Appraisers BEWARE: you are obligating yourself!!!

[Farm Gal]

Appraisers: PLEASE BE AWARE!!!! Here's a new twist the NEW twist: placing the 'disclaimer' on the website through which you conduit your finished product, thereby AGREEING by default that you are in agreement with the terms!!!!

(for those un-familiar with the problem!!!! brief history, the meat follows :evil: )

Some clients have been requireing (Which act I consider a REQUEST) appraisers to sign waivers and agreements which are counter to your contined business interests... Now when a client asks me to perform such an act, I have the choice to JUST SAY NO :twisted:

Since I would then have no control over who acted in what manner (Joe Idiot Lawyer, unhired by me) and how long any actions might go on 8O I choose not to do business with such entities OR remove such terminology from my agreement to perform work.

If not they are free to find another appraiser!

Liability Insurance Administrators and others from whom I have sought education specifically advise against agreeing to terms which would legally obligate you the appraiser and your entire firm to payment of any and ALL fees incurred by your client : might I point out that this becomes a binding legal contract?

But here's the NEW twist: placing the 'disclaimer' on the website through which you conduit your finished product, thereby AGREEING by default that I am in agreement with these terms!!!!

:evil: WHICH I AM ABSOLUTELY NOT :!: :evil: - full text of what was on the site follows: bold emphasis of what I am completely in disagreemnt with is mine.

~~~~~~~~~~~~~~~~~
Disclaimer - Please Read

LFS requires all vendors (Appraisers / Brokers / Agents) to carry and maintain a current policy for professional liability and Errors & Omissions Insurance equal to the state required minimum levels or at least ($ 1,000,000 / $ 3,000,000).

Appraiser / Broker / Agent Agrees to hold harmless, defend, and indemnify LFS from loss, costs or expenses (including, without limitation, attorney, expert witness and paralegal fees) incurred in connection with any claims, demands, suits, appeals, disputes or arbitrations arising from services, Appraisals, BPOs, Inspections, Property Management, Sales or Property Preservation services provided by Appraiser / Broker / Agent hereunder, including without limitation disputes with Appraiser / Broker / Agent subcontractors or actions by buyers, owners, sellers of property and claims of negligence in connection with services provided by Appraiser / Broker / Agent under this agreement. This indemnity provision shall not apply to the extent that such loss, costs, or expenses are caused by the gross negligence of intentional acts of LFS or of a consumer of such service.

Appraiser / Broker / Agent agrees to maintain and keep current all licenses, certifications and continuing education, as state licensing laws require.

~~~~~~~~~~~~~

Anyone else see a problem with this?

 

[Terry Russell]

Lee Ann,

Just my two cents.

Best to CYA for sure. You see so many disclaimers these days, I can not see how they would all be enforced.
I have heard to that the more detailed the disclaimer, the less weight it carries in court. But it is good for the attorneys who write the disclaimers, because they can litigate the document for years.

There is the classic case of the “Beware of Dog” sign, in which a person was bitten and consequently sued.
The dog owner’s position was, Hey! I got a sign up!
Judge says, Guilty, the sign is proof that you were aware that the dog may bite but failed to restrain it. Resulted in a stiffer fine also.

$.02 terry

 

[Farm Gal]

Terry:

good for the attorneys who write the disclaimers, because they can litigate the document for years.

Ummm... my point EACTLY!!!

I agree that a judge MIGHT 'throw the rascals out', there is occasionally some sympathy for the working man. I might point out that we are trying to restablish our position as professionals so that theory is not one on which I'd care to depend.... Still, I for one do not intend to sign ANY documents indemnifying ME as the 'responsible party' for all legal bills including frivolous and unwarrented lawsuits which may not even be due to any wrongdoing on MY part!

The company representative to whom I voiced my concern indicated that it was written by their company lawyer to prevent such suits seeking the companies 'deeper pockets'...
-OK fine sez, me!
BUT what makes you think I have any desire to estabish a direct conduit to MINE!?!?!?! :evil:

"Your Honor I didn't think they'd sue me" is something I am sure gets heard ALL the time, and not something I want to throw up as a defense.

 

[Richard Carlsen]

Lee Ann

I heatedly agree with you. It is the foolish appraiser who signs the terms of agreement without reading them or uses a site for transmittal without understanding the stated disclaimers.

The problem as I see it is that too many appraisers are too busy being appraisers and are not aware that what they are actually running is a business. Their very own business. If their business is to survive and prosper, they must be in control of it and have an understanding of all of the ramifications of their actions, including the terms and conditions between them and the lenders/clients. It has been my experience over the years that one does not really get control of their business until they have worked the business into a success. Until then, it is nearly all struggle and survive. Once you come to understand you have yourself established with a reputation and a clientele, you really begin to sense the obligations that you have to preserve the business and its reputation by being careful what you agree to and sign. This is the point in which you can begin to take pride in your accomplishments but it is also the time when, if not careful, the foundation laid through all of that early hard work can be chipped away. That is the time to be even more careful and conduct you business as ethically as you know how. Dumb decisions can bring a lot of hard work crashing down around you.

 

[Blue1]

Lee Ann,

Thanks for bringing this to our attention.....Here's another: Beware of signing statements that are required by cetain lending institutions when you E-Mail a report. I had a client (BIG lender) want me to sign a statement to the effect that my files were unable to be unlocked/altered.......I refused to sign it because ANY file can be unlocked if someone knows how do do it. HEY, I'm just an appraiser....not a programmer......If you lenders need someone to "hold your hand" go the the nearest nerd.....

