The Personal Property Appraisers Post

The free "ACA Appraiser's Update" e-newsletter is published by Appraisal Course Associates partners certified appraiser, author and instructor Dave Maloney and AQB-certified National USPAP course instructor Bill Novotny.

The current December, 2009 edition contains:

• IRS Definitions of "Qualified Appraiser" and "Qualified Appraisal" Continue to Evolve
• USPAP Changes for 2010-2011
• Report Credibility Requires USPAP Compliance
• All-new 3rd Edition of Unique How-to Book for the Personal Property Appraiser
• USPAP Q & A - Due Process of Law
• Form 8283 Source of Identity Theft?

If you did not receive a copy, you are welcome to check it out at http://bit.ly/ACA10.

While there, be sure to sign up for future ACA Appraiser Update e-newsletters.

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Hot off the newswire: (Dec. 4, 2009) The House voted yesterday to permanently extend a 45 percent inheritance tax on estates larger than $3.5 million, canceling a one-year repeal of the tax set to begin next month. http://bit.ly/6XpiBO

It is possible to be more environmentally responsible, save money, and provide a high level of service to your clients by providing secure online access for your clients to the appraisal reports.

Meet Gene Ruelle, an accredited senior appraiser in the ASA with his specialty in antique furniture. Gene is from Tyler Texas with over 15 years experience appraising personal property. Gene has created a secure online web site where his valued clients can securely access their appraisal reports for up to five years. The result is saving of money by eliminating the paper, postage, ink and toner from the report creation and delivery process.

How does this work?
Gene now saves every report as a PDF file. This PDF file is a complete report including the cover documentation, electronic signature, and all disclaimers and USPAP information. Once created, Gene uploads the appraisal report files to his secure online document storage system. Clients are then notified via email that the report is available and are sent a link and their login information to access the report online.

Clients click the link and enter their login information to access the secure site. Once logged-in, the client is presented with a list of their appraisal reports, and other documents created specifically for them. The client can then click on a link and display, download, or print the appraisal reports.

Benefits
• Save money on toner, ink, paper, and postage
• The report is available for the client 24 x 7 x 365 with no intervention from the appraiser
• Report is stored on a secure website not a PC making the USPAP record keeping requirements much easier to adhere to
• Report is delivered to the client much faster than postal or courier
• Clients come to the branded site to access the report and they see your name and branding each time

Feedback from selected attorney clients is fantastic. They love the instant access to the information and ability to access the reports from anywhere with an internet connection.

See a Sample of how this Works
Here you can see a sample report and what the client experiences when using this unique service. Feel free to log in and check it out.
(Note: the reports on this site are sample reports only)

Visit http://secure.ruelle.com
Login – appraiser
Password – doyourbest

Feedback
Please comment and let me know what you think about this method of report delivery. Is this something you think is valuable, or not to your appraising practice?

Resources in this Blog
Gene Reulle
Ruelle’s
http://www.ruelle.com/
gene@ruelle.com

About the Author
Brian Hiatt
bhiatt@collectorpro.com
www.collectorpro.com

The International Society of Appraisers would like to invite you to participate as a sponsor of our annual conference, Assets 2010, taking place April 30 – May 3, 2010 in Toronto, Ontario.

A variety of sponsorship options are available, from advertising in the final program, to sponsorship packages inclusive of multiple benefits and advertising opportunities. For full details on sponsorship packages available to you, download our Sponsorship Guide.

ISA is a not-for-profit organization whose members are some of the most respected independent appraisers, consultants, estate liquidators, auctioneers, gallery owners, and dealers in the United States and Canada. Join ISA in Toronto this spring to reach your audience.

For more information regarding sponsorship and advertising, please contact ISA Headquarters.

phone: 312.981.6778
email: isa@isa-appraisers.org

The following comment was posted in regard to Appraisers Post contributor Jerry Sampson's post on looted property. I found it important enough to move from the comments section on a post page to the main blog posting area.

Click HERE to read the original post. The comment comes from Robert Edsel, founder of the Monuments Men Foundation.

