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On the surface, suing in negligence seems the most promising avenue for recovery against appraisers, because liability depends on an examination of defendant's conduct alone and does not require an examination or defendant's mental state to show intent or agreement. But historically insuperable hurdles have operated to prevent recovery under this seemingly simple cause of action. One hurdle is lack of privity. The appraiser's legal relationship is with the hiring party--the lender--to assess the risks of the loan transaction and not with the purchaser, who may rely on the appraisal in making the decision to purchase. Because of the lack of privity with the buyer-borrowers, the appraisers had no duty and hence no liability to them, even when the property appraisal was critical in the loan transaction. Moreover, even if the facts showed that the appraiser was somehow negligent and that injury to the buyer-borrower was foreseeable, appraisers have asserted the economic loss rule, which operates to preclude recovery in a tort action for purely economic losses, unaccompanied by physical injury or property damage.

These defenses might have seemed reasonable or appropriate in a time when there were isolated errors in appraisal reports, but in the world described by the Crisis Commission, fraught with sharp practices and dishonesty, a new regime seems in order. In the last few years, some courts, perceiving the disconnect between the formal rules governing the conduct of appraisers and the ends sought to be achieved by those rules, are making rulings aimed at some harmony and coherence for a sensible imposition of liability for appraisers' wrongful conduct. The limitations of the negligence claim and the need for a new regime are discussed in further detail below.