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Record Keeping…Forever?

Q: "This is just a general question about record keeping. I know I have to keep my files for 5 years to be USPAP compliant but a buddy of mine just got sued for an appraisal he did about 10 years ago. He destroyed his work file long ago and is really worried. My question is, should I be keeping my files for 10 years or longer, just to be sure?"

A: While I wish every appraiser would keep all their files forever, I know that is not practical and that it could be very expensive. We find that most claims are filed within 36 months of the date the appraisal was prepared. As a result, the vast majority of claims fall within the 5 year period. Claims made on reports more than 5 years old are rare. If claims are made it seems that, most of the time, the report in question is barely over 5 years old. I always tell appraisers that you will probably be safe if you keep the files for 5 years as required. If you want an extra layer of caution, keep the files for 6 years. Of course, I can’t promise that you will never be sued on an older report, as in the situation facing your friend, but the odds are pretty high against it.


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