My name is Robert M. Edsel, founder of the Monuments Men Foundation for the Preservation of Art (www.monumentsmenfoundation.org), 2007 recipient of the National Humanities Medal. I am also the author of The Monuments Men: Allied Heroes, Nazi Thieves, and the Greatest Treasure Hunt in History.

Mr. Jerry Sampson has written a very thoughtful inquiry about the challenges faced by professional appraisers in dealing with items that may have been stolen during World War II or possibly "liberated" by Western Allied troops. The Monuments Men Foundation, a 501 (c)(3) organization, receives inquiries almost every day from heirs of soldiers and others who have a concern about an item in their possession. A key part of the Mission Statement of the Foundation is to advise people and help illuminate the path home for any items that do not belong to the person possessing it.

Various guidelines exist to assist museums and others about works of art. Simply put, owners should know where their items were during the years 1933-1946, oftentimes referred to as the "gap" period. Items "liberated" by troops are a particular area of concern, especially when they involve any item considered cultural property. Generally speaking, this would exclude knives, guns, swastikas, etc.

Hundreds of thousands of works of art, library books, documents, and other cultural treasures remain missing from World War II. Our organization remains ready to assist all people of good will in determining the correct provenance of items affected by the war and in so doing, helping complete the mission of these great heroes of civilization---the Monuments Men and women.

We would be pleased to assist Mr. Sampson or any members of your organization. I encourage your members to visit our website and learn more about our work.

Robert M. Edsel
President
Monuments Men Foundation

My partner, AQB-Certified National USPAP Course instructor Bill Novotny, and I are pleased to provide you with a free, 22-minute narrated video overview of the changes recently incorporated into the new 2010-2011 edition of USPAP by the Appraisal Standards Board. The new USPAP is effective January 1, 2010 through December 31, 2011. To view the video go here.

Some changes are minor, but some will have a significant impact on your practice, such as the new requirement to disclose any service you've provided regarding the subject property over the past three years. Did you sell it? Appraise it? Restore it? Own it? If so, you have some new reporting requirements with which to comply.

As authors and appraiser educators, Bill and I focus on USPAP compliance. And our work as expert witnesses has made us acutely aware of the importance of performing and reporting appraisals that are USPAP compliant.

Make sure you have a current copy of USPAP and that you stay abreast of USPAP changes. Don't have a copy of USPAP? Purchase a copy from The Appraisal Foundation by clicking here.

Questions? Feel free to contact us:
info@appraisalcourseassociates.com
http://www.appraisalcourseassociates.com/

I'm in the middle of reading The Monuments Men by Robert M. Edsel. This is a non-fiction work about a group of men and women enacted by various governments to preserve cultural art works during WWII. This question came to my mind. What role if any, does the professional appraiser play in regards to potentially looted or stolen property? What if in doing a house inspection, for any number of reasons, you find a great work of cultural art in an unsuspecting family's collection? WWII has been over for 60 plus years now. These items could have easily passed onto several other family members hands by now. Families who had no idea that this object could have been pillaged by or just bought on the street by "grandpa" decades ago. Objects that might even be listed in previous appraisals or estate settlements. What right do we have, if any, to report these findings and to whom would we report? I've searched USPAP and inquired with other seasoned appraisers only to get vague answers. Of course, I understand the articles of due diligence, our ethics and our code of conduct but unless information is requested by the government we're strictly confidential. What if our client is aware of it's history and provenance? And they thought that enough time had passed that no one remembered or cared. When should we know to cross a line and involve other authorities and how does this affect our relationship with our clients. I think that there are a lot of interesting questions here. Any answers??
Jerry Sampson

On September 23rd I posted a request for help here on the Appraisers Post and the AW Blog from a fellow appraiser who was seeking advice on an assignment where an uninhabited house full of valuable property, from antiques to books, required valuation and mold remediation (click HERE to read the original post).  The advice and comments sent in return were excellent, and the appraiser was most appreciative of the responses.  He send me the following update and asked if I would pass it along.  His name and location remain confidential in order to protect the various parties involved.