 

[Ross (CO)]

Blue1 ---- The stuff about un-locking a supposedly locked and secured file is definitely spooky. A few weks ago one poster stated a situation where a client wanted him to make a "change" to his report. The client rep said that "we could make that change for you, but we would never do that"....and so on. I wish that sort of story could be looked into ! This particular disclaimer nonsense is being passed in the wrong direction. Perhaps WE should send out statements for our client to sign....saying that they will be held fully responsible if a "copy' of this electronically-transmitted appraisal report ever "comes back to the appraiser" in a deleterious manner, at any time in the future, and differs in any way from the master version of the report's text, photos, sketches, maps or total number of pages from that which is retained in appraisers workfile ! --- Please have your attorney print, sign and date this brief acknowledgment, and fax it back to me, so that I can e-mail your report file to you. Thank you very much. --- This upcoming stuff concerning clarifications on Intended Use / Intended User should pretty much tell us where any such malfeasance was sourced. Our client will actually have an enhanced responsibility to protect and safeguard that original content of our electronically-transmitted report. Is this not what the concept of Chain-of-Custody is all about ? I just sent you my report, and now "IT" is your responsibility. (all this relates to any changing, altering or monkeying-around-with the "locked" report )

 

[Rich Heyn]

Lee Ann:

The issue you have raised here involves what are generally referred to as "hold-harmless" or "indemnification" agreements.

As you know, this means that if the lender is named in the lawsuit along with the appraiser, the appraiser has agreed to pay all of the lender's attorney fees, court costs, damages, etc.

You are wise to avoid these agreements. This is the first time I've heard of them being included on a lender's website and I don't know what the ramifications might be. In the "Avoiding Liability" seminar, we have a section on indemnification but the discussion centers around employment agreements between the appraiser and lender, which is where these nasty little devils are usually found. I suspect that it would be much more difficult for a lender to enforce indemnification by simply saying it appeared on their website, in the absense of an agreement signed by the appraiser.

Your words to the wise are right on. Simply don't do business with clients who request/require indemnification. It just is not worth the risk.

Additional advice for others not familiar with this issue; When you take on a new client and they send you a rather innocuous looking employment agreement discussing delivery times, fees, etc., make sure to read it closely for hold-harmless or indemnification clauses. Also, you may wish to go to your files and make sure you haven't signed one in the past. If so, consider contacting your attorney and notifying the client that future appraisals will not be subject to indemnification.

Lee Ann, I'm sure you are aware of this but many appraisers are not -- YOUR E&O POLICY WILL NOT COVER INDEMNIFICATION OF THIRD PARTIES. It comes out of your pocket. They will cover only YOUR fees, costs and losses -- not those of others.

Rich Heyn

 

[Farm Gal]

Gentlemen and lady lurkers:
Further conversation with this client has further muddied the waters, I shall post the results MUCH later on a different forum. :evil:

I absolutely beleive that such statements are detremental to our entire way of doing business, should a client or unintended user elect to sue me I feel competent if unhappy to defend myself....

Setting a precedent for my paying for OTHER'S defense cost from frivolous suits and money to ALL third (fourth fifth parties) is absolutely out of the question.

This is a quote "Our lawyer drew that up to prevent people and companies for going after our deeper pockets." In MY opinion the AMC's and lenders then need to take on teh responsibility of insuring that their business associate - oh yeah "suppliers" or is it temporary contractees are reuptable and competent. Through what means I certainly don't know: perhaps a return to designations and professional associations' vetting of individuals? WHATEVER!!!

Again, this is NOT in my opinion reason to provide a conduit to mine wallet, I shall hold it tight under such circumstances. :evil:

 

[Farm Gal]

Further Update:
:evil: :evil: :evil:
Quoted from other corespondence by permission: Bold face MY emphasis

I agree that it looks like she did what was necessary and I do not believe they would ever be able to sustain any argument that she "accepted" those terms. I guess the only thing I would add is that most residential appraisers do not carry anywhere near those required insurance limits.

Also, in most policies, there is an exclusion for hold harmless or indemnity provisions. So, by accepting this provision, the appraiser is agreeing that his/her personal assets would be available to pay for the defense/indemnity of any lawsuit filed against Lenders because the carrier, if any, would likely not cover. I don't think most appraisers even realize what the hold harmless means. They consider it to be boilerplate that won't effect them.

The ones who have been sued realize that is not the case.
Claudia Gaglione
Gaglione & Dolan

 

[Jim McGrath]

Blue1 ---- The stuff about un-locking a supposedly locked and secured file is definitely spooky. A few weks ago one poster stated a situation where a client wanted him to make a "change" to his report. The client rep said that "we could make that change for you, but we would never do that"....and so on. I wish that sort of story could be looked into ! This particular disclaimer nonsense is being passed in the wrong direction. Perhaps WE should send out statements for our client to sign....saying that they will be held fully responsible if a "copy' of this electronically-transmitted appraisal report ever "comes back to the appraiser" in a deleterious manner, at any time in the future, and differs in any way from the master version of the report's text, photos, sketches, maps or total number of pages from that which is retained in appraisers workfile ! --- Please have your attorney print, sign and date this brief acknowledgment, and fax it back to me, so that I can e-mail your report file to you. Thank you very much. --- This upcoming stuff concerning clarifications on Intended Use / Intended User should pretty much tell us where any such malfeasance was sourced. Our client will actually have an enhanced responsibility to protect and safeguard that original content of our electronically-transmitted report. Is this not what the concept of Chain-of-Custody is all about ? I just sent you my report, and now "IT" is your responsibility. (all this relates to any changing, altering or monkeying-around-with the "locked" report )

Ross, this is a good idea, it just needs one thing added to it.

"If our report is changed or altered in any respect, the client agrees to hold us harmless, and will pay all legal costs associated with any defence needed by the appraiser." It might need some changing to make fully legal, but this will get their attention, when it's their pocketbook at risk, they will think twice or more about making changes.

Jim