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Effective Disclaimer Language

Q: " I was at a CE class the other day and one of the appraisers there was talking about a lawsuit he was in. This guy did the appraisal 8 years ago, when the people who are suing him bought the house. When they listed it for sale, they used the square footage figure that was in the appraisal they got at the time of purchase.

The people that bought the house sued the sellers, claiming the square footage was too high. Now those sellers have sued this appraiser saying they relied on his measurements and it got them sued. This poor guy doesn’t have his report, or his work file’ anymore, so he doesn’t know if he made a mistake, or not.

I told them that I don’t have to worry about getting sued. In every report I prepare it says, “ANYONE OTHER THAN THE CLIENT WHO RELIES ON THIS REPORT FOR ANY REASON IS DOING SO AT HIS/HER OWN RISK”.

Do you think this language protects me? "

A: I always encourage appraisers to put disclaimer language in their reports, but I have to be honest...there is no language in the world that will protect you from being sued. You can get sued anytime, by anyone, for anything. It is my hope that well drafted disclaimer language will help your attorney get you out of a lawsuit faster than if no such language was in your report.

I don’t really understand what you mean when you saying anyone relying on your report does so at their own risk. If I don’t understand this, I question whether a judge will, either. I understand your intent but there is a better way to communicate it. Again, I applaud, and encourage what you are trying to do, but I think there is other language you might consider that would provide you with greater protection. How about something like:

“The appraiser will have no legal liability to any third party who claims to have relied upon the report, in whole or in part, for any purpose, whatsoever, unless such reliance was agreed to, in advance, by the appraiser, in writing.”

Another suggestion is:

“This appraisal is intended for the sole and exclusive use of the appraiser's client to which this report is addressed. No third party is entitled to, or permitted to, rely on this report, for any reason, irrespective of whether or not said third party might have paid for the report, directly, or indirectly.”

Please understand, there is no “magic” language I could suggest that will keep you from getting sued, but including strong disclaimer language, specific to each assignment, and to each report, gives your defense counsel a lot to work with.

Would you like Claudia to manage your liability concerns?