Claim Alerts

Claim Alert Newsletters

Along with our national claims counsel, we analyze appraiser claim files to identify litigation trends and effective defenses. Our findings are published in periodic Claim Alert Bulletins. We also contribute articles on loss prevention to several appraiser publications, including the Appraisal Institute's magazine, Valuation Insights & Perspectives.

Our Claim Alert bulletins provide information about litigation trends and effective defense advice. Following is a partial list of Claim Alerts we began publishing in 1992. Although some of the topics may seem dated, the concept is still applicable and will provide useful general information, beneficial to your appraisal practice.

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Claim Alert Bulletins

Q3 2024

Construction Progress Inspection Reports: Claims Involving ADUs and Remodels

After several years with no activity in this area, recently we have seen a resurgence of claims against appraisers arising from their preparation of construction progress inspection...
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Q3 2024

Avoiding Court: A Common Sentiment Among Appraisers

Many appraisers are reluctant to testify in court. This hesitation might stem from a past negative experience or hearing about someone else’s difficulties...
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Q2 2024

Easements: Issues and Appraiser Liability

In the past year we have encountered several claims against appraisers involving easements, regardless of whether the easement is recorded or not...
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Q4 2023

Don’t Make the Same Mistake Twice

In the world of real estate appraisals, a cardinal rule should always be "Don't Make the Same Mistake Twice!" Unfortunately, there have been recent incidents that...
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Q4 2023

Septic Tanks...Again!!

It may seem like we talk about septic tanks quite frequently, and this is due to the persistent occurrence of claims stemming from septic tank problems.
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Q3 2023

Risks of Expert Work

Appraisers experiencing a slowdown of their workload may consider doing expert work. Some appraisers believe that taking on expert assignments will protect them from ...
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Q2 2023

Vacant Land: Make Sure You are Appraising the Right Property

Imagine that you have accepted an assignment to appraise 15 acres of vacant land located in a remote area. ...
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Q2 2023

Limitation of Liability 2023 Update

This topic has been addressed numerous times, but there is a reason why it is important enough to ...
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Q2 2023

Trainees Must Take Responsibility for Their Training

Trainees need to take responsibility for their own future and ensure they understand the requirements for both ...
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Q1 2023

Failure to Inspect

It is hard to believe that we must address this topic, but the issue has come up far too many times both in the context of claims and in...
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Q4 2022

Intended Use & Intended User

It is true that identifying the “Intended User” and the “Intended Use” of the appraisal assignment are USPAP requirements, but it really goes beyond that. ...
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Q3 2022

The Continuing Problem with Septic Tanks

Rural properties and acreage are rarely serviced by public sewers. In many cases, the waste disposal system on site is noted as being a septic system. Unfortunately, problems with...
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Q3 2022

The Importance Of A Work File

As a defense attorney, I consistently deal with professionals. One day we might be dealing with a claim that has been made, while the next day we may be discussing steps that can be taken to avoid a claim....
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Q3 2022

When It Is Business as Usual

We have seen several rural appraiser insureds receive discipline from their state licensing boards for their failure to account for the fact that commercial operations were taking place on rural properties...
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Q2 2022

2022 Update: Where’s the Water?

We continue to see claims alleging that the rural property appraiser failed to adequately identify or report details surrounding a water source. In one claim...
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Q2 2022

Limiting Liability to Third Parties

The subject of this article has been addressed multiple times in prior writings; however, it remains a topic that truly is important enough to highlight once more.
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Q2 2022

First Notice of Claim: Some Do's & Don'ts

Many appraisers do not realize that claims and potential claims can begin in numerous ways. A claim may not always start with a...
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Q2 2022

Engagement Letters

Not just a quaint display of business etiquette, the Engagement Letter can be an effective tool to protect your liability exposure. Many claims against real estate appraisers arise because of misunderstandings between the ...
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Q1 2022

Who Said I Agreed To Be An Expert?

Appraisers continue to be confused about whether or not they have agreed to act as an expert witness in litigation situations. Over the course of the past few months, we have seen several...
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Q4 2021

Think carefully before signing a Records Affidavit

What happens when the documents requested in the subpoena are more than 5 years old and the appraiser has already destroyed ...
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Q4 2021

Sewer versus Septic: Lesson Learned

One of the most common claims made against appraisers continues to be the “sewer versus septic” claim. This claim arises when the appraisal states ...
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Q3 2021

Threatened with a Lawsuit?

At some point in your appraisal career, someone will probably accuse you of making an error in an appraisal report. Perhaps you will receive a nasty phone call from a property owner, or an attorney may send you a threatening ...
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2021

USING TRAINEES - The Safe Way

Lower interest rates have generated so much work that professional appraisers everywhere are struggling to keep up. Many appraisers choose to hire ...
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2021

Where's the Water?

