Clandestine - Drug Property

[IASNY]

I accepted an order with the SOW for a basic single family REO property in a rural area within my county. I specialize in rural properties. Upon inspection, I vaguely remembered a large drug bust in which 13 people were arrested for various drug production and dealings. Sure enough, the property was owned by the head of this group. My inspection revealed the house, lg barn with finished upper room, 2 fair sized sheds with cooker stoves, fenced areas, and there were other tell-tale earmarks for drug production. The property became something I wasn't prepared to appraise.

I contacted the client and voiced my concerns for remediation, etc., and specifically told them I was not qualified to render an opinion of value for a clandestine property such as this, as the property has definite 'druggie place' reputation throughout the area (which is why I remembered it). I asked to be removed from the assignment and requested a trip fee, as it was their fault for not disclosing this info to me in the first place.

After several weeks, the client has emailed me requesting me to continue with the appraisal under the extraordinary assumption that the property has had adequate remediation, and there are no issues for health concerns present. While that sounds fine and good, it still leaves me with the reputation of the property as a drug production property, whether it was marijuana or meth production. The STIGMA is still an issue that I don't know how to address.

My question - and I really appreciate input here, should I continue with this assignment? I don't feel qualified, nor do I have the data necessary to determine fair market value of a such a property. They are convinced I should go forward as a regular single family residence (it's really a camp with no good water or sewer), and the whole scope of work has changed, yet they are adamant that I accepted the assignment so I need to finish it. We have been going back and forth since the initial July inspection.

What would you do? What are my liabilities? Would YOU go forward? THANK YOU!!!

 

[Mr Rex]

I accepted an order with the SOW for a basic single family REO property in a rural area within my county. I specialize in rural properties. Upon inspection, I vaguely remembered a large drug bust in which 13 people were arrested for various drug production were arrested. Sure enough, the property was owned by the head of this group. After further inspection, I found 2 fair sized sheds with cooker stoves, fenced areas, and there were other tell-tale earmarks for drug production. The property became something I wasn't prepared to appraise.

I contacted the client and voiced my concerns for remediation, etc., and specifically told them I was not qualified to render an opinion of value for a clandestine property such as this, as the property has definite 'druggie place' reputation throughout the area (which is why I remembered it).

After several weeks, the client has emailed me requesting me to continue with the appraisal under the extraordinary assumption that the property has had adequate remediation, and there are no issues for health concerns present. While that sounds fine and good, it still leaves me with the reputation of the property as a drug production property, whether it was marijuana or meth production. The STIGMA is still an issue that I don't know how to address.

My question - and I really appreciate input here, should I continue with this assignment? I don't feel qualified, nor do I have the data necessary to determine fair market value of a such a property. They are convinced I should go forward as a regular single family residence (it's really a camp with no good water or sewer), and the whole scope of work has changed, yet the are adamant that I accepted the assignment so I need to finish it. We have been going back and forth since the initial July inspection.


What would you do? What are my liabilities? Would YOU go forward? THANK YOU!!!

It seems you answered your own question 3 times. To do so would be a USPAP violation, unless you take steps to become competent.

 

[IASNY]

It seems you answered your own question 3 times. To do so would be a USPAP violation, unless you take steps to become competent.

The only thing that makes me hesitate is them asking me to ignore it and ASSUME it is a normal property, which I AM qualified to do. But then, that is not being honest in a valuation. Or - would it be OK to do and address the concerns in the report? IF the property were normal ... blah, blah...but these facts are present.

 

[Mr Rex]

They are asking you to ignore a material fact. If I recall, that is considered misleading.

 

[miktay]

"should I continue with this assignment?"

No.
I've been in this situation many times. I have regretted taking many different ones over the years.
I have NEVER regretted turning any down. In fact, I usually slept even better that night.
Good luck to you.

 

[Meandering]

After several weeks, the client has emailed me requesting me to continue with the appraisal under the extraordinary assumption that the property has had adequate remediation, and there are no issues for health concerns present.

This would be an HC - you already know no adequate remediation has taken place.
The EA would be for the cost and extent of remediation, and

This would not be a form report as you would have to address stigma, buyer acceptance, yada, yada and need additional data and studies and narrative.

You can not be mandated to complete work.

I'd say this calls for a five figure fee, which I'm sure REO jobs don't want to pay.

For $15k and 4 weeks, you can gain the competency through research and interviews.

.

 

[Michigan CG]

The assignment certainly can be completed but I would consider the type of client you have. Is it an AMC? If so, walk away, they don't deserve any special services. If it is a good local lending client then I would consider it.

 

[J Grant]

No, turn it down for numerous reasons which you provided yourself.

 

[hastalavista]

This isn't so much a "Can I do this" situation but more of a "Am I comfortable doing this?" situation.

I'll be glad when the USPAP gets rid of the labels of HC and Extraordinary and moves toward special assumptions that must be disclosed. Having said that, and under the current protocol....
While I think such an assignment can be completed using an Extraordinary Assumption, the necessary disclaimer to identify all the issues, etc., etc., would be significant. Easier to use an HC. However, if this is for any type of regulated banking transaction, the HC will not work.

But more important than that (IMO) is your comfort level. When I'm uncomfortable about a situation, I simply decline it. I've never been sorry when I've done so, even when I've changed my mind later and thought maybe I could have completed the assignment.
And if you are uncomfortable, no need to get into a detailed discussion with the client as to the why's. Simply let them know that you have concerns that another appraiser may not have, and for that reason, are passing on the assignment.

Good luck!

 

[J Grant]

"OP- and specifically told them I was not qualified to render an opinion of value for a clandestine property such as this, as the property has definite 'druggie place' reputation throughout the area (which is why I remembered it). I asked to be removed from the assignment and requested a trip fee, as it was their fault for not disclosing this info to me in the first place."

1) you already told them you are not qualified, and now you are stuck with that. How can you reverse course and now claim to be qualified? And if the results go south, do they have a record of you telling them you are not qualified..

2), IMO, it was an error to charge a trip fee for an assignment you voluntarily pulled out of. The client may not have known about the drug problem, or even if they had, assumed you could handle it. They paid or agreed to pay you the trip fee, and now in return they feel you are still associated with this assignment, re pressuring you to take it..

When I decide to voluntarily resign, I dont' charge for a trip fee, it happens rarely enough, plus imo if a problem associated with the assignment was serious enough for me to pull out, I want a clean break from taht assignment.