I did make contact with the executor a few weeks ago just inquire as to the situation of the estate settlement and the mold issues. The mold was a powdery Gray-greenish mold and could be cleaned with some effort though it was thick. I was told that the gentleman, who was the previous owner, through a power of attorney maintained a high standard of insurance. The insurance company's adjuster, the executor, the lawyers and the local health department all met together for some time. It was discovered that the elderly gentleman maintained a very good inventory with all the invoices for what he paid for items and other important papers intact. The latest additions were dated to the years 2003 - 2004 periods (so it was still kind of current). The insurance adjuster then scheduled for a hazardous materials clean up company to clean the house. Three large tents were put up to house the cleaning of the personal property. There was a crew of about 40 people who undertook this task. Which was then inspected by the health department and other officials. Drywall had to be replaced in this case and the studs and flooring were bleached,washed and/or painted. I have no idea how well things cleaned up. It sounds like it was a simple wipe, sweep and wash kind of job.

The executor and the lawyers contacted various benefactors and alerted them to the situation that in lieu of their share of actual property they would receive a monetary compensation instead. They were offered a waiver to sign that if they wanted to attempt to purchase items for sentimental reasons that they could do so and would after wards receive them free of charge up to the value listed in the old inventories. (I think that this is kind of strange.) Those items like rugs, household linens, upholstered furnishings or other porous items that could not be cleaned were "bought" by the insurance adjustor's company (based again on the old inventories) and the executor settled, with increases for inflation and other variables, for an undisclosed amount. The library was on the far end of the house and was not affected to the degree that the rest of the house was. All art work and books were successfully cleaned. There is an auction scheduled for sometime this early December for general household and antique items. The art work and very high end pieces have since been sent out of state to a regional auction house. All in all this was very complicated and I'm glad that I was kept out of the loop.

By Stephen P. Sweeting, ASA, MRICS

Although it might be a little early to administer last rites, the October 26 bankruptcy of Ritchies Auctioneers in Toronto appears to be the end of the 42 year old firm. I’m not going to go into the contentious reasons behind the insolvency; readers can check the following link in The Globe and Mail for a blow-by-blow account of the firm’s disastrous last few months: Auction house Ritchies forced into bankruptcy. Some of you may recall that I touched on Ritchies’ failure in an August 2009 post exploring how structural changes in the business landscape might affect local fine art and antiques markets. (See: Think Global and Think Local) Ritchies' business troubles first manifested themselves to the wider public when Sotheby’s Canada ended a multi-year auction services agreement with the firm due to the non-payment of consignors.

Ritchies was a quirky regional firm that tended to cater to the lower and mid-level art and antiques market in the Greater Toronto area. But every now and then the small firm scored some real successes that pushed them onto the national and even the international stage. The sale of a remarkable Francois Boucher pastel drawing for a record-breaking half a million dollars was one such foray onto the international stage. And their most recent association with Sotheby’s catapulted the firm into Canada’s top-tier fine art auction market. It was in the Ritchies salesroom that Sotheby’s sold Paul Kane’s Scene In The Northwest- Portrait for CAD $5.1 million including buyer’s premium in 2002. This record price for a Canadian painting sold at auction still stands today.

The failure of a regional auction house is not particularly newsworthy in the grander scheme of the international fine art and antiques marketplace. As most of us know, smaller auction houses both come and go. But as a former cataloger at D. & J. Ritchie Fine Art Auctioneers & Appraisers – the original incarnation of the firm before it was bought by the current owner – I have to admit a little sadness over the troubles and the insolvency. I cut my teeth in the appraisal of personal property at Ritchies and would be remiss in not marking the firm’s passing in this forum.

Appraising Judaica: Following new trends in Judaica Auctions
Posted by Elizabeth Kessin Berman, A.A. A.N.A.

Here's my first posting on issues in appraising Judaica.

It used to be that I would wait patiently for the Judaica auction season and then, after studying the limited objects put up at auction, I would settle down to study the catalogs and the results through the winter and spring. But this year, Judaica auctions continued into the winter and well into the spring. Some auction houses have even started organizing Judaica auctions every other month.

