The Journal is published by the non profit, 501 (3) c Foundation for Appraisal Education. Proceeds from the sale of the Journal go to the foundation to support appraiser education through scholarships and grants. All working on the project, included the editorial staff and all contributors participate without compensation in order to support this worthy cause to advance personal property eduction for appraisers and those in related fields. Since I developed this project in 2007 we have had the pleasure of publishing three well regarded Journals, with over 60 excellent articles written specifically for personal property appraisers. Some authors have contributed in multiple editions, and some in all three editions.
Appraiser Elin Lake-Ewald, Ph.d., ASA, is president of O'Toole-Ewald Art Associates, Inc. Dr. Lake-Ewald states her appraisal firm is the largest in-house independent personal property firm in country with an experienced team of specialist appraisers in the fine and decorative arts. Nationally known for its success in large scale assignments involving extensive collections. Clients include Fortune 500 corporations, museums, insurance companies, law firms, and individual collectors. Damage/loss/fraud report experts.
Dr. Lake-Ewald has been qualified as an expert witness in federal, criminal, state, circuit, bankruptcy and tax courts, testifying in both civil and criminal court cases. Dr. Lake-Ewald is an American Society of Appraisers (ASA) certified senior appraiser; Royal Institution of Chartered Surveyors UK. Dr Lake-Ewald can be reached at info@otoole-ewald.com.
From Original Research and Innovative Appraisals
To order your copy of the Journal, click HERE. For a limited time there is free shipping.Once in a while, and these occasions don’t occur with great frequency, the personal property appraiser is asked to take on an assignment for which there is no precedent, no standards set by USPAP, no guidelines provided by his or her professional association, and very little reference to the subject in other disciplines.
Such a situation arose earlier this year when we were approached by
the director of a trust to provide:
A. fair market value appraisal
B. replacement value appraisal
C. fair market/replacement value leasing fee
Twice before the issue of art leasing had come up in this appraiser’s
experience. The first time the family attorney had advocated for a specific outcome and we declined to pursue it. The second time it was the client, not the attorney, who wanted control of the process and methodology. With such pressure there was no way that a successful outcome could emerge and we declined to pursue it.
This time the task of providing guidance on the issue of art leasing
was possible due to a client with no predisposed agenda who genuinely
wanted the most honest and appropriate resolution. Additionally, the client had respect for the professionalism of the appraiser, and confidence in her ability to develop a coherent and successful methodology in order for an innovative idea to take root in the appraisal field.
It was the function of the appraiser to determine, not only the two
valuations, but also to provide a rationale for the fee to lease these works of art on a six-month and a yearly basis that all participants would agree was applicable. Not only would the executors of the trust have to be convinced, but so would the collector, in whose home the art was displayed. A fee that we ultimately determined to be appropriate must also be sufficient to satisfy Elin Lake-Ewald the members of the trust and at the same time not be considered onerous to the collector.
The subject work was that of twenty paintings, located in a private
home and also in a museum on a loan basis.
The trust owned 95% of the art, and the former owner, in whose home the art was located, owned 5%. The 5% owner had been the original collector of the artworks and, while agreeing to allocation of the shares to the trust, opposed the sale of any of the paintings. The leasing agreement offered the opportunity for the collector to continue to house and display the art, with the trust as beneficiary of the rent.
Initial Analysis
The twenty paintings in the collection were by established American artists. Therefore, the appraisals for both fair market and replacement value presented no obstacle, although the timing of the appraisal followed shortly after a steep decline in the art market, which was reflected in the valuation.
It was the third, and most crucial, component of the assignment that called for a creative approach and, most importantly, original research.
While the tracking of both auction and retail prices is considered straight forward data collection, research is hydra-headed, allowing for source-based research that includes both secondary and tertiary sources. The third type and most attestive of sources – primary – signifies an original
source, that is, a source at the time of or close to an event, such as diaries, historical documents, verified surveys, eye-witness accounts, and interviews. In other words, first hand research. In this instance, that of defining leasing fees, we chose to rely upon surveys and interviews to achieve our goal.
During the analysis of this particular assignment it was our conclusion that original research was required, but there would as well be data collection combined with secondary and tertiary sourcing.
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