements allow up to 50% deduction and the temption is to max that deduction. I have no doubt her deduction was maxed out.
 

Stephen J. Vertin MAI

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Illinois
Terrel:

That may very well be but the focus of the story is not in that light.
 

Couch Potato

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I believe it would have to boil down “to the appraiser has a reasonable basis for the extraordinary assumption” simply based on what is reported. So my question is why isn’t a written plan by an attorney reasonable? It does not say the appraiser has to have rock solid proof for the basis of an extraordinary assumption and such proof must come directly from Governmental sources. To me, that becomes more then reasonable and in fact is no longer even an extraordinary assumption. Further, we use information provided by others all the time. What about environmental studies? Is it now recommended appraisers check all issues with EPA and other regulatory bodies? These are just some thoughts for open dialogue.
As I recall from earlier reports, the appraiser not only had the attorney's plan, but a letter from the city saying the annexation would never happen. This is what made the assumption unreasonable.
 
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