Pending litigation?

[Michigan CG]

We had a municipality who insisted on title searches in our eminent domain contracts. Said we were not lawyers. Didn't matter to them, still was part of the contract. So we called our attourney, got a quote and added 20% to their fee.

 

[Carnivore]

Enjoying Christmas with family and friends why are you here?

I am single. My son is with me today until new years. Yesterday and last night I was at the girlffiends house and we went to midnight mass. Going to my brothers tonight to meet up with my family thats in town. :new_all_coholic:

back on topic.

The question then is why have they not told the appraiser about the litigation or problems they are aware of? Seems silly tho ask for something and not say why or mention they know something. The client and appraiser are a team in that sense.

Chris, hope you christmas is going well.

 

[Terrel L. Shields]

The only reason they would ask is because they suspect there is....

If you know it is, then disclose it but the absence of evidence is not the evidence of absence.

Enjoying Christmas with family and friends why are you here

personally we had great meal and went visiting my poor old auntie who pretty feeble and knowing she won't see too many more. Having lost my brother only 2 weeks ago, after the prayer at meal time, my sister in law put her arm around me with a tear and said "we're getting fewer and fewer aren't we?" Yes, we are. There were 9 of us and 4 at my aunts. In the early 1970's there would have been 25-30 among us. So it was kind of a sad little Xmas but we were warm and safe and made the best of it. i felt kinda bad for the Fedex man who delivered a pck. after 5 pm at my place last night. It could have waited. It wasn't a present.

 

[Lloyd Bonafide]

"As per the HOA manager, (name and phone number), there is no pending litigation in the subject complex." You're done -

 

[Brian Weaver]

Ages ago when I was a staff appraiser at an S&L...we briefly had to ask the following question of condo management:

"Do you have inside-the-wall insurance?"

Obviously my employer must have been stung by this type of coverage...or lack thereof at some point. So, some V.P. probably thought it would be keen if we would ask the question.

99% answered with, "Huh"?

But...we were on staff...so we asked the question.

It only lasted a few months before whoever thought of it got bored with the whole thing and quit making us ask.

 

[The Warrior Monk]

Once again the Quick, Lean and Cheap Crowd wants something for free. They wont ask the clsoing attorney because the charge would be $1,000+ for this Service.

Speaking of Service, where is the usual "We are a Service Business" Crowd?

This is a service business. Hire and attorney to do the task, and send the results to client along with fee that covers the attorney's fee + appraiser's fee for managing the service.

 

[Terrel L. Shields]

Lean and Cheap Crowd wants something for free

and the appraisal community has been oh so eager to provide it and any number of other free services without regard for the risk it poses them let along the lack of compensation.

 

[Brad Ellis]

Sorry folks, but I'll disagree and strongly here.

YOU are the lenders' eyes and ears on the ground. You are providing an opinion of market value. How can you know the market value if you do not know the factors that can impact market value- and a lawsuit against an HOA is certainly a potential factor?

Further, you are providing a whole host of information in a condo assignment that you really cannot know- such as the number under contract, the number rented, etc. You get that from the management agent or the HOA officials and you report what you are told (with appropriate attribution to the source). So what is so hard about asking if there is any pending litigation against the HOA?

And do not your certifications state that you obtained data from sources deemed to be reliable?

Come on. How is this any different from checking a closing price only to later find out that there was 40% worth of incentives? You cannot know that so you report what you discover and you are done it. Hopefully you would recognize a sale that was so out of bounds based upon your specific market knowledge- but how can someone blame you for reporting what their answer to a question was?

But- OK- show me the lawusit.

Brad

 

[hastalavista]

Trying to determine if there is litigation pending is common practice at my office (since a significant lawsuit could affect marketability, I'd want to know about this anyway).

Our MLS system is rather good, and there is a default question in the MLS format for condos asking "litigation pending".
We'll also ask the management company. Another good source to ask is one of the agents who have sold a unit in the building.

We don't make an absolute statement in our reports that litigation exists or doesn't exist. We outline what we did to try to determine if it exists or not and then report what we find.

Per management company no litigation at this time.

Per agent Smith, comp#3, no litigation as of that comp's selling date; management company would not confirm.

Management company's policy is to "not comment" on any pending litigation- client is referred to condo docs for further information.

So, in my market, the request is standard and the process to determine it is straightforward and part of our normal operating procedure. I've never worried about any additional liability as long as I lay-out the steps that I took to confirm the information and cite my source.

 

[Carnivore]

Brad,

I will cede you one small point. We should report that the subject property is under cloud of litigation and the source. We cannot guage the impact on something that has not concluded. We can not render an opinion of the legal action and its future impact if any on the subject property.

So heres an example;

NOTE TO READER: According to the HOA/Owner the subject property and title is under the cloud of pending litigation. The impact of this is unknown at this time. Contact legal counsel for advice.

Stated Hypothetical Condition: The report conclusions are rendered on the Hypothetical Condition as if the legal action does not exist on the effective date of this appraisal. The report is NOT MADE AS-IS. The report is made AS-IF.

Reference USPAP 2006 http://commerce.appraisalfoundation.org/html/2006 USPAP/DEFINITIONS.htm

HYPOTHETICAL CONDITION: that which is contrary to what exists but is supposed for the purpose of analysis.

Comment: Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.