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

[Deleted member 152047]

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.

It sounds like you (or the buyer) knew what they were buying (a condo-tel unit). The unit was somehow financed by the VA (it shouldn't have been) and for some reason you (or the buyer) think that you are forced into a sale of the asset. Why? It is already financed. If the VA lent money on it, they cannot simply take back the money. Who is forcing the sale?

To me, it sounds like someone got in over their head. The condo-tel prices are extremely attractive when you first look at them. However, when you dig into the fees and all of the stipulations within the contract, they are not a good deal. Now the buyer is having remorse and wants to sell the unit.....well, guess what? The resale market stinks, people aren't travelling so occupancies are down, and the buyer was snake bit by their own ignorance.

Go ahead and sue the appraiser. You (or the buyer) will spend tens of thousands of dollars and it is likely that nothing but a headache will come of it. As I previously mentioned, the buyer is at fault here. The only other feasible party that could have an issue is the lender. Especially if they have to take back the property.

 

[TD Morgan]

It sounds like you (or the buyer) knew what they were buying (a condo-tel unit). The unit was somehow financed by the VA (it shouldn't have been) and for some reason you (or the buyer) think that you are forced into a sale of the asset. Why? It is already financed. If the VA lent money on it, they cannot simply take back the money. Who is forcing the sale?

To me, it sounds like someone got in over their head. The condo-tel prices are extremely attractive when you first look at them. However, when you dig into the fees and all of the stipulations within the contract, they are not a good deal. Now the buyer is having remorse and wants to sell the unit.....well, guess what? The resale market stinks, people aren't travelling so occupancies are down, and the buyer was snake bit by their own ignorance.

Go ahead and sue the appraiser. You (or the buyer) will spend tens of thousands of dollars and it is likely that nothing but a headache will come of it. As I previously mentioned, the buyer is at fault here. The only other feasible party that could have an issue is the lender. Especially if they have to take back the property.

The buyer is not allowed to use the unit as his family's home and therefore must sell.

He stands to make a 15% profit when he sells, so the concern is not because he is losing money.

You think he does not have legal standing for a lawsuit?

 

[Deleted member 152047]

The buyer is not allowed to use the unit as his family's home and therefore must sell.

He stands to make a 15% profit when he sells, so the concern is not because he is losing money.

No damages, sell it and move on.

 

[TD Morgan]

No damages, sell it and move on.

He now has to pay a real estate agent to sell and pay for relocation. The price appreciation would happen regardless. It should not offset the losses, should it?

 

[Salty]

Yeah I don't see how its the appraiser's fault that the person decided to buy a unit without knowing the rules. The appraiser provided the value to the lender/client as per the engagement conditions. I not sure whose fault it is other than the buyer not completing proper due diligence. I don't see a judge/jury saying yes - its the appraisers fault. Of course if I see the report that may change. But at some point buyers make the decision based on their own diligence guided by a real estate professional (agent) or attorney. Unless the appraiser committed an egregious error. I just keep going back to how on earth could the buyer not know this.

 

[Deleted member 152047]

He now has to pay a real estate agent to sell and pay for relocation. The price appreciation would happen regardless. It should not offset the losses, should it?

What is worse? A 2-3 year headache and tens of thousands of dollars trying to prove that an appraiser is liable for something that he/she likely is not liable for?

or

Selling the unit for a profit and moving on.

 

[Deleted member 152047]

Yeah I don't see how its the appraiser's fault that the person decided to buy a unit without knowing the rules. The appraiser provided the value to the lender/client as per the engagement conditions. I not sure whose fault it is other than the buyer not completing proper due diligence. I don't see a judge/jury saying yes - its the appraisers fault. Of course if I see the report that may change. But at some point buyers make the decision based on their own diligence guided by a real estate professional (agent) or attorney. Unless the appraiser committed an egregious error.

Well said!

 

[TD Morgan]

Yeah I don't see how its the appraiser's fault that the person decided to buy a unit without knowing the rules. The appraiser provided the value to the lender/client as per the engagement conditions. I not sure whose fault it is other than the buyer not completing proper due diligence. I don't see a judge/jury saying yes - its the appraisers fault. Of course if I see the report that may change. But at some point buyers make the decision based on their own diligence guided by a real estate professional (agent) or attorney. Unless the appraiser committed an egregious error. I just keep going back to how on earth could the buyer not know this.

He knew it could be rented in the hotel pool, but did not know it could not be used as a primary residence and knew that the VA loan requires it, and presumed that the approval of the loan supported such use. Not being an appraiser, he isn't highly sophisticated in such matters. If the appraiser had properly researched the zoning and specified that permanent residency was not allowed, the loan would not have been approved.

 

[jay trotta]

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.

#14; "The condo project was not originally on the VA approved list and was put on the list during the loan approval process."
IMO; where is the "Due Diligence" on the Lenders part ??

 

[TD Morgan]

What is worse? A 2-3 year headache and tens of thousands of dollars trying to prove that an appraiser is liable for something that he/she likely is not liable for?

or

Selling the unit for a profit and moving on.

How would a lawsuit take two to three years to complete or take tens of thousands of dollars? He could sue in small claims for up to $8,000. Not sure where you are from, but a suit would probably be for $15k or so, if he didn't elect to go the small claims route. I am just trying to give input, since I am a friend.