Thursday, February 16, 2012

What is the Statute of Limitations for a Lawsuit Against an Appraiser in my State?

The statute of limitations period for a professional negligence claim against an appraiser ranges from 10 years in one particular New England state down to 1 year in a certain Southern state.  Application of the "discovery rule" also varies widely. 

In 2012, most lawsuits against both residential and commercial appraisers continue to relate to appraisals performed at or near the peak of the real estate price bubble, 2004 to mid-2008. Appraisers dragged into these claims often ask us about the relevant statutes of limitations. The question is usually something like: “I did the appraisal in 2005, more than five years ago. I don’t even have the work file anymore. Will the complaint be dismissed based on the statute of limitations?”

The answer to that question is usually not what the appraiser wants to hear, but as we get further away from the bubble years, we are starting to see more cases defended successfully based on a statute of limitations defense. The defense will become more relevant to claims against appraisers day-by-day.

Because appraisers read and hear so many misconceptions about statutes of limitations, we have posted a new article and chart for LIA-insured appraisers and other appraiser members of READI in the Liability Prevention section of  Non-LIA insured appraisers can access most of READI's materials by joining READI for free, but the registration process requires providing current E&O insurance information because that is how READI keeps access limited to appraisers genuinely interested in READI's appraiser-defense mission.  Here is a link to the article and chart, but again registration is required to view the material.  The article and chart provide information to appraisers about the relevant statutes of limitations periods for appraiser negligence, breach of contract and intentional fraud in all 50 states and also indicate whether the "discovery rule" will likely apply to appraiser negligence claims in each state.  The research for the chart required many hours of labor on our part.  It is important for appraisers to know that the laws vary greatly by state.