In the past few years, we have seen numerous claims alleging that the rural property appraiser failed to adequately identify or report details surrounding a water source. In one claim, the report said the property was...
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2020-21

SMALL VICTORIES Series

Even small wins are celebrated!
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2020-21

Appraisal Report Language is Key

Carefully crafted language, both specific and standard, is key in appraisal reports. One insured appraiser recently avoided a potentially...
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Oct 2020

DISCIPLINARY PROCEEDINGS DO’S & DON’TS

Many appraisers have had to defend themselves in a disciplinary proceeding. That should come as no surprise. For the past several years, disciplinary proceedings have accounted for about 70% of all the “claims” reported by LIA-insured appraisers....
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April 2020

Limiting Liability for Exterior Only and Desktop Appraisals

On March 23, 2020 Fannie Mae issued a Modified Set of Instructions, Scope of Work, Statement of Assumptions and Limiting Conditions, and Certification for Desktop Appraisals and for Appraisals with Exterior-Only Inspection. (Forms 1004, 1073, 1025, 1004C, 2090, 2055, 1075, 2095). ...
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March 2020

"Double Jeopardy" Appraisals the Second Time Around

It is not unusual for an appraiser to be asked to appraise the same property on more than one occasion. Sometimes, it is a coincidence. The client may have no idea ...
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Aug 2019

Expert Witness Or Fact Witness? (pt. 2)

We have recently received several inquiries from appraisers that raise concerns. In general, the appraisers do not understand the difference ....
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Aug 2019

Expert Witness Or Fact Witness? (pt. 1)

We have recently received several inquiries from appraisers that raise concerns. In general, the appraisers do not understand the difference ....
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Sept 2017

Appraising After a Natural Disaster

Natural disasters are an unfortunate fact of life. Our country continuously deals with floods, hurricanes, tornadoes, wildfires and earthquakes. Many appraisers are.....
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March 2016

10 Tips for Landing and performing work as an expert witness appraiser

Litigation consulting and expert witness work is a rewarding area of practice for many appraisers. The work often is intellectually stimulating and well-compensated — indeed, the hourly rates for highly regarded expert witness appraisers regularly top the rates charged by the attorneys with whom they work....
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August 2013

THE STATUTE OF LIMITATIONS FOR A CLAIM AGAINST AN APPRAISER

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. These lawsuits are filed by borrowers, lenders, investors or the FDIC and typically allege...
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March 2013

Revisiting The Fannie Mae/Freddie Mac 2005 URAR Form Ambiguities and Liabilities

It has been eight years since the URAR form was revised. From 2005 to mid-2008, the real estate market experienced a boom and a bust the likes of which we have never seen before, and we are finally seeing a slow recovery. Also during this period, the economic recession...
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October 2011

Claim Alert: Why Do Claims Get Settled?

When an appraiser reports a new claim, one of the first questions he or she asks is, "What happens now?" After we explain how the litigation will be handled, and what will be expected of the appraiser during the course of the lawsuit, we inevitably get into a discussion...
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January 2011

Claim Alert: Three easy steps to reduce your liability

It has been eight years since the URAR form was revised. From 2005 to mid-2008, the real estate market experienced a boom and a bust the likes of which we have never seen before, and we are finally seeing a slow recovery. Also during this period, the economic recession...
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August 2009

The Appraisal Workfile: The Best Tool You Have to Aid in Your Own Defense

This Claim Alert discusses something integral to every commercial or residential real estate appraiser: workfiles. The workfile can be a crucial benefit to appraisers defending themselves against legal or administrative allegations. Remember, most appraiser E&O claims are made 18 months to ...
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September 2008

Avoiding Appraisal Fraud: Appraising Your Client

The Mortgage fraud and real estate fraud articles have become regular features in news headlines. There are blogs and stories galore about the latest fraud schemes and those implicated. Often, it would be noted that a real estate appraiser somehow contributed to the fraudulent enterprise and was ...
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October 2007

Appraising After a Natural Disaster

Natural disasters are a fact of life. California experienced flooding and mudslides in January 2005, and widespread wildfires in October 2007; Louisiana is still trying to recover from the devastating floods caused by hurricane Katrina in 2005 ...
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February 2007

Washington State Appraisers Beware!

