Association of Real Estate Appraisers

CAREA General Membership Meeting 9-19-2012

Real Estate Appraisal Liability Issues Presented byDawn E. Mitzner & Valerie A. Garcia, Kennedy Childs P.C.

CAREA will continue to support CCA with funds in order to keep Gayle Berry on retainer.

10/15/2012 USPAP update meeting! Our facility will be provided free of charge, therefore the charge for the update class is going to be enough to just cover the costs.  There will be no profit made from the class.  The cost to be determined by the number of attendees.  It is crucial that Bonnie be compensated and until the number of attendees is finalized there is no way to establish a price per attendee.

Appraiser Liability issues with Dawn Mitzner, Esq. and Valerie Garcia, Esq.

  • Civil Liability Issues:
  • *Borrowers
  • *Sellers
  • *Lenders
  • *Real Estate Agents or Brokers

These parties may sue you even though they are not your client.

Types of Litigation

  • *Over-valuation
  • *Under-valuation
  • *Failure to identify property conditions

Legal Causes of Action

  • Negligence
  • Breach of contract
  • False Representation
  • Non-disclosure
  • Colorado Consumer Protection Act

What can we do to minimize our risK?

  • Make sure there are non-boilerplate comments that are specific to the job.
  • Discuss and disclose with the homeowner
  • Save all documentation in a work file
  • Use an engagement letter that clearly outlines your scope of work
  • Keep files for at least 5 years. Keep your photos.

What to do if you are sued?

  • Lawsuit starts with the filing of a complaint
  • Do NOT ignore it
  • Do NOT admit Liability
  • Notify your insurance carrier
  • Do your duty to preserve evidence-paper and electronic
  • Seek Legal Counsel Promptly

Grounds for removal from appraisal roster

  • Significant deficiencies in appraisal
  • Losing standing as a licensed appraiser due to disciplinary action
  • Prosecution for fraud
  • Failure to preform
  • Failure to comply
  • Issuance of final debarment, suspension or limited denial of participation
  • Failure to maintain eligibility

It is unlawful to:

  • Preform an appraisal without a license
  • Accept a fee for a job contingent on a predetermined value

Anyone can complain about an appraiser on the DORA website.  Minimal information is needed to get the ball rolling.  Once the form has been completed and submitted it can cause major damage to the appraiser’s life.   The first line of defense is your insurance company and a qualified legal specialist.


  • Take lots and lots of photos
  • Have complete copies of the MLS records
  • Keep notes of all the people you talk to: realtors, developers, public officials, etc.
  • Make sure you know your USPAP!
  • Keep a network of appraisers you can bounce ideas off of and look to for guidance.

DORA Practice Tips:

  • Verify your data!
  • Speak to agents, email them as well
  • Make sure to support and analyze highest and best use
  • Have support for your adjustments
  • Have support for land values and cost figures in the Cost Approach


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