Expiration Dates on Reports
Updated: Apr 10, 2020
When an appraisal is created, it is a snapshot in time of the condition, content, and market value of the items listed in the report. It is never a forecast of future value and only in certain situations may reflect the value of a previous date, an “effective date,” of a tax related event such as a gift, donation, or a decedent’s date of death. Even tax reports may fail to detect hidden accidental or intentional changes in condition, or content that may have been made since the effective date to the date of the appraisal. Obviously, an appraisal looking back at a particular date for a tax related issue applies solely to the date listed on the report and will never expire. Having an effective date on a report clearly makes such a report valid only for the date listed. No expiration date should be on such reports.
The larger concerns all other reports, such as retail replacement valuations, marketable cash valuations, and liquidation reports. Although they do not need to have an “effective date” declared, such reports are still simply a snapshot in time on the date of the appraisal and not a valid forecast of future value. The appraiser is never liable for alterations of content , condition or market forces beyond the date of the appraisal. Any one or a combination of these three elements may invalidate the conclusion of value without warning. While most of the time a report remains valid for months or years, there is no specific way to predict an expiration or change in value.
All those who are users of appraisal reports must set their own limits on how long to rely on reports which may have become invalid due to changes of condition, content or market forces. The appraiser’s sole responsibility is to be correct on the date of the report. Placing an expiration date on an appraisal report implies that the appraiser has a responsibility for use of the report “as-is” until the expiration date. If the appraiser states in their report that values, condition and content may be subject to change before the stated expiration date, then what does such an expiration date mean? “Nothing” would be the resulting conclusion. We suggest that users of reports set their own parameters for how old a report must be to be invalid or no longer acceptable. Appraisers may recommend re-evaluation based on a blanket suggested time frame of their choice or state “unforeseen changes in market values may invalidate an appraisal value at any time” but using a definitive “expiration date” is not a recommended practice.
David Atlas, GIA GG
Chair of Ethical Issues