Calif yanks appraiser license from North Coast vineyard & wine property broker over misconduct accusations

Christopher Blakeslee, owner of Wine Property Consulting | Blakeslee Land Services in Petaluma, has lost his California appraiser’s license following scores of improper appraisal accusations lodged against him by the California Bureau of Real Estate Appraisers.

Blakeslee surrendered his California license on Aug. 4, 2016.

The surrender was part of a stipulated agreement to settle an investigation by the California Bureau of Real Estate Appraisers (BREA) and subsequent legal action by the State Attorney General.

The two agencies accused Blakeslee of more than 50  violations of  the Uniform Standards of Professional Appraisal Practice (USPAP) fouund in Title 10 of the California Code of Regulations.

USPAP and other appraisal regulations and licensing were enacted as reactions to real estate valuation irregularities that contributed to the 1980s savings and loan debacle and the recent real estate meltdown which helped drive the Great Recession.

For more information on appraiser regulation, please see: “Why license appraisers? Who needs ’em? Who regulates ’em?” 

Two appraisals of a Vallejo property at issue

According to the BREA accusation, the regulatory action involves, two appraisals — dated  Jan. 27, 2015, and  May 4, 2015 — of  property at 815 Riverway, in Vallejo, CA.

The property, according to the BREA accusation, “consists of 35 acres of vacant land next to the Napa River, and is an undeveloped combination of wetlands, tidal marsh and uplands. It is not served by municipal utilities and, due to its location, it is under the permitting jurisdiction of the San Francisco Bay Conservation and Development Commission, the U.S. Army Corps of Engineers, and the U.S. Fish and Wildlife Service, inter alia.”

The Jan. 27, 2015 appraisal listed an opinion of value of $35 million, with a highest and best use as “mixed use commercial, retail, residential and water oriented development.”

The May 4, 2015 appraisal report valued the property at $8.3 million with a highest and best use of “home/winery, vineyard, and mitigation land.”

According to the Solano County Recorder, the land has a total assessed value of $221,092. The most recent sale (according to multiple realty sites) was for $86,000 (Aug 1, 2014). It sold for $175,000 in 2001.

The land has passed through a series of mostly LLCs and is currently owned by Safe Swap LLC of Palm Desert, CA.

In one of its many charges of impropriety, the BREA accused Blakeslee of failing to find, report and analyze those sales when he created his valuations.

Extensive list of allegations

The BREA accusation contained an extensive list of at least 57 allegations pertaining to the two appraisals. Some of the charges are common to both appraisals while others are unique to one appraisal or the other.

Among BREA’s accusations was the contention that Blakeslee “failed to be aware of, understand and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal.”

As a result, his “conclusion of highest and best use was not supported as legally permissible, physically possible, and financially feasible.”

Among other accusations, the BREA charged that Blakeslee:

• “Misleadingly labeled the report as a ‘Consulting Letter on Valuation’ when, in fact, it was an appraisal.” (Editor’s note: The BREA says any opinion of a value — even verbal — is an appraisal, including Broker Price Opinions.)
• “Communicated assignment results with the intent to mislead and communicated a report that was known to him to be misleading.”
• “Knowingly failed to report or analyze the prior transfer of the subject property in August, 2014, and failed to collect, verify, analyze or report information regarding prior listings of the subject property.”
• “Developed and reported a Sales Comparison Approach which was not credible and was misleading.”
•  “Relied on unverified and unsuccessful offers to purchase the subject.”
• “Knowingly failed to report or analyze the prior transfer of the subject property in August, 2014, and failed to collect, verify, analyze or report information regarding prior listings of the subject property.”
• “Failed to develop and report a credible conclusion of highest and best use… in that he failed to consider land use regulations and other physical and legal characteristics of the subject property including access, topography, zoning, permitting, authority, utilities, and title.”
• “Did not provide sufficient information to enable the intended users of the appraisal to understand the report properly.”

A complete list of the BREA’s charges can be found in the formal accusation which are extracted and summarized (minus legal citations) at the end of this article.

License surrender settled before trial

Blakeslee’s license surrender came as part of a stipulated settlement that averted a trial. He is eligible to re-apply for a license on Aug. 4 of 2017. The stipulation would require the repayment of investigation costs of $26,340.59 and a $10,000 fine.

When contacted by Wine Industry Insight, Blakeslee had no comment on the loss of his license nor on any plans to re-apply.

