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Destroy Old Files At Your Own Risk

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Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
USPAP Q&A issue April 2003

"Question # 3:
My state appraisal board is asking me to send a copy of the workfile for an appriasal I performed eight years ago. Since no testimony was given in the assignment, I was only required to maintain access to the workfile for five years. Given that this time period has expired, can the state board still take action in this case?

Response:
Yes. The time frames referenced in the Record Keeping section of the Ethics Rule are only minimums. Nothing in USPAP would prevent an enforcement proceeding from taking place after the applicable time period had expired."

I hope the forum will please comment on this.

There are several members of review boards and USPAP instructors on the forum who can provide some insight.

I have been reluctant to destroy old files and now I know why.

I am thinking scanning those old files and storing them in something like Alamode's Vault would satisfy USPAP. I would like to know what the experts think about that. They could also be stored on CS's.

For those on review boards "What would the boards attitude be if it took awhile to retrieve the file or the file might have been lost?" Paper files take up a lot of room.

Thank you in advance for all the knowedgeable answers I will get.

Please remember all those people who are being honored this Memorial Day.

Roger R. Patzold
[email protected]
Cleveland, Texas
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
This is the biggest advantage of the new tech age of appraisals. The ability to store and back-up files in a digital workfile is a great advantage in my humble opinion. CD-r backups are great - I can easily store a full years of files on one disk since I am working on my own. Even if I were to expand, I have a DVD-R drive, which is about the equivalent of 7 CD-Rs on one DVD-R.......

I will admit, I do print out a paper hard copy of every file I work on. I don't know about the rest of you, but for me to review a file on a computer screen sucks, I need that paper to scribble on when I make my corrections; Old habits die hard I guess.

In my house, I have a massive crawlspace, not big enough to spend a lot of time in, but PLENTY of time to slide in airtight storage boxes, which house my work files for the past years that I don't need quick access to. I will continue to do such until I can find a digital media that I trust 100% - no floppies, ZIP disks, CD-R, DVD-R, or backup hard drives will make me feel quite as comfortable as being able to hold the appraisal in my hands.
 

Tejus

Member
Joined
Nov 1, 2002
Professional Status
Certified Residential Appraiser
State
Texas
One other thing to keep in mind when storing your work file digitally.
In addition to the work file, you need the support software necessary to view the contents of the work file. A potential problem is a sw package which stores data in a proprietary format which is not usable by other packages.

For example, if you are using appraisal sw package ABC, then switch to appraisal package XYZ, if your earlier appraisal work file(s) are still in ABC format then you need to ensure you have a way to view them. This may require access to ABC or some conversion utility.

Due to the min 5 yr retention period, this can be a potential issue with new operating systems, sw packages, etc.

cheers.
 

jtrotta

Senior Member
Joined
Jan 16, 2002
:question: why was the State seeking to review an 8 year old workfile


Over the past few years have seen some sleezy attempts to discredit appraisals/appraiser's; one of my pet pevs - is the use by an outsider/ Lender Reviewer using 2- 3 year old sales data to discredit value. If we're required to use data within a 6-9 month range, why would a Reviewer seek data beyond a 12 month time frame :question:

just a side note; this type of data on several occassions killed the deals.


:ph34r:
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
The five year rule in USPAP is a minimum as far as our professional standards, but any state board is free to adopt its own rule to require longer record retention periods. I suppose a client could, too, if they made such a requirement a condition of the assignment engagement (now there's an interesting question). Let's say for the sake of argument that a state has a 10-year rule; I'm sure that rule would probably be enforceable in that state. If the state doesn't have a rule or their rule is limited to the 5 years (+2 for cases where testimony was rendered), then they really can't discipline an appraiser for not following an unwritten rule or reg.

Even so, if an appraiser still has a record for whatever reason and the state board has asked for it, the appraiser might into a problem if they decline to provide it. Or not. I'm sure some people would argue that there's a difference between an appraiser having old records and the state board knowing or suspecting they have those records.

