Indemnity Clauses – Redux

Dave Towne

Dave Towne

Certified Residential RE Appraiser at Towne Appraisals
AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003.
Dave Towne on e-AppraisersDirectory.com
Dave Towne

Latest posts by Dave Towne (see all)

Indemnity Clauses... Either Sign, or Get Put Out to Pasture - Appraisers BlogsIt’s been an interesting ride down the fearfulness side of many appraisers since last week’s essay I wrote about Indemnity Clauses.

But I’ve also received praise from some of the best well-known people in this industry who understood the position I took, and complemented me for presenting the info. That means far more than the diatribes I get from folks who shake in their boots and don’t bother to fully read what is presented.

As I wrote to someone last week, what I should have included in my essay, and will do so now is that if you can’t (or won’t try to) understand any kind of employment agreement presented to you by an AMC, a direct lender, or even another larger appraisal firm who wants your service for a special project, then just send the agreement to your E&O provider and ask for advice from them. If they won’t do that for you, then you’ll have to hire an attorney who specializes in labor law and understands legalize.

I really love the negative responses from appraisers who say “I will never sign an Indemnity Clause,” or “I was told that Indemnity Clauses are dangerous,”, or present to me an article written 24 years ago that warned about the extremely hazardous Indemnity Clauses that existed at the time, but have been vastly changed and modified to comply with current law since then.

Another well-known Chief Counsel for an E&O provider wrote an essay last year describing what to look for in Indemnity Clauses, including adverse issues. You need to fully read his presentation to know that Indemnity Clauses are not, by themselves, bad karma, to be avoided at all costs. These are common in all types of employment agreements these days, so you’d better get used to seeing them.

Know this: some are written better, or more simply, than others filled with Harvard Law School legalize.

Absolutely, early versions of Indemnity Clauses within employment agreements demanded that the appraiser was fully responsible to defend everyone else connected to a particular assignment, regardless of who did what. Those kinds of Indemnity Clauses have been judged faulty and are basically illegal now. Some states have laws saying so.

A primary duty of an appraiser is to be a careful and thorough analysist. Analysists capture a wide amount of data from different sources, examine it, codify and comprehend it, and then articulate what was found into a report someone else can use for a decision.

Yet what I’ve found happens so often is appraisers see one word or one sentence (in essays, articles, blog posts, etc.) that triggers a negative reaction, and then fail to fully read and comprehend what was presented, or examine all the data so that a full understanding can be made. Or maybe their line of thinking is stuck in 1994, and have not moved on.

I’ll end by repeating what I wrote above and last week: more and more of our clients are requiring appraisers sign employment agreements with included Indemnity Clauses. It’s the litigious era we live in. You either sign, or get put out to pasture.

If at first you don’t understand what is presented, get a professional to explain in plain language what you are expected to do, and what you will expect from the client. It’s in the employment agreement.

Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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8 Responses

  1. Mike Ford Mike Ford says:

    “I’ll end by repeating what I wrote above and last week: more and more of our clients are requiring appraisers sign employment agreements with included Indemnity Clauses. It’s the litigious era we live in. You either sign, or get put out to pasture.”

    Really? …OR Dave, one can simply get better clients.

    I read the prior article and caught the nuances. Like many other appraisers, I can simply disagree with specific aspects while still understanding them. It doesn’t make me (or others) either fearful or incapable of reading & understanding your post. Nor does it make others that disagreed unrealistic naysayers to be spoken about so disrespectfully.

    Dave, I don’t believe I was particularly negative to to your prior article…but I am to this one. Not for the indemnity clause views, but for the comments like “…diatribes I get from folks who shake in their boots and don’t bother to fully read what is presented.”

    Dave, we both write a lot of articles. Usually we both know what we intended to convey. That doesn’t mean we are always successful at it. When we are not, then the onus is on us-not our readers.

    For my part, I will continue to subscribe to your articles. I think you have a lot to say that is important for us to hear or read as appraisers. Other than blind acceptance of indemnity clauses.

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  2. Dave says:

    I would love our government to make a law creating attorney management companies where lawyers would only get work if they were the cheapest and fastest. They would have to bid low to get the divorce case and be quick about it no matter what. lol. Our country are ran by lawyers and bankers and we appraisers are only ponds.

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  3. Tommy says:

    I won’t sign any agreement that opens me up to more liability, but some appraisers do.

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  4. Eric West says:

    Has anyone contacted their E&O regarding Solidifi’s 19 page employment agreement? Can someone post it here for the rest of us?

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  5. wontobey says:

    Why do appraisers allow amc’s like solidifi to exploit them with these one-sided agreements?

    Don’t sign any one-sided agreements! You should only consider signing cross indemnification clauses aka mutual indemnity clauses where each party agrees to hold harmless the other party.

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  6. Dave Towne says:

    Believe it or not, the Solidifi agreement does protect both them and the appraiser.

    But appraisers need to know that indemnity clauses are everywhere in society nowadays.  They cannot be avoided, except by not signing them…..and in the case of appraisal clients, lose business.

    Just take time to carefully read any new ones you see.  If you have trouble reading silently, and comprehending what is written, read each sentence out loud.  Your understanding will increase.

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  7. Jack Of All Trades says:

    I have a great way to avoid indemnity clauses and that’s to quit working for the pimp AMC’s

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    • Baggins Baggins says:

      By far the majority of all mortgage lending panels whom do not use amc’s, do not make appraisers sign similar agreements.

      Dare you to apply the same terminology to realty agents and tell them because the lender’s amc selected you, they have to incorporate themselves into that agreement.

      Being swindled constantly does not make the swindling moral or justifiable.

       

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Indemnity Clauses – Redux

by Dave Towne time to read: 2 min
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