Who’s a Professional Art Appraiser?

corcoran-Jazz Bowl

Art appraisers are a dime a dozen. The appraisal of art and other personal property is an activity not subject to governmental regulation.

The large roster of art appraisers includes art consultants, art dealers, gallery owners, antique dealers, curators, house liquidators and second hand stores, curators, and even old Aunt Sara who lunches every two weeks at the CMA and then takes a spin through the galleries, and her nephew Michael who is finishing up an MA in Ancient Chinese Art history. Starting tomorrow, you can be an art appraiser and there is no license, education, test or registration required.

Even artists may feel themselves more than qualified to offer their opinion on the value of works of art.

A professional appraiser is a horse of another color and operates in an environment where education includes written exams not only of the formal elements of a professional appraisal, but also substantive knowledge in fields of expertise. A strict and comprehensive code of ethics regulates the activities of these appraisers. Each professional appraiser is required to engage in a substantial number of hours of courses in procedure and substantive fields as a condition of retaining certification. Those who meet these requirement are professional appraisers and their work is certified by the appraisal organization of which they are a member.

There are two major national appraisal organizations which have long histories of high professional standards: the Appraisers Association of America (AAA – based in New York City)  and the American Society of Appraisers (ASA- located in Washington D.C.)

In addition, on the international level, the Royal Institution of Chartered Surveyors  (RICS),  established by Royal Charter in London in the 18th century now boasts over 10,00 certified members globally. The International Society of Appraisers (ISA- base in Chicago), formerly a for profit organization, has become a non profit and is  making efforts to elevate its status. Curiously enough, their head office is run on a contract basis by a for profit organization.

A search for a professional appraiser should begin with a visit to the website of one or more of these organizations; certified members in good standing are listed together with contract information. The scrupulous can contact the organization to inquire about any pending or resolved complaints to the organization regarding an appraiser.

Because certified appraisers are bound by strict and comprehensive standards of ethics, and because of the mandatory educations requirements and the ongoing requirements for significant time spent each year on continuing appraisal education, these lists area good starting point in the selection of a true professional.

Starting in 2006, the IRS  (which was being deluged with itemized deductions for charitable  donations with vastly inflated values and numerous other deficiencies) persuaded Congress to enact laws (and then issued regulations) governing who can be an “IRS Qualified Appraiser” for a charitable donation in an effort to reduce fraud and incompetence.  Among the requirements are:

  1. Certified members in good standing of the top national appraisal organizations who are expert in the appraisal property being appraised;
  2. No conflict of economic interest and no personal connection with the donor.

Conflicts of interest (an ethical matter) include:

  1. Dealers/galleries appraising works of art which they sold to the donor, or to a family member or relative of the donor;
  2. Appraisers who are affiliated by marriage or by blood with the donor;
  3. Appraisers who, in the ordinary course of their business, regularly perform work, not limited to appraisals for the donor or for related parties.
  4. In instances where the appraisal is not for purposes of charitable donation or probate/estate tax purposes, the appraiser must not have a prospective or future in the property, either as a purchaser, or as a liquidator or auctioneer.

“Wait a minute,” you say: major New York auction houses as well as regional and local auctions houses and household liquidators and galleries  or shop owners regularly violate these rules by appraising property which they will buy, or which they are designated to sell.

In fact these are not appraisals at all, but merely the estimate of what the specific liquidator,  auctioneer, or dealer thinks they can get for the property in question, without regard to fair market value in the highest and best market in which the property could be sold. In these instances the “appraiser” is not acting independently and without bias; instead the appraiser is acting in a situation in which bias against the interests of the client is virtually assured.

Selecting a Certified Professional Appraiser whose independence is guaranteed by the canons of ethics of their organization is your assurance of a truthful, accurate, and reliable valuation. The appraisals produced by these organizations are certified by the organization itself. The best any other appraiser can offer is a self-certified document in which they affirm that they have behaved professionally.

{ This is the first in a series of articles dealing with appraisal issues, including exploration of the various types of appraisals, and the situations in which appraisals are necessary or desirable}