USPAP/Record keeping question

[Oregon Doug]

I've read USPAP as much as most of you (and more than some) - so I have a pretty good idea what IT says. My question is very specific: When an appraiser retires and is no longer performing appraisals - how long must he retain his workfiles? Who says so - who is the enforcement agency? (I understand USPAP & common sense issues).

The situation: The appraiser retired last year, license has expired (not renewed), he HAS NOT been appraising since then. Complaint is filed on an appraisal he completed when he WAS active/licensed. He no longer has his old work files.

Obvious answer is that it is a USPAP Record Keeping violation - but - if he's no longer an appraiser, how can an appraiser regulitory agency enforce USPAP compliance on a "non-appraiser"? I don't think so.

In manditory states, the appraiser regulitory agencies may enforce "un-licensed" appraisal activity, but could they hold an un-licensed person accountable to USPAP? I don't think so.

Oregon Doug

 

[Bob Ipock]

Only state appraisal boards enforce USPAP....you know that Doug.

As with all investigations and discipline....the individual state is in charge. There are no Appraisal Foundation USPAP police or investigators.

Don't know about Oregon....but in NC....the appraisal board can refer cases to Superior Court for prosecution....even if the violator is not an appraiser.

§ 93E-1-13. Penalty for violation of this Chapter.
(a)Any person who acts as, or holds himself or herself out to be, a registered trainee or a State-licensed or State-certified real estate appraiser without first obtaining a
registration, license, or certificate as provided in this Chapter, or who willfully performs the acts specified in G.S. 93E-1-12(a) shall be guilty of a Class 1 misdemeanor.
(b) The Board may appear in its own name in superior court in actions for injunctive relief to prevent any person from violating the provisions of this Chapter or the rules
promulgated by the Board. The superior court shall have the power to grant these injunctions whether or not criminal prosecution has been or may be instituted as a result of the violations, and whether or not the person is the holder of a registration, license, or certificate issued by the Board under this Chapter. (1993, c. 419, s. 6; 1994, Ex. Sess., c. 14, s.49; 1995, c. 482, s. 10; 2001-399, s. 1.)


Just because a doctor, lawyer, plumber, electrician etc. has retired....would not mean they were no longer responsible for their actions prior to retirement.

The issue would be what the complaint is all about....rather than the record keeping portion of The Ethics Rule.

 

[Randolph Kinney]

Doug, you have a practical question that needs to be on the exam. USPAP requires that the work files be kept for 5 years from the date of the appraisal or 2 years after final disposition, whichever comes last. So theoretically, that is 7 years assuming worst case.

USPAP governs for licensing however, since the ex-appraiser has no license at present, who cares what happened when he did? Well, someone might care. But what really is going to be the sanction imposed by the state appraiser board for not having the work files? Take your license? Fine? Require submitting your log for future appraisals? No license sort of obviates all the administrative sanctions the board can impose on an unlicensed appraiser.

 

[xm39hnu]

Check the statutes, Doug. Look for tail coverage loopholes, like Bob pointed out in the NC statutes.

Aside from that, civil action alleging a faulty appraisal can arise at any time during the statute of limitations. I'd hang onto those records for the full term, if I were you. You may need them.

Also, make sure you've got tail coverage on your E&O, if you carry it.

 

[Bob Ipock]

1) Doug did not indiate he was talking about himself. Makes no difference.

This is NOT directed toward Doug at all.


This is an issue staes should jump all over ASAP. I suspect there will be many appraisers "retiring" as investigations and complaints come up with their name on them. Throwing away or disposing of files should not be allowed as a way to avoid investigations that sometimes lead to criminal complaints.

I know for a fact that some state appraisal board members in several states have some complaints just waiting to be filed. When they leave the state boards some complaints will be mailed. Retirement should not let anyone walk away from responsibility.

States need to take a look at the issue of requiring files to be maintained for five years BEYOND an appraiser giving up their license. That seems like basic common sense to me.

 

[Randolph Kinney]

Criminal complaints are one thing, separate of administrative or civil matters; you don't even have to go through the state board for a criminal complaint.

 

[Steve Owen]

It reminds me of something that happened back when Missouri was doing an audit of every appraiser in the state a few years ago (supposedly). Anyway, these audits were supposed to be random, but they kind of came together geographically. I got audited at the same time as a lot of other Joplinites.

Well, while I'm talking to the auditor on the phone, she asks if I know this particular guy. It was my mentor, who had retired a couple of years earlier. I said yeah, I know him, what do you need? She said she had tried to reach him and he didn't return her calls... so, I said I'd get hold of him for her.

I called him up and he said something like "They can go jump in the lake... what are they going to do to me take my license away?"

I called the auditor back and basically told her what he said. Then I offered this tidbit. I have all of his files from when we were working together. That covers the last several years of his practice. If you really want to audit him, I can supply the files.

She said, let me check with my supervisor.

Well, they proceeded to audit me. Somewhere along the line, I asked her if she still wanted to audit this other guy's files. She basically said, "we decided to drop it."

Bureaucrats love their bureacracy, don't they?

 

[George Hatch]

Two issues here: the first one is a USPAP issue (required to keep the files); the second one is a licensing issue (required to adhere to USPAP).

In terms of USPAP the appraiser would be in violation of our professional standards if they failed to adhere to the Record Keeping section of the Ethics Rule. In terms of licensing, if the board doesn't have jurisdiction over the individual they may not be in a position to enforce that section of the rules/regs that require adherence to this USPAP requirement. It depends on how the rules/regs are written and what obligations, if any, a former licensee has to comply with this requirement.

As a practical matter, there's not much a board can do to a former licensee, except maybe fine them or, if its serious enough, refer the matter for criminal prosecution.

 

[DH Wilson]

if an appraiser "retires" and destroys his files to avoid criminal prosecution or a board complaint it is called "intentional spoilation of evidence" which probably would carry a comtempt charge, sanction and fines if not more depending on the court it happens in. All the juicy docs are outside of my westlaw subscription and Im not paying for those for here. but here is an excerpt from case law :

One may infer from the intentional destruction of evidence that its production would have been unfavorable to the intentional spoliator.

Heres the federal law, most states follow suit:

18 U.S.C.A. § 2232 Destruction or removal of property to prevent seizure

(a) Destruction or removal of property to prevent seizure.--Whoever, before, during, or after any search for or seizure of property by any person authorized to make such search or seizure, knowingly destroys, damages, wastes, disposes of, transfers, or otherwise takes any action, or knowingly attempts to destroy, damage, waste, dispose of, transfer, or otherwise take any action, for the purpose of preventing or impairing the Government's lawful authority to take such property into its custody or control or to continue holding such property under its lawful custody and control, shall be fined under this title or imprisoned not more than 5 years, or both.

 

[Oregon Doug]

One may infer from the intentional destruction of evidence that its production would have been unfavorable to the intentional spoliator.

Heres the federal law, most states follow suit:

18 U.S.C.A. § 2232 Destruction or removal of property to prevent seizure

(a) Destruction or removal of property to prevent seizure.

Does not apply as there was no INTENTIONAL destruction of the files to prevent seizure. The appraiser's license expired on a Friday, he retired (filed for SS within a few days), closed his office and burned ALL his files. A complaint was filed a month or more later (complaint was unfounded and dismissed). But there was no workfile available (Records Retention violation).

There was no criminal violation or intent, nor was he an appraiser when the complaint was filed. Does the regulitory agency have jurisdiction? I think not.

Oregon Doug