The auction floor has also expanded. Not all of the important Judaica pieces are going to the large auction houses in major world capitals. Smaller auctions houses are attracting Judaica collectors and Judaica collectors are more willing to divert their attention from New York. There are now other stages.

At Skinner Auctioneers in Boston, auctioneers were very pleased with the results of their Judaica sale held in late May. Their website that reports: “Skinner's May 2009 auction of Fine Judaica was a tremendous success, more than tripling the pre-sale estimate and grossing over $1.2 million for just over 200 lots of antique and artisan Judaica. The top lot in the sale was rare and important silver and silver gilt Synagogue Ark-form Hanukkah Lamp, originating in Brody (Galicia), and dated 1787. Auctioned for an astounding $314,000, against a pre-sale estimate of $60,000-80,000.” At Kaminski’s Auctions, located in a suburb of Boston, several Judaica items often appear in each of their monthly auctions.

Just last year a new auction house was launched in Jerusalem: Kedem Auctions is producing stunning catalogs with well written well researched titles. The catalogues are written in both Hebrew and English and they contain a wealth of information for collectors, historians and appraisers alike. Kedem auctioneers are not only up on their research, they are also very ambitious. They are holding auctions every 2 or 3 months. Kedem is also pushing the envelop and offering items that are not your well-known ritual Judaica objects. They are identifying new areas of Judaica collecting. More on this in my next blog.

I’ve also been following several on-line auctions such as Ben Ami Endres and a few others operating as Ebay stores. Additionally, a few auction houses who are principally known for their offerings of Modern/Contemporary Israeli artists are also attaching Judaica objects to their sales. Tiroche in suburban Tel Aviv has several sales of Judaica and these are often included with European decorative arts. Hammersite in Ramat Gan, Israel, also has Judaica lots included in some of their auctions.

(Click Read More below for the rest of the Article)

Posted by Todd W. Sigety, ISA CAPP

Last year for the Appraiser Workshops Blog I found a well written and informative article on litigating insurance claims. Although much was not applicable to the personal property appraiser, within the article was a very good interpretation of the Broad Evidence Rule. The Broad Evidence Rule (BER) in effect states that "every fact and circumstance which would logically tend to the formation of a correct estimate of the loss" may be considered by the courts. It is of course up to qualified appraisers to place a value or multiple values on property based upon the facts and multitude of circumstances.

The Broad Evidence Rule is defined on Forbes' site Investopedia as "A rule outlining the guidelines insurers must go about determining the value of lost, stolen or damaged property. The broad evidence rule does not specify any one method to value any one piece of property, only that the means which most accurately displays the true cash value of the property will be used."  Forbes clarifies the definition with "The broad evidence rule is used by insurance companies to determine the cash value to be paid out to the insured in the event of a claim. As opposed to using the traditional cash value (replacement cost minus depreciation), the broad evidence rule can take into account such factors as the age of the property, its tax value and any possible profits the item may have accrued".

David Maloney in his popular appraisal reference book Appraising Personal Property: Principles and Methodology (page 112) expands on the BER interpretation with  "The Broad Evidence Rule (a.k.a., The McAnarncy Rule) states that there are no fixed or rigid guidelines for the determination of the amount of recovery in case of loss. The two standards normally used (fair market value or replacement cost (new) less deprecation) are merely guides, and are not the sole determination of actual cash value. The rule allows for consideration of all the facts and circumstances (such as degree of obsolescence at time of loss, property has no market value-in-use, profitability, owner's opinion of value) which logically tend to develop a correct estimation of value of the destroyed or damaged property for the purpose of ascertaining the actual cash value at the time of loss or damage".

Because of the wide spread acceptance of the BER by the judicial system, much is left open to interpretations by the court. The BER has been viewed as both a positive and a negative in settling insurance claims. In any event, appraisers working on insurance claims should be aware of and familiar with the BER and how it is applied. The following excerpt on the BER is an excellent starting point. It is a good addition to what is typically found in personal property appraisal theory and methodology texts as it is written by attorneys.

(Click Read More for the rest of the article)