Essential Appraiser Liability Concepts

This course covers essential concepts of appraiser professional liability and basic keys to decreasing liability risk. The course addresses current liability trends and dispels some common myths and misunderstandings. While the course primarily relates to appraisal work for lending, a brief overview is given about liability relating to non-lending work. Interesting lawsuits and claims form the foundation of the presentation.

These are the types of questions answered by this course: Who presents the biggest liability risk to appraisers in relation to appraisals for lending? What do these parties they sue for? What’s the statute of limitations? How is liability risk most effectively reduced? Is there key language that should be considered in reports? Will an LLC protect me from liability? What liability exposures exist for appraisal review work? What does E&O insurance cover?

Course Instructor

The course instructor is attorney Peter Christensen. He the general counsel of LIA Administrators & Insurance Services, which provides professional liability insurance to more than 15,000 appraisers. You’ll be given Peter’s contact information in the course for questions and interaction about the content. You can read more about Peter in the About section of this website.

Synopsis and Learning Objectives

The course is divided into seven chapters. The specific subjects and learning objectives in each chapter are:

Chapter 1: Understanding the Elements of a Legal Claim Against an Appraiser

In this chapter, Peter discusses a claim situation involving an appraiser who wants to sue a review appraiser. The case provides the background for you to:
  • Understand the key legal elements of an appraiser negligence claim.
  • Know the types of parties who most commonly sue appraisers over appraisals for lending.
  • Understand the fuzzy law surrounding the key question of “who can sue an appraiser for negligence?”

Chapter 2: A Real World Liability Claim and Key Language

In this chapter, Peter discusses a lawsuit by a group of commercial property investors in Washington who sued two appraisers and their firm over a failed investment. The objectives are for you to:
  • Understand how the USPAP concepts of intended user and intended use relate to your potential liability.
  • Understand the importance of good intended user and intended use language to control potential liability risk.
  • Be able to develop your own good language relating to intended user and intended use.
  • Be aware additional important language to help decrease your liability risk.
Peter then discusses a “typical” buyer’s remorse case – in which a famed pilot sued several parties over a regrettable commercial property purchase. The situation is used to help you:
  • Reinforce your knowledge about why borrowers/property purchasers are the main legal threat to appraisers performing appraisals for lending.
  • Identify the applicable statute of limitations and understand how it works.

Chapter 3: Lessons from Mass Litigation Against Appraisers

In chapter 3, Peter speaks about recent situation in which hundreds of appraisers were sued across the country by businesses formed to sue appraisers for profit on behalf of mortgage lenders. That plan failed, but there are key lessons about:
  • What an actual lawsuit complaint against an appraiser looks like.
  • How you should respond if you are served with a lawsuit.
  • Understanding the basics of E&O insurance coverage.
  • Being aware of the most common reasons why appraisers don’t have coverage under E&O when a claim happens.

Chapter 4: Common Non-Value Claims and Using Plain English

In this chapter, Peter tells you what the single most common alleged error in claims is and addresses some other typical claim subjects. You’ll learn:
  • Why appraisers need to pay special attention to square footage.
  • Why you need to be wary of information supplied by borrowers, sellers and the MLS.
  • The importance of using plain English in reports to disclose special property problems.
  • How to word good disclosure language.

Chapter 5: Commons Myths about Appraiser Liability

In this chapter, you’ll hear about some common myths regarding appraiser liability. The learning objectives are to:
  • Give you an understanding that appraiser professional liability is a “personal” liability that cannot be avoided by doing business through a limited liability-type entity such as an LLC or corporation.
  • Further understand, based on claims of the last decade, the primary liability threats come from borrowers/property purchasers.
  • Dispel a myth that only appraisers who do appraisals for loans get sued.
  • Give you a basic introduction to liability issues regarding non-lending work.
  • Give you an understanding that for non-lending work, the main liability threat is your client.
  • Inform you why liability threats and administrative complaints should always be reported to your E&O carrier.

Chapter 6: Hybrid Appraisal Liability Issues – Things to Think About Even if You Never Do a Hybrid

This chapter address liability concerns relating to the new “hybrid appraisal” phenomenon. Even if you never do a hybrid appraisal, this chapter holds some good lessons about:
  • The importance of thoroughly reading through and thinking about liability issues in any new appraisal form, especially intended user and intended use language.
  • Specific liability concerns when an appraiser is performing a hybrid-type appraisal assignment.
  • Why appraisers still get dragged into claims even when the information they are using comes from a third party – such as a third party inspector providing property condition information.

Chapter 7: How to Deal with Threatening Situations and a Summary of Tips

Peter will give you some advice here about different scenarios that may present legal risk. You’ll learn:
  • Some basic ways and tools to deal with threatening situations.
  • What not to do – avoiding admissions of liability.

Technological Requirements and Prerequisites

The course is offered through a cloud-based learning platform. To run the course, you only need an up-to-date web browser. Except for brief periods of maintenance, you may access the course at any time of day. The learning platform is accessible from both PC and Mac computers and also will run on most tablets. There are no prerequisites to taking the course and you do not need any outside materials.

General Course Policies

  1. Students have 90 days to complete the course following registration before access will expire.
  2. There is a short quiz at the end of each chapter and students must complete each quiz with a passing score of at least 70% to move onto the next chapter. Failed quizzes can be retaken until they are passed, but the questions will change on each retaken quiz to assure that you are mastering the material.
  3. The course is not considered complete until the course evaluation has been completed at the end.
  4. Students must finish the entire course to receive credit.
  5. Students must complete course and each quiz on his or her own without unauthorized assistance and are required to verify their identity and personal completion of the course. If the course is taken for continuing education credit, any misrepresentations will be reported to state licensing authorities.
  6. Students are encouraged to seek help and clarifications from the instructor to both enjoy the course and foster their learning. The instructor’s contact information is provided during registration and within the course itself.

Course Access and Navigation

There is an instructional video at the beginning of the course about how to navigate the technological features, as well as in the resource center in the learning platform. The basics are:
  1. If you have already registered for a course, go to valuationeducation.com and click on login in the upper right-hand corner of the homepage. This will bring you to the learning platform.
  2. Once you have entered the online learning platform, click on “My Learning” in the menu on the left edge of the page. If you wish to hide or show this menu, click on the three small lines on the left of the page, just to the right of the Valuation Education logo near the top.
  3. From the “My Learning” page, when your mouse is over the box labeled with the course title, it should darken and show the words “launch course” in the center. Click this to enter the course.
  4. Now you are in your course. From here, you will watch videos that contain the course content and take knowledge quizzes after every chapter. The chapters and quizzes are laid out sequentially from the top to the bottom of the page. To move on to the next video or quiz, the previous one must be completed in full.
  5. To watch a video chapter, simply press the play button in the bottom right of the video player. You will not be able to scrub through or fast forward within a video until it has been watched completely through once; after that, you can go back and forth through each video at your convenience.
  6. While viewing a chapter, you can move on to the next chapter, if unlocked, by clicking the blue box with an arrow in the upper right corner.
  7. You can exit the course by click the red x in the upper left corner.
  8. While taking a quiz, click the “Save and Continue” button below the answer choices to move on to the next question.
  9. To exit a quiz at any time, click the “Exit Assessment” button in the upper right. Your responses will be saved.