Scope of Work Question

[PropertyEconomics]

I have a question regarding scope of work.
When you deliver a report to your client, whomever that may be, and they find say typographical errors, errors in reporting about the property, any errors at all, and ask you to correct those ... do you, in the corrected report, revise your scope of work to show that the report was corrected at the request of the client and whether or not the value conclusion was affected?

 

[Darrel Clark]

Is it a new report or a corrected report? If it is a corrected report, I don't believe your scope of work has changed.

 

[Rufus]

I make a note as to what was revised and the date of revision. I also change the signature date and put the word REVISED after it.

 

[Mztk1]

The scope of work does not change, but I will attached a cover letter stating the changes made in the new version of the report, and I will put in the addendum, or in another place on the report, what changes were made. I also will change my signature date.

With EDI, once those reports are out there, they are out there for good, so if there are going to be two reports I want the reader to be able to tell which is current and what and why it was changed.

 

[PropertyEconomics]

The scope of work does not change, but I will attached a cover letter stating the changes made in the new version of the report, and I will put in the addendum, or in another place on the report, what changes were made. I also will change my signature date.

With EDI, once those reports are out there, they are out there for good, so if there are going to be two reports I want the reader to be able to tell which is current and what and why it was changed.

Jim I ask because I think your scope of work has changed but I can be convinced otherwise. It may have been changed to the extent the client has reviewed the report and made further requests regarding that report of the appraiser. I am curious if others believe this falls within and requires additional scope comments.
If you were to put a letter in the report, as you suggest and do, it seems to me you are effectively doing the same thing only calling it something different.
What if the request, or new information (or correction of information you had) results in a change in the value?

 

[Mztk1]

It has. Just last week. The house I appraised had a non-permitted room in the garage which I didn't count in value. It was a three car garage. The cost to remove the interior walls was less than $500 - it was really a make-shift type of office, but functional. I commented in the report all about it and how it is not considered in living area and not in value and that the cost to cure is less than $500, but then in the sales comparison approach I gave value for a 2 car garage only. I fell asleep on the report actually. I had to finish it before taking my seven year old son to the hospital (he's okay now), and the rush made me do something stupid that was picked up on.

I changed the report, increased the value, stated the error that was made and how it was corrected in both a cover letter and in the addendum, and gave it a new signature date.

Whether the scope of work changed or not, I don't know. I think I was still asked to appraise the property for market value following the client and Fannie guidelines and that remained the same. My best guess would be that I was supposed to be accurate and instead of the scope of work being changed, it wasn't quite lived up to perfectly the first time, so it is more of a correction to comply with the original scope, than a change in the actual scope.

I could be wrong.

 

[c w d]

Typographical errors are not necessarily the same as factual errors. Factual errors may be due to typographical errors which then lead the appraiser to an incorrect analysis and opinion of value.

Purely typographical errors that do not affect my analyses and which do not mislead the reader, i.e. poor spelling, incorrect grammar, I have no problem changing without notation.

If the error did have an effect on value I would consider it a correction of the report. I notate the error and the change. Of course, I do proof read all of my reports and have yet been asked to correct a significant factual error affecting my opinion of value. I'm not saying they're not out there but, I would suspect these types of errors are very low in my works. Skippy, just get the reports out, can't say the same thing.

Do I consider this a new assignment or a different scope of work? No. The reason is if you provide an appraisal with factual errors and then provide another one with the correct information then you have one misleading report that is not properly addressed. I believe the best course of action is to correct the existing report. Notate the mistakes. Notate the corrections. This way, while there may be a rogue copy out there, you are not misleading the reader. Your will, hopefully, have documented in your work file the communication with the client and the steps you took to correct the report. It's most definitely not a new assignment. The scope of work has not changed for corrections. However, for additional analyses and data that you did not recognize before submission, perhaps. One's scope of work is premised on a factually correct report. So how is the scope changed by correcting them?

Purely from a liability perspective, since we don't have any ability to nullify a submitted report, you do not want a factually incorrect report floating without corrections while another exists with a differing opinion of value.

 

[Elliott]

PE,
"WHY?" You could put in a line about subsequent revisions in the original
SOW and then you'd have covered your butt. I haven't made an error
requiring correction for years.

 

[PropertyEconomics]

Typographical errors are not necessarily the same as factual errors. Factual errors may be due to typographical errors which then lead the appraiser to an incorrect analysis and opinion of value.

Purely typographical errors that do not affect my analyses and which do not mislead the reader, i.e. poor spelling, incorrect grammar, I have no problem changing without notation.

If the error did have an effect on value I would consider it a correction of the report. I notate the error and the change. Of course, I do proof read all of my reports and have yet been asked to correct a significant factual error affecting my opinion of value. I'm not saying they're not out there but, I would suspect these types of errors are very low in my works. Skippy, just get the reports out, can't say the same thing.

Do I consider this a new assignment or a different scope of work? No. The reason is if you provide an appraisal with factual errors and then provide another one with the correct information then you have one misleading report that is not properly addressed. I believe the best course of action is to correct the existing report. Notate the mistakes. Notate the corrections. This way, while there may be a rogue copy out there, you are not misleading the reader. Your will, hopefully, have documented in your work file the communication with the client and the steps you took to correct the report.

Purely from a liability perspective, since we don't have any ability to nullify a submitted report, you do not want a factually incorrect report floating without corrections while another exists with a differing opinion of value.

Both you and Mr. Klos make sound reasons for why it is not a change in the scope of work.
My question arose from another thread that got me thinking about this issue. I dont think I have ever changed a value as a result of a mistake but it may have happened. A few reports have been done over the years and unfortunately I cant remember them all.

 

[CANative]

I just added a comp for the brokers funding source. I added a paragraph to my expanded SOW section.

NOTE: Clients funding source requested an additional comparable sale. The appraiser has cooperated with this request by adding comparable sale 6 to the report and revising the report date to June 18, 2008. The effective date of the appraisal has not changed and remains May 3, 2008. The appraiser did not inspected comparable sale 6 from the street for this assignment but has driven by this property numerous times over the years. The appraiser does not consider this property to be an ideally comparable property due to numerous dissimilarities to the subject in terms of quality and size of the residential improvements, signficantly smaller lot size but superior topography and appeal, numerous outbuildings and locational differences. This sale has been presented at the request of the investor and is the only closed sale of a property in the Anderson Valley of any reasonable comparability during the time frame imposed by the investor. See Comp 6 sales grid information, additional map page and comments on the sales comparison in the supplemental addendum. The investor has also requested a list of comparable land sales but this was already included in the prior report. Refer to Page 13 of 23 titled: Land Sales