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Think carefully before signing a Records Affidavit

Appraisers are often approached by attorneys seeking copies of the appraiser’s “business records.” These records would include appraisal reports and the contents of a work file. Typically, the appraiser would be served with a subpoena seeking production of the requested documents. A subpoena is like a court order and it must not be ignored. The appraiser cannot assert that the documents requested are “confidential” in an effort to disregard the obligation to respond.

What happens when the documents requested in the subpoena are more than 5 years old and the appraiser has already destroyed his or her file? The appraiser can contact the attorney who served the subpoena and explain the situation. Maybe a copy of the USPAP Record Keeping provisions might have to be provided to support the appraiser’s comments.

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When the attorney realizes that the documents in question no longer exist, most of these situations go away...but not all of them.

For example, an older appraisal report is requested because it is important to an ongoing legal dispute. It is often explained that the old appraisal “supports” a current value estimate. The attorney who served the subpoena really wants to use that old appraisal report as evidence in the current lawsuit, so they may propose that the appraiser sign a Business Records Affidavit.

The attorney explains that he will send the appraiser a “copy” of the old report and the appraiser simply has to agree it is, in fact, a “true” copy of the report that was destroyed. Simple, right?

The last inquiry we saw involved a 37-page appraisal of 9+ acres of vacant land in TX. The original report was prepared in 2006. The appraiser was asked to sign an affidavit, under oath, attesting to the fact that the copy provided to him was an “exact duplicate” of his original report.

Appraisers are asked to do this all the time and it may not be possible. The only way to attest that the copy is authentic would be if the appraiser could compare it, page by page, with the original report. Most appraisals do not have sequentially numbered pages. How would they be able to tell if pages were missing? Even if all the pages were numbered, how could anyone know if content had been altered?

If the appraiser refuses to sign the affidavit, the attorney might not go away. Sometimes they try to cajole and convince the appraiser telling him/her that there is “nothing to worry about”. The appraiser is told the attorney ‘likes’ their value and that it supports a current value. The appraiser is told the original report was really well done, and other such compliments. In one case, the appraiser was even offered a chance to prepare a current value appraisal and to act as an expert witness in the ongoing lawsuit, all for a pretty generous fee.

Sometimes the attorney will resort to threatening to subpoena the appraiser to testify at trial. The appraiser is told he/she will have to give their “excuse” to the Judge.

Try not to be flattered or intimidated. Think very carefully about what you are being asked to say under oath. Can you agree that the document you have been presented is a completely true and accurate copy of the appraisal you prepared if you no longer have your own copy of that report? If you are unable to so testify, then you must stand firm and refuse to sign the affidavit.

If you are presented with an affidavit, or if you are served with a subpoena for documents and/or testimony, you should notify your E&O carrier for guidance and to confirm whether there is coverage available under your policy in the event local counsel needs to be retained to provide assistance.

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