Accusation summaries

Readers are directed to the formal accusation for full details. The bulleted summaries below are extracted from that formal documents and — to facilitate brevity and readability — are presented here minus citations to specific USPAP sections and other legal verbiage

FIRST CAUSE
(January 27,2015 Appraisal of 815 Riverway, Vallejo, California)

Respondent [Blakeslee]:

1. Misleadingly labeled the report as a “Consulting Letter on Valuation” when, in fact, it was an appraisal;
2. Communicated assignment results with the intent to mislead and communicated a report that was known to him to be misleading;
3. Did not identify or prominently state the appraisal reporting option used;
4. Did not retain documentation in his work file sufficient to produce an appraisal report in that he failed to produce any documentation for seven comparable properties utilized in the sales comparison approach to value;
5. Communicated a misleading report when he failed to satisfy minimum requirements for use of an Extraordinary Assumption;
6. Failed to state the effective date of the appraisal when he variously stated it as November 27, 2014, January 27, 2015, and January 27, 2014;
7. Failed to provide an estimate of exposure time;
8. Failed to identify the relevant subject property characteristics;
9. Failed to identify the subject’s limited access easement which is substandard for virtually any development;
10. Failed to identify potential topographic impediments to development such as wetlands, soils, and contamination;
11. Failed to identify the subject general plan designation of U-1 or to analyze how that designation would affect possible permit approvals for the subject;
12. Failed to identify other permitting agencies with jurisdiction over development of the subject;
13. Failed to identify availability and/or cost to extend municipal utilities to the subject;
14. Failed to identify adverse claims on title to the subject;
15. Failed to develop and report a credible conclusion of highest and best use … in that he failed to consider land use regulations and other physical and legal characteristics of the subject property including access, topography, zoning, permitting, authority, utilities, and title;
16. Respondent’s conclusion of highest and best use was not supported as legally permissible, physically possible, and financially feasible;
17. Failed to determine or perform a scope of work necessary to produce credible assignment results. The extent to which Respondent failed to research of identify relevant subject property characteristics, and his reliance upon the owner as his sole source of subject data, resulted in an appraisal that was not credible;
18. Knowingly failed to report or analyze the prior transfer of the subject property in August, 2014, and failed to collect, verify, analyze or report information regarding prior listings of the subject property;
19. Developed and reported a Sales Comparison Approach which was not credible and was misleading
20. Relied on unverified and unsuccessful offers to purchase the subject
21. Failed to adequately analyze sales of comparable properties and misrepresented differences in physical and economic characteristics of the comparable sales;
22. Relied on sales which were not actual sales but were presented as such
23. Misapplied the allocation method of estimating site value and applied a ratio of 30% of development cost as land value without any support for that ratio or any actual sale price to allocate;
24. Made numerous errors in reporting physical characteristics of the comparable sales, and mistakenly reported the sale price, site size, and clean up costs of the former General Mills Flour Mill sale  property in Vallejo;
25. Failed to be aware of, understand and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal;
26. Committed substantial errors of omission or commission that significantly affected the appraisal,
27. Set forth the appraisal in a manner that was misleading;
28. Did not provide sufficient information to enable the intended users of the appraisal to understand the report properly.

SECOND CAUSE FOR DISCIPLINE
(May 4, 2015 Appraisal of 815 Riverway, Vallejo, California)

Respondent [Blakeslee]:

1. Misleadingly labeled the report as a “Consulting Letter on Valuation” when, in fact, it was an appraisal;
2. Communicated assignment results with the intent to mislead and communicated a report that was known to him to be misleading;
3. Failed to include a signed certification with the appraisal report;
4. Failed to disclose prior services regarding the subject;
5. Did not identify or prominently state the appraisal reporting option used;
6. Failed to establish that his Extraordinary Assumptions had a reasonable basis and were likely to occur, and inappropriately assumed a unit value for a portion of the subject, resulting in analysis of the subject’s value that was not credible;
7. Failed to provide an estimate of exposure time, despite including exposure time in his definition of market value;
8. Failed to identify the relevant subject property characteristics;
9. Failed to identify the subject’s limited access easement which is substandard for
10. virtually any development;
11. Failed to identify potential topographic impediments to development such as wetlands, soils, climate, and contamination;
12. Failed to identify availability and/or cost to extend municipal utilities to the subject;
13. Failed to identify adverse claims on title to the subject;
14. Failed to develop and report a credible conclusion of highest and best use in that he failed to consider physical and legal characteristics of the subject property including access, topography, climate, utilities, and title;
15. Respondent’s conclusion of highest and best use was not supported as legally permissible, physically possible, and financially feasible;
16. Failed to determine or perform a scope of work necessary to produce credible assignment results;
17. The extent to which Respondent failed to research or identify relevant subject property characteristics, and his reliance upon the owner as his sole source of subject data, resulted in an appraisal that was not credible;
18. Developed and reported a Sales Comparison Approach which was not credible and was misleading;
19. Failed to collect, verify or analyze any comparable sales data, other than the one pending sale of a dissimilar property;
20. Relied on generic, broad market data which were not actual sales and which generic data did not reflect the subject’s physical, legal, and economic characteristics;
21. Added together the component values of the subject property without analyzing the effect on value, if any, of the assemblage;
22. Assumed a unit value of $100,000.00 per acre for 21 of the subject areas [Editor’s note: This may be a typo in accusation? Most likely “acres” instead of “areas”] as mitigation land, instead of estimating a unit value for that portion of the subject;
23. Failed to analyze and reconcile the quality and quantity of data available for the Sales Comparison Approach;
24. Failed to be aware of, understand and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal;
25. Committed substantial errors of omission or commission that significantly affected the appraisal;
26. Set forth the appraisal in a manner that was misleading;
27. Did not provide sufficient information to enable the intended users of the appraisal to understand the report properly.

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