The Reviewer Who Signed Off Without Visiting
You are performing a field review (Standard 3) of an appraisal of a 320-acre irrigated farm with a 1970s machine shed and a grain bin complex. The review assignment required an exterior inspection of the subject and at least a drive-by of the comparables. You inspected the subject and two of the four comparables. The report's effective date is 14 months before the review. In your review you conclude that the appraiser overstated the contributory value of the grain bins by roughly $60,000 because the report describes them as 'modern, well-maintained' while your inspection shows significant rust-through, missing roof panels, and a non-functional auger. The original appraiser's certification states the bins were inspected. Your review report states you 'verified the subject's condition' without noting which comparables you did not see.
1. Identify the USPAP Standards Rule issues in both the original appraisal and in your review report.
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Original appraisal:
- If the appraiser certified an inspection but did not actually inspect, that is a false certification and a violation of the certification and record-keeping requirements. The condition description ('modern, well-maintained') conflicts with observable condition, suggesting either no inspection or a misdescription.
- The contributory value conclusion for the bins must be supported; if it rests on a misdescribed condition, the analysis is not credible.
Your review:
- Standard 3 requires the reviewer to state the extent of the review process, including what was and was not inspected. Stating you 'verified the subject's condition' without disclosing that two comparables were not seen is misleading.
- The review must disclose the scope of work - subject inspected, comparables #1 and #2 only. Omitting this impairs the credibility and transparency of the review.
- You must also address whether the original appraiser's inspection claim is consistent with your findings and state the effect on the review opinion.
Both reports must be revised to accurately disclose scope and condition.
2. The effective date is 14 months old. How does that affect the review, and what must your review report say about it?
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A 14-month-old effective date is not automatically disqualifying, but it changes what the review can conclude.
- The review is of the appraisal as of its effective date, not as of today. You must judge whether the value opinion was credible given the market conditions at that date.
- You must disclose the gap between effective date and review date and discuss whether market conditions changed materially in the interim (e.g., land values, input costs, interest rates). If they did, the review should note that the original conclusion may no longer reflect current value, but that is not the question the review answers.
- Your review report must state the effective date of the review opinion and confirm you are reviewing the original as of its date.
- If you inspected the subject 14 months later, you must acknowledge that current condition may differ from condition at the effective date and explain how you accounted for that (e.g., reliance on dated photos, owner statements, or limiting the condition finding to what is verifiable).
Failing to disclose the date gap and its effect is itself a review deficiency.