On January 24, 2007, we notified you that a new Washington law, effective January 1, 2007, under the Mortgage Broker Practices Act began requiring that all residential loan originators be licensed, unless employed by ...
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July 2006

Identity Theft, Forgery & Other "Altered" States

Identity theft is currently our nation`s fastest growing crime. According to studies conducted in July 2003, approximately 7 million people became victims of identity theft in the prior 12 months; that equals: 19,178 victims per day or 799 victims per hour. ...
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May 2006

The Cost Approach: To Do or Not To Do

The growing pains of using the new Fannie Mae forms are continuing; an issue that has developed is whether appraisers should continue to complete the Cost Approach to Value, even in circumstances where it may not be reliable. The Cost Approach section is ...
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October 2005

Construction Progress Reports: Don't get hammered

It is commonplace for appraisers to receive construction progress report assignments from lenders. Lenders use these reports in making loan disbursements, also known as construction draws. Suits against appraisers involving construction progress inspections ...
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November 2005

New Fannie Mae / Freddie Mac URAR Form - Ambiguities and Liabilities

On March 24, 2005 Fannie Mae released final modifications to eleven report forms in their Announcement 05-02. Their primary objectives with the modifications were to communicate their expectations for the property valuation and appraisal reporting process, ...
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April 2004

PHOTOS: The Good, the Bad and the Ugly

Back in the days when we used Polaroids, it was understandable that appraisers took only the photos they were requested to take: back, front and street scene. However, with the advent of small cameras, one-hour photo service and digital photography, ...
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October 2004

VACANT LAND: A Nightmare for an Appraiser

For many appraisers, the biggest nightmare of their career begins when someone requests a vacant land appraisal. The problem is that the appraiser does not even know the nightmare has begun until the appraisal is complete and the claim served. ...
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February 2003

Licensing Board Administrative Notice: Your immediate attention is required!

Professional There has been a marked increase in reported complaints against appraisers to state licensing boards in the past few years. A complaint that generates an investigation can happen to anyone. Regardless of what starts the ...
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April 2002

Mold: The Hidden Menace

It is virtually impossible to read a magazine or newspaper these days and not come across some article dealing with the dangers of toxic mold. Whether you believe mold is an environmental hazard or you believe that all the mold news ...
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December 2002

Predatory Lending

Professional appraisers treasure their relationships with reputable lenders who serve clients responsibly over the years. These lenders work with credit worthy consumers in financing a new home purchase, refinancing, or home equity ...
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June 2001

Flipping: Dangerous Maneuvers for Appraisers

You may already be aware of one of the fastest-growing areas of appraiser litigation today—real estate flipping schemes. Armed with false paperwork and deceptive sales pitches, flippers are exploiting some of the ...
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April 2001

Appraiser or Home Inspector?

The blurring of lines between an appraisal inspection and a home inspection is continuing to place pressure on appraisers and raise many questions. More and more appraisers are being retained to prepare an appraisal ...
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November 2001

Limiting Liabilities to Third Parties

Real Estate Appraisers continue to ask how they can limit their risk of liability after their appraisal report has been sent to the client. This question is too important to be considered after-the-fact. Liability may be determined by...
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September 2000

E-Appraisal Technology: High Tech or High Risk?

Emerging trends in appraiser technology present many new and exciting opportunities for appraisers in today`s Internet community. Tools such as on-line appraiser directories, Web-based appraisals, data resources, and Automated Valuation ...
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October 1999

Managing Exposure in the Face of HUD Reforms

The Department of Housing and Urban Development ("HUD") indicates that its newly implemented Homebuyer Protection Plan is designed to increase consumer confidence by re-vamping the FHA appraisal process. Moreover, ...
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October 1998

Real Estate Scams: Don't Be the Next Victim!

Sound too good to be true? To most of us, this newspaper ad is a sure sign of a real estate scam. But to the unsophisticated, first-time homebuyer, it seems more like a dream come true. When these types of scams are eventually uncovered ...
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July 1995

The Defense Calls for...Your Appraisal Report

Does a third party have a right to rely on your appraisal report? Unfortunately, it is not a question that can be answered with a simple "Yes" or "No." Even if the claim against you is unjustified, it may still take considerable time...
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September 1994

Signing an Employment Agreement

We all know that it is wise to read the "fine print." Knowing what to expect of a product or service has become something of an inalienable right, whether it is the ingredients of a bag of potato chips or the conditions ...
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March 1994

Appraising After an Earthquake

Does an appraiser face any special liability exposure in the aftermath of an earthquake? Experiencing a major earthquake can be a traumatic ordeal, but unfortunately, appraisers may feel the effects long after the last aftershock. Following the Northridge Earthquake on January 17, 1994, appraisers in Southern California were being asked by many lenders to re-inspect and re-certify the value of properties first appraised before the earthquake. Fannie Mae lenders...
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1991

Limiting Conditions: Are they really effective in protecting against lawsuits?

Many appraisers assume that the use of limiting conditions will protect them from lawsuits. This is a dangerous presumption. Courts often view the standard clauses as meaningless language that is buried in the contract and not approved...
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