Pending litigation?

[Couch Potato]

Brad,

I always ask about current and pending litigation, but I would never categorically state "there is no pending litigation" as the OP was asked to do. That is just too broad a statement for any reasonable person to make. It would be saying "I know the intended actions of everyone." It is just too easy to find a reason to sue these days.

A decent appraiser will have asked about litigation and included comments on it, if it were found. Although I generally don't comment on things that did not exist, I would not have a problem saying, "I found no evidence of pending litigation during my research." That is as far as anyone should be expected to go. It is humanly impossible to know more, and stupid to state more.

 

[Vegan702]

I always ask about litigation and like Denis our MLS provides a spot for this for the Realtor to fill out. It definitely affects marketability if a project is under litigation so I would think the appraiser would need to find out this information.

 

[Brad Ellis]

I like Denis' approach and think it would serve perfectly.

I did not read the OP as saying they wanted some definitive absolute statement; rather I assume it is just another piece of data from the management firm. If the OP (sorry did not re-read it) said they want some absolute statement then they can surely send out a request or, as Brian suggests, check Lexus/Nexis.

And to Carney, do you not mean an estraordinary assumption- you know- something you do not know?

Brad

 

[Carnivore]

can surely send out a request or, as Brian suggests, check Lexus/Nexis.

And to Carney, do you not mean an estraordinary assumption- you know- something you do not know?

Brad

That thought crossed my mind. I do think the HC is appropriate, because the Lititgation is a known fact. It is also safe(I believe) to say that the litigation has an impact(good or bad) on the property. The issue is that the impact of the litigation can not at this point be guaged because its pending. The pendng is the unknown and where I believe your thinking has gone twoards the EA.

To me, the HC creates a situation where you(the client) can make a decision based on the value and then sit back and wait for a way to move forward on advice of your in-house legal counsel. The EA on the other hand places way to much liability on me(the appraiser) and places me in the position of forming a legal opinion, of which I am not allowed by state law.

Brad, this certainly is a really different situation then we typically discuss. Frankly, I can not see a clear way to make an EA, simply because we know litigation is not a good thing(at least for one side).

To conclude, the best action would be to notify you ASAP and wait for written instructions on how to proceed.

Your thoughts?

 

[Mike Boyd]

Ask the person in charge of the HOA who their attorney is. Then, get a letter from him or her on letterhead. Scan and email it to your client. DO NOT offer them YOUR opinion. This is a legal matter.

 

[Joyce Potts]

Wouldn't it make more sense for the lender to ask that of the condo association and have them provide an affadavit. What has that got to do with the appraiser's job, other than something extraordinarly obvious that may be currently impacting market values?

The appraisers is NOT the deed or permit police, a structural, plumbing, mechanical or electrical expert to name a few. For those who think commenting on such things, other than something obvious, you're opening the liability door, not closing it, IMO.

 

[Brad Ellis]

Carney,

Sorry, at this stage it is an EA.

If you KNEW that there was pending litigation and that it had an impact on value, and chose (for whatever reason) to ignore that, then the HC would apply.

However, in this instance, you do not know; hence the EA.

Brad

 

[Carnivore]

Carney,

Sorry, at this stage it is an EA.

If you KNEW that there was pending litigation and that it had an impact on value, and chose (for whatever reason) to ignore that, then the HC would apply.

However, in this instance, you do not know; hence the EA.

Brad

Brad,

I am claiming that we do know that the litigation has impact from prior experiences with other properties. We dont know what the impact is or for how long the impact will last.

How can I EA its OK, when I know with reasonable certainty it will be found false?

 

[Brad Ellis]

Carney,

I see. Guess I was confused as the OP asked if they had to find out or try and so I assumed we were dealing with something unknown.

Obviously if you know there is pending litigation and it will impact MV but you are asked to ignore that, then the HC is required. If you know there is pending litigation but do not know its impact then the EA and if you do not know if there is anything pending then an EA will work too- only that would not satisfy the client request.

I think this just another part of due diligence- and all the nmore important today given all the fraud we are seeing in condo conversions in so many areas- I have that all over FL, in Chicago, Vegas, SoCal and other instances in other areas.

In my view, and especially today (although when in private practice my norm was to always go the extra mile for the client), many of these requests will dictate how the client views the vendor over a much longer term. And sure, I do think that relationship matters- what you might do for a one-hit wonder client is probably quite different from what you'd do for the good regular ones.

Further, I think some of this must be thought thru to the end. For example:

We are pacing an order with one of the regular posters here for a desk review. Now I KNOW he is not happy about a low fee assignment and he will not be getting into things he wants to- it is a probable fraud deal and he already knows about the development and the developers.

What will likely ensue, however, is that we will end up in court and he will be the expert witness (something he is VERY good at!) and for which he will receive full and appropriate compensation.

So, just when you might think you are getting ripped off things CAN turn around and you find yourself with what ends up being a nice overall fee for beginning with the uncompensated work or under-compensated work. Obviously we cannot know if our OP will get that- but what if there is a suit and then they ask for far more in depth analysis? Certainly possible that more work and fees could be produced.

Brad