Our president, Robert C. Wiley, has over 40 years of experience providing Property & Casualty and Accident & Health insurance to national associations and their members. Website By A new appellate decision came out discussing the statute of limitations associated with a negligence claim against a property appraiserConsider this example: An appraiser negligently appraises a $100,000 house at $150,000. The answer to that question is almost always "probably not." The court then addressed the question of when does that period begin to run? Florida law is always changing. Because there are so many permutations which vary from state-to-state and which also depend on the exact type of claim and whether a discovery rule is applied, we have prepared a 50-state chart to answer this question. Insurance programs & surety bonds That date was within three years of when the borrower filed its lawsuit. To help make that more understandable, here is an example: the relevant statute of limitations period for negligence in California is 2 years. Buyers and sellers rely on the appraised value to confirm a fair price for the property. Because the bank filed its complaint in January 2007, the bank's lawsuit was filed one year too late and the negligence claim was properly dismissed. Litigation trends and effective defense advice The court further stated that the "plaintiff was not required to take upon himself the tasks he reasonably believed [the appraisal firm] had performed." We build a partnership with our clients not only offering insurance protection but also educating them in risk management and loss prevention via articles, Claim Alerts and Loss Prevention Seminars. A suit from a disgruntled borrower occupies a gray area. Also, the appraiser may overestimate the cost and income capitalization approaches when valuing property or not give those methods much weight at all in determining value.If you feel that your home was improperly valued because of any of these reasons or any other reason, you should talk to an experienced real estate attorney who can help to recover any damages that you may have suffered.If you would think you are the victim of appraisal fraud or would like more information about appraiser negligence contact Larry today. With regard to professional negligence claims, courts in a majority of states apply some version of what is called the "discovery rule" to determine when the applicable period begins to run. A new appellate decision came out discussing the statute of limitations associated with a negligence claim against a property appraiser.. Desktop appraisals use the data available to the appraiser via third-party resources. This is where an appraiser's hopes for an easy win based on the statute of limitations are often crushed. (i.e., the bank "blacklisted" them) and advised them of that fact. Our advice on this issue is simple: keep your workfile for seven to eight years (unless a longer period is required under USPAP's special requirement for assignments where the appraiser has provided testimony). Q&A Series with Claudia Gaglione In this case, Llano Financing Group, LLC v.Petit, 42 Fla. L. Weekly D2071a (Fla. 1 st DCA 2017), the court held that the four year statute of limitations for negligence claims commences when the lender relied on the appraisal to fund the loan. For example, the appraiser may use outdated sales comparisons or improperly adjust for the value of the subject property (for items such as location, square footage, and property age) to establish value. This is why we see so many claims about appraisals that are now 7 and 8 years old and why they are not easily dismissed. In fact, the bank's vice-president would later testify that he "did not like these appraisals from the start," and the president of the bank admitted in his testimony that even "the average person" could conclude that the appraisals overvalued the properties just from looking at the photographs of the subject and comparable properties. At that point, the lender looked at the appraisal in the loan file and concluded the appraiser made an error. The discussion that follows should help you understand why. There’s no interior inspection, no exterior inspection, and no measuring. Make sure this does not happen to you. Regardless of USPAP's minimum recordkeeping requirement, appraisers are advised to retain workfiles for 7-8 years as the minimum recordkeeping requirements are not synonymous with state specific statutes of limitations regarding claims against appraisers. In 2013, many lawsuits against both residential and commercial appraisers continue to relate to appraisals performed years ago at the peak of the real estate price bubble, 2005 to mid-2008. With repair costs estimated in the hundreds of thousands of dollars, the plaintiff determined that the property was essentially worthless and stopped making payments on his loan. The lender blamed the appraiser for its financial losses on the loans but its lawyers did not bother to file a lawsuit until 2008 – seven years after the first appraisal. The bank filed a lawsuit against the appraisers in January 2007. . All rights reserved.LIA Administrators & Insurance Services is a national insurance administrator, specializing in Errors and Omissions Insurance for Real Estate Appraisers since 1978.


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