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Cautionary Tale! Keeping Track of Work Files
Recently, an appraiser was the subject of disciplinary action by his State Board. The violation cited was “failing to produce records for an assignment under review.”  If you maintain work files for five years, as per USPAP, and figure you can stop reading because it could never happen to you, think again. 

Here is a lesson learned the hard way about keeping track of work files not in your custody and what can happen when you don’t.

Case Study
Most appraisers understand that under USPAP they are required to maintain their files for five years. But what about work files completed as a staff appraiser for a company you no longer work for? What if the company's policy did not permit the removal of your files when you left? What if the files are not recoverable today? 

The answer is that you still may be responsible.

The appraiser who is the subject of this story was employed as a staff appraiser for a company whose policy prohibited him from taking files when they left. Several years later the company was sold and sold again, eventually going out of business. This appraiser was never notified of these developments. He did find out the hard way, however, when his State Board required access to one of the files completed during his employment with the company.

After considerable effort and anxiety – calls, letters and more, he concluded that the files were lost or destroyed; no one in the chain knew where they were.   

“There is nothing requiring a company to notify you of the location or destruction of any files you leave behind, should a claim arise,” he said.  “It is the responsibility of the appraiser to make appropriate work file retention access and retrieval arrangements with the party that has custody of the files. In my case, I was never informed of the sale or dismantling of the business. The result was that the work files were no longer accessible.”

His case went on for several years but with attorney fees mounting, he decided to settle and pay the fine determined by the State Licensing Board.
 

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