I hope folks will look to see if there even is a specific rule in their state that requires record retention longer than the 5-year minimum in the USPAP. In my state (California), the 5 years is the minimum, so I shred the reports as soon as practical after that. Not that it's been a problem so far, but I see no reason to provide opportunities for some attorney's exploitation. If they want to cause problems, then let the entire burden of proof be on them. They better bring a videotape, too.


George Hatch
 

G-man

Member
Joined
Feb 4, 2002
Professional Status
Licensed Appraiser
State
Ohio
"In my house, I have a massive crawlspace, not big enough to spend a lot of time in, but PLENTY of time to slide in airtight storage boxes, which house my work files for the past years that I don't need quick access to. I will continue to do such until I can find a digital media that I trust 100% - no floppies, ZIP disks, CD-R, DVD-R, or backup hard drives will make me feel quite as comfortable as being able to hold the appraisal in my hands"

Three little words to live by, Off Site Storage. If your house goes up in a ball of flame, :eek:nfire: there goes all of your old work files. This happened to my brothers company a few years back. They lost a months worth of files, but everything else is duplicated and stored somewhere else. With the ability to store files on discs, this should not be that expensive or time consuming.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I know a guy whose father was in the Real Est. biz in the 20's and he has all the old files from there to the present date...can do a retrospective appraisal as a snap. :) After being sued over a 6 year old appraisal, :angry: I concluded it is not worth the few Retro appraisals i would do to keep those records. :huh: if you do, what is in your "workfile"???? :huh: Database from the MLS? :eek: Ditto for the Assessor records? :huh: References to old files with info..what a can of worms. Your "workfile' should include the old cost books, etc. whatever. The plaintiff has applied for access to all my computers, :( computer programs, files, electronic and written, as well as any text book I used as a guide or any guidelines provided by my lender, even the make model, memory, operating system, etc. of every comuter I have owned since 1992 :( and where are they now...OK? How much time do you spend scanning tax cards, deeds, deed lists, etc. etc. Hours per week?? Just scanning the report might not be enough to satisfy the "workfile" :blink: requirement, which is a crock of crap to being with. Much of my workfile is in my head. :rolleyes: When I ask a builder what it cost to build a certain type building, etc. do you think he writes it down for me??? :rolleyes:

ter
 

John SRA

Junior Member
Joined
Jan 19, 2002
Why would a state board look at a report that was eight years old? There might be many reasons. Perhaps the home just went into foreclosure, and as a result the appraisal report was reviewed. In fact, I just reviewed a report that was six years old for this very reason.

In my review I found that the sales prices reported in the adjustment grid were not consistent with the actual sale prices recorded in the public record. They were all inflated by exactly $50,000.

This appears to be a rather blatant case of fraud. Should an investigation be avoided just because of the time that has elapsed?

JC
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
John,

I wouldn't care how old that report was, it's very obviously blatant fraud and that appraiser should go down. I doesn't matter whether the appraiser has the workfile for that since it couldn't possibly help. I don't want to use a brand new sale in MLS unless someone hands me a signed closing statement, otherwise, I will put in a statement that the sale was not verifiable as correct at this time and that MLS data is sometimes found to be incorrect. I do knock on doors and talk to the new owners too.

Anyone taking MLS data as fact and using just that without a second source for the actual sale price and verification of the details of that sale is also juggling a time bomb. I gave up using Metro Scan (now Win2Data here) for the same reason, it was too far from reliable. When you find errors in a verification source, it's time to use something else. The reviewers and underwriters will and if more correct data is available to them, you'd better find and use it yourself. I guess I'm lucky here with all of that available free online directly from the counties.
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
An instructor that I take some of my CE classes from and I have known for several years, provides assistance free of charge to appraisers that take his classes that go B4 their state boards. He doesn't help if they've comitted fraud. He only helps if the state board is out of control or the appraiser made an honest mistake and just needs some additional training, etc. This instructor has stated in class more than once that lawyers for the opposing side salivate once they learn the appraiser has a file that is more than five years old. Or in the case where testimony was given 5 + 2. I plan to destroy every file I have when they are five years old unless I find out our state has a law that exceeds the 5 year minimum. It seems to me that a state would have a hard time making a case against an appraiser that followed the USPAP.
 
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