As a professional real estate appraiser, you realize the importance of your role in the real estate market. Regardless of size of property or location, your knowledge and expertise is highly regarded. You are also relied upon by many, from lenders and real estate agents to buyers and sellers. We understand your goal is their satisfaction. But with so many clients, properties and details it can be far too easy for something to slip through the cracks. As professionals, Trigon also understands that more times than not, a problem can arise that will lead to litigation.
Our current real estate market has caused an increase in activity. This includes not only Real Estate Appraisers but Agents, Brokers, Mortgage Specialists and Home Inspectors. The number of Buyers and Sellers has also increased. So have their disputes. A Growing Trend: File suit against all who were involved in the transaction with the most likely causes of actions being misrepresentation; fraudulent, innocent or negligent. With regards to claims for professional negligence and the Statute of Limitations for appraisers, many states use the "discovery rule". This rule varies from state to state but the effect of it is that the time period will not start until the party filing the lawsuit against an appraiser should have discovered the problem with the appraisal.
An appraisal was made and an estate sized home and purchased in 2009. In 2012, the home owner began having problems with the property’s waste disposal system. A contractor determined that the existing septic system was not operable and had not been operable since before 2005. The county public health department prohibited any further occupancy of the property until installation of an approved functional septic system. With repair costs estimated in the hundreds of thousands of dollars, the plaintiff determined that the property was worthless and stopped making payments on his loan. The borrower sued the appraisal firm for negligent misrepresentation, alleging that its appraiser stated that the property was served by a working septic system and failed to identify or report the actual deficiency. The lawsuit was filed in June 2015, more than six years after the original appraisal.
With the dramatic increase in litigation, will you be prepared when one or more of your clients is unhappy or believes you are at fault.
A lawsuit can have the single greatest impact on your current and future earnings. The effects are long lasting. Even if allegations are found to be groundless, thousands of dollars may be needed to defend the lawsuit which can bankrupt a smaller company or individual.
Whether you are new to the industry or have been in business for years, you need to be prepared and protect yourself.
Let Trigon help protect you and your company’s assets and reputation with an Errors and Omissions policy today.