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

[J Grant]

I described in above post 29 the run of the mill version but there can be permutations - one building I refused several assignments in was run by Marriott and kind of a hybrid, one wing was a true hotel, the other was the "condo -tel" , wing comprised of condo units and owner of a unit could put it in the rental pool and a renter/guest could use the hotel side amenities. I am sure it could be appraised I just did not want to be the appraiser to do it. Perhaps there are different exotic combinations out there, but why would VA get involved with financing such a thing...

 

[George Hatch]

The appraiser did not mention legal uses of the property and simply stated that the Highest and Best Use of the property as unimproved is Multi-family.

So the HBU of the property interest being appraised ( a single unit) is as multi-family?

This is what happens when appraisers arbitrarily conflate the HBU with the zoning.

 

[Salty]

So the appraiser said multi-family use is allowed. I suppose it depends on what the appraiser's definition of multi family use is and how that compares to the multi-family definition used by the municipality. In my area the DVRPC uses multi-family to cover a whole range of property types. if not multi-family then what should it be called?

Seems odd to me that a borrower would use the appraisal as a single tool to make the determination if he/she is allowed to live in a property. Isn't this what the title process would reveal?

I feel like the appraiser's job is to report the facts. Not to make a determination for the potential borrower. How is the appraiser to know what the borrower's plans are in terms of occupancy? Is it even the appraiser's business? When I value homes for purchase I rarely, if ever, even come in contact with the buyer.

All of this just reminds me why is not wroth the hassle to accept odd-ball assignments anymore.

 

[Deleted member 152047]

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.

This is a far-fetched assumption.

 

[Deleted member 152047]

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 loan was VA, which requires the buyer live in the property for at least one year.

The buyer cannot live in the property because of the underlying zoning and now has to sell.

The buyer approached the appraiser who states that the buyer has no understanding of land use laws or zoning, or highest and best use, etc. He then goes on to say that, in Florida, the buyer cannot sue because the client was the lending institution.

What do you informed professional think.

Should the buyer have legal standing to sue for damages, including selling fees to get out of the investment?

I seriously doubt there is an issue with the zoning. There are likely restrictions from the developer's perspective. To me, it sounds like this should not have qualified for an FHA or VA loan given the requirements for those platforms. You are placing the blame in the wrong area IMO. First the buyer should look in the mirror for someone to blame, then they should reach out to the lender as they never should have lent on the deal.

BTW, unless you have read every part of the PD and the subsequent amendments to the PD (which happens often), you cannot consider yourself fully informed as to the legally permissible uses. Central Florida municipalities are very familiar with this type of property and never would have allowed it to operate in this fashion if it were not legally permissible. It's not like some 3 unit landlord that gets away with some shenanigans, these are well-known property types with professional operators.

 

[Deleted member 152047]

All of this just reminds me why is not wroth the hassle to accept odd-ball assignments anymore.

These arent oddballs in Central Florida.

 

[TD Morgan]

This is a far-fetched assumption.

The lending agent was contacted and indicated that the VA guaranteed loan would not and could not be made for such property.

 

[TD Morgan]

These arent oddballs in Central Florida.

Exactly where the property is located.

 

[TD Morgan]

I seriously doubt there is an issue with the zoning. There are likely restrictions from the developer's perspective. To me, it sounds like this should not have qualified for an FHA or VA loan given the requirements for those platforms. You are placing the blame in the wrong area IMO. First the buyer should look in the mirror for someone to blame, then they should reach out to the lender as they never should have lent on the deal.

BTW, unless you have read every part of the PD and the subsequent amendments to the PD (which happens often), you cannot consider yourself fully informed as to the legally permissible uses. Central Florida municipalities are very familiar with this type of property and never would have allowed it to operate in this fashion if it were not legally permissible. It's not like some 3 unit landlord that gets away with some shenanigans, these are well-known property types with professional operators.

I spoke to the boss at zoning and they got legal opinions supporting their position. The approval was for a hotel to be built. It didn't even specify condominium development.

 

[Michigan CG]

I have read about these situations before and some have said a residential appraiser license does not allow them to appraise this type of property.