USPAP Violations
Q: " A few months ago I got a complaint from the state licensing board. The complaint was made by a seller who claimed the appraisal I prepared for the prospective buyer’s lender had understated value. The seller was annoyed that my appraised value was $11,000 less than his agreed contract price. When I got notice of this complaint I was going through some hard times both at work and at home and did not have the time or energy to devote to this. The investigator sent me a letter that said they thought my report contained several USPAP violations. They proposed that I admit to the violations and pay a fine of $800.00. I signed the form and sent it back with my check, just to be done with the whole thing.
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Today I got a letter in the mail from the seller. He says I admitted to making mistakes in the appraisal so now he wants me to pay him $11,000, saying he had to reduce his selling price because of my appraisal. I don’t want to pay this guy any money and I did not realize there might be consequences if I signed the state board letter. Should I contact the state board and see if I can unwind this in any way so I can fight the board’s findings?
A: Unfortunately, I don’t think the state board will just “unwind” the complaint because you have now changed your mind. I suppose it does not hurt to ask, but don’t get your hopes up. When the board advises that they believe your appraisal contained USPAP violations, you have to take that seriously. I understand that not every appraiser has the financial or emotional fortitude to “fight” the state board, however the board is typically willing to at least consider some suggestions about language to be included with the findings so it will be more beneficial to the appraiser. In many cases the board knows that the complaining party is waiting to see how the investigation unfolds, hoping they can use the resources of the state as support for a claim for damages against the appraiser. Most boards do not want their investigators to be used in that manner. They will work with the appraiser to finalize language that is acceptable to both sides. Since so much time has passed since your matter was resolved I think it is unlikely the board will reopen the investigation to assist you.
There is some good news, however. Your state does have good case law that holds an appraiser owes no duty to a seller. Perhaps if you share that with the seller he will give up on his efforts to try and collect any money from you.