Limitations for Damages Against Appraisers
Why would any damages against an appraiser be more than the actual fee paid to the appraiser?
House Bill 53 has been introduced into the 2024 Virginia General Assembly, directly impacting Virginia Real Estate Appraisers. The legislation introduced by R. Lee Ware places a statute of limitations for damages against appraisers and appraisal management companies at 5 years.
SUMMARY AS INTRODUCED:
Actions against real estate appraisers or appraisal management companies; statute of limitations. Provides that no action for damages or other relief alleging that a certified general real estate appraiser, a certified residential real estate appraiser, a licensed residential real estate appraiser, or an appraisal management company committed malpractice or negligence or an error, mistake, omission, or breach in an appraisal or appraisal report, whether based on contract or tort, shall be brought unless it is filed in a court of competent jurisdiction and proper venue within five years from the date of the alleged malpractice, negligence, error, mistake, omission, or breach. The bill provides exceptions for actions alleging fraud and proceedings initiated by the Real Estate Appraiser Board. The bill provides that any action for damages or other relief alleging that a certified general real estate appraiser, a certified residential real estate appraiser, a licensed residential real estate appraiser, or an appraisal management company committed malpractice or negligence or an error, mistake, omission, or breach in an appraisal or appraisal report July 1, 2024, shall be filed in a court of competent jurisdiction and proper venue within two years of the occurrence of such malpractice, negligence, error, mistake, omission, or breach, regardless of the date of discovery of such occurrence.
The full text of the bill can be found here.
A statute of limitation is a good step in the right direction. However, a few questions do come to mind:
- Shouldn’t Virginia law and Virginia Regulations be consistent?
The Department of Professional and Occupational Regulation (DPOR) has a 3-year cap on filing a complaint against any regulant. This is not just the Real Estate Appraiser Board for appraisers and appraisal management companies, but all Boards and regulants under DPOR. Why would any claim for damages be different?
From DPOR’s website:
Time For Filing A Complaint
Any report against a regulant for allegedly violating board statutes or regulations, in order to be investigated, must be made in writing and received by the Department of Professional and Occupational Regulation (DPOR) within three years of the act, omission, or occurrence giving rise to the alleged violation.
In cases where a regulant has materially and willfully misrepresented any information required by statute or regulations to be disclosed to a complainant, and the information so misrepresented is material to the establishment of the alleged violation, the filing may be made at any time within two years after discovery of the misrepresentation.
- Why would any damages against an appraiser be more than the actual fee paid to the appraiser?
The lender, amc and the GSE’s all have their review processes and automated verification. Even in a private appraisal, the courts, IRS and/ or attorneys all have reviewed the appraisal. Most appraisal management company agreements with appraisers limit their liability to the actual fee paid to the appraiser. If all the checks and balances on an appraisal are completed by the client what is the liability to the appraiser?
- Should any liability of the appraiser or amc extend beyond the client or intended users named in the appraisal report?
HB 53 has been prefilled and is scheduled to be first introduced into the Virginia General Assembly on January 10th. A that point, it is likely to be referred to a committee. VaCAP encourages each of you to contact your representatives and share your thoughts on this bill. You can find your representative here.
- It’s Just Responsible Journalism! - February 21, 2024
- Limitations for Damages Against Appraisers - January 9, 2024
- AMC Engagement Letter: Appraisers Do Not Include Your Invoice - July 28, 2023
