Does a Buyer Have Standing to Sue an Appraiser in Florida for Negligence?

[Cob]

The loan would never have been made had the lender not relied on the assertions by the appraiser that multi-family use was allowed per zoning.

When a lender does a loan on ANY kind of Condominium, they usually have a list of Condominium projects that are and are not eligible for loans of all types, they do this BEFORE ordering the appraisal, it's their job to perform due diligence BEFORE ordering the appraisal IMO, not just order the appraisal and rely on the appraiser to inform them, that's why lender get paid thousands of dollars for each loan.

 

[TD Morgan]

I wonder if the appraiser called the local VA Regional Loan department to explain the property and get some guidance. I know of only a few hotel/condo type properties in our area. I would be skeptical one being financed via VA.

The buyer knew that the zoning allowed short term rental, i.e. hotel use, but did not know that residential use was not allowed.

 

[TD Morgan]

Seems like the buyer should have known, or been warned he couldn't live there full time. I'd sue the Realtors for not disclosing that information. If the buyer had known, there never would have been an appraisal.

Many people live in the condos full time, owners and well as renters. The Association management does not know the zoning does not allow it.

 

[TD Morgan]

When a lender does a loan on ANY kind of Condominium, they usually have a list of Condominium projects that are and are not eligible for loans of all types, they do this BEFORE ordering the appraisal, it's their job to perform due diligence BEFORE ordering the appraisal IMO, not just order the appraisal and rely on the appraiser to inform them, that's why lender get paid thousands of dollars for each loan.

The condo project was not originally on the VA approved list and was put on the list during the loan approval process.

 

[glenn walker]

The loan would never have been made had the lender not relied on the assertions by the appraiser that multi-family use was allowed per zoning.

That is not TRUE- The facts are VA doesn't even make loans on Condo-Hotels and Every Condo they insure loans on has to be on their Condo-Approved list and there are no Condo-Hotels on there approved list, so if it was placed on their approved list then its a regular CONDO or it was a previous Condo-Hotel that changed it self to a regular project.

The lenders Underwriter is also required to order a Condominium-Certification, which lays out how many units, how many owner occupied and HOA dues etc. SO it would not matter what the VA appraiser called the Zoning or Land Use. ALSO the VA buyer would have to be blind and deaf or both to not know he/she was looking at a Condo-Hotel. You walk in the front receptionist area and it's often like a Ritz Carlton Hotel, Front , desk, snacks and a nice friendly person signing you in and out. As far as a Realtor they have no liability and are not involved in the loan.

THE BOTTOM line is there is a lot more to this story then we are being told and my gut feeling is the appraiser has a disgruntled BUYER who now wants out of the deal. None of this adds up and like previously Stated VA does not loan on -Non-Owner Occupied purchases , Units or Condo-Hotels. Also that is total BS the buyer cannot live in it full time , on a Condo-Hotel an-owner decides if he wants to live in it or have the unit rented out for him. The stupid buyer probably alreday contacted his REL and they told He?she owns a regular condo and to go pound salt. Now his last ditch attempt is to try and blame the appraiser. It's evident the borrower/buyer is getting advice from an-outside party, maybe some Back water attorney who is assisting him on a fishing expedition. And from having attorneys in the family I can assure the Borrower that nobody sues VA because they have unlimited Federal Funds and a VA buyer does not have the resources to pay for expert witnesses , administrative law attorenys, and NO attorneys don't take these Pro-Bono- Or on contingencies, its hard cash up front or get lost. As far as the VA Appraiser he/she needs to contact their E & O legal department and give them a Head Up that a NUT JOB is making waves. Personally I would tell the borrower to go screw himself and to sue me and then laugh : ) LMAO

 

[J Grant]

TD Morgan -An appraiser valued a condo hotel unit, on property zoned P-D (Planned Development) where the approved use is as a hotel.
The appraiser indicated that "multi-family" use is allowed, when it is not allowed.

The appraiser might have meant multi family use is allowed under the PD Zoning - which might be correct. , even if "residential use" is not the use of this condo hotel - something feels very off about this whole thing, I don't know who the buyer is or your interest in this, but imo tell the buyer do their own research and call an atty and beyond that nada -this buyer could be so litigious happy that anything you tell them regarding their rights , or your opinion about the appraisal - they might turn around and sue YOU for giving them bad advice..

 

[Chandler]

I would not ask an appraiser for legal advice, even if it pertains as to whether or not appraisers can be sued

 

[J Grant]

I would not ask an appraiser for legal advice, even if it pertains as to whether or not appraisers can be sued

We can't stop anyone from asking, but we can be smart enough not to answer !

The only answer is tell them to ask an attorney.

 

[George Hatch]

We appraise property rights, not "properties", per se. In this case it sounds like it is the property rights which do not allow the desired occupancy. The HOA CC&Rs, which are also a legal encumbrance on the property rights and which also fall under the category of "legally permissible" in an HBU analysis.

The property rights itself is an atypical form of ownership so on that basis alone it would warrant a summary of what's involved in the report. Even if the users were familiar with the property type in general, the setups and limitations for different projects will vary. They aren't widgets.

In most jurisdictions I've seen, a project including condotel units would generally be subject to a use permit process or similar as part of the development so it is the project as a whole that would be approved for its various uses. The project could have been approved for full time occupancy regardless of the zoning so I wouldn't refer to this as a zoning issue. The CC&Rs could just as easily have prohibited full time occupancy even if the project was on a parcel zoned for residential use.

Reading between the lines it looks like the appraiser probably didn't spell out the limitations of the property rights being appraised in their report. If so, this would be an example of how the value conclusion itself isn't always the most important piece of information in an appraisal report. Your value conclusion can be "right" but you still have a serious problem anyway.

In this example the buyer is saying they never would have followed through with their purchase had they known this information. And if it's true that the info was omitted then the lender can say the same - they never would have made this loan at these terms if the appraiser had included this info in their report. If the the appraiser made this omission then they have no defense on their end, so this omission basically provides the lender and users with the plausible deniability.

Fixating on the number to the exclusion of everything else doesn't always cause a problem - until it does.

 

[J Grant]

I am not an attorney, I just play one on TV.

But I fail to understand how a condo hotel can prevent a unit owner from occupying their own unit ! ( though anything is possible ). The ones I am aware of, the owners have an option to put their unit into a rental pool, and then the management, for a fee, treats it like a hotel unit renting it out by the night, week, or month depending - each building can have its own rules around the rental pool, length of occupancy etc but seems odd they can prevent an owner from living in their owned condo .

As far as if the lender was not aware it was a condo hotel that is between lender and appraiser if it is an issue - sounds like this is a borrower on a warpath of their own.