USPAP question

[J Grant]

"The first company inspected the roof late spring and did core samples of decking and suspension rafters. The second did it in the dead of winter with 6 inches of snow and completed no core samples."

Apple vs Lemon comparison, placing more/most weight on the Winter report would be, IMO, intentionally negligent.

Negligent or misleading? I don't see where an FRT or foreclosure use erases obligations wrt to either. .

HC : An appraisal can be done assuming property condition on the 2nd inspection result of a lesser defect, ( the snow covered it! ) Okay....but report in order not to be misleading, would need disclosure of what first report found via core samples, and state the client chose not to use first report, and that client ordered a second report in winter when inspector could not take core samples, and appraiser used the second report at client request for analysis . It could have two values, one value using first report, the other value using the second report.

 

[glenn walker]

Glen, my friend, you should consider switching to decaf. And my cover-up BS was performed because??? Well...put on your aluminum pyramid-shaped hat and think about it. I am excited to hear the answer that comes to you through the cosmos.

Anyway, I appreciate the thoughtful feedback and God bless you. George thanks for the input and the rest who gave some insight into this issue. It is greatly appreciated.

Space to earth- My space ship is dead in the water, should I use a EA or HC condition ? Houston to rocket man we need more information before we can assess the situation. Rocket Man to Houston, I am out of fuel. Houston no our computers show you forgot to turn the fuel switch to the on position-- Rocket Man to Houston, thanks, I just did it and all rockets are up and running, I believe my Tin-Foil Hat may have inter-feared with my thinking process. I am now at 20,000 mph and should be over Cape Canaveral Florida in less than 8 hours. Houston to Rocket Man , wake up it has been the Kennedy Space Center since 1973 , and take that damn Tin Foil Hat off and thats an-order. Houston to Rocket Man its boring down here in space command and we are wondering how is that complex roofing issue going with that CG down here on earth ? Houston not sure, seems like he is going to use the inspection that was completed during a major snow storm, and declare an-extraordinary assumption, the roof is water tight, that way when spring hits, and all that snow melts, he will be out of the woods. This also increases the value because the Pre-Snow report showed over $100,000 worth of damage and that's before the real contractor comes out. Houston to Rocket-Man good thing you took off your tin foil hat because, we intercepted a memo on your computer and the CG says he is fine but you need to lighten up on the Tang and Black coffee so switch to decaf and take your mood enhancing meds before you land.

 

[Tom D]

i think that the typical jury, this city is the capital of jury awards, would find you guilt of misleading someone, anyone, who could take your appraisal to court for it having been used. they don't care about appraising rules, USPAP, or glenn's tin foil rocket ship, which runs on high octane coffee.

was the original question on misleading by accident?

 

[glenn walker]

i think that the typical jury, this city is the capital of jury awards, would find you guilt of misleading someone, anyone, who could take your appraisal to court for it having been used. they don't care about appraising rules, USPAP, or glenn's tin foil rocket ship, which runs on high octane coffee.

was the original question on misleading by accident?

"Calculated Deception"

 

[leasedfee]

Stephen,
An Extraordinary Assumption in my opinion is the correct course for the SOW. You could actually do two valuations. Valuation Scenario 1 assumes the 1st building inspection is correct and the 2nd inspection is not correct. Valuation Scenario 2 is the reverse. Valuation Scenario 3 is that neither are correct. Then let the engineers and inspectors fight over their report's validity. This isn't what your client wants, but the provides transparency and/or illustrates ways to structure the assignment(s).

 

[Stephen J. Vertin MAI]

Tim you actually pegged the scope of the assignment. My question revolved around Scenario 2. Thanks to George I also see the wisdom of using an extraordinary assumption.

 

[J Grant]

My post 31 also advised providing two valuations.

Re, how would extraordinary assumption be used for scenario 2 ( using the partial results inspection) EA of wha- That the first does not exist? (When it does ) That the second report is correct ?( when you know it is not due to partial ). The simple truth is appraiser is using 2nd report to get a desired result for client /at the client request to do so ,. Accept responsibility for that and disclose it but, how can it be EA away?

It may not be a case of first report is correct/second incorrect- the second report was only a partial inspection, deliberately ordered by client during winter snow season when client was aware the inspector could not be able to take core samples. And then client wants result of appraisal based on a less thorough second inspection. It is what it is.

 

[KONA]

JG you are spot on. Either address both inspections or decline the assignment.

 

[Stephen J. Vertin MAI]

Accept responsibility for that and disclose it but, how can it be EA away?

It appears you have answered your own question. Throughout the string, it is agreed an appraiser needs to own the first physical conditions report within the second appraisal (simple disclosure). However, I am not sure you can EA away anything.

Here is something else I am not sure of which you appear to be alluding to. So correct me if I am wrong. It is my opinion, the second report was standard procedure. The first report (which provided core samples) is actually above and beyond what is generally seen. My point is I am not convinced the second is substandard. What is convincing is the first report appears more credible. This may be splitting straws but none the less true.

The extraordinary assumption could be something as simple as "had xxxx company inspected the subject under ideal conditions the report would yield similar results". As a group, we have no idea how the second engineering firm will respond. It is not unusual to have dueling reports. Whether they are related to the physical condition or the valuation of the property, reconciliation is a major part of commercial appraising. This reconciliation is done in the third step of the assignment.

Here is what I do not get from many of the comments (not yours exclusively). That somehow the lender is going to cherry-pick the report and place the most desirable ones in the file? This begs the question of how is this possible without being caught? There are appraisal orders, emails, and checks paid for services. Further, such behavior would be a felony on the banker's part, it does not make sense to me as to why some believe this could happen. And most of all how is this the appraisers' responsibility?

J. Grant, sorry I did not see your two report comments. My bad, but I always appreciate your thoughtful input. Thanks

 

[Stephen J. Vertin MAI]

JG you are spot on. Either address both inspections or decline the assignment.

Please point to any of the posts saying cover-up a report?