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UW Stipulation.

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masmia

Thread Starter
Sophomore Member
Joined
Oct 16, 2007
Professional Status
Certified General Appraiser
State
Florida
After appraisal is done the UW wants to know if the condo project is under any current litigation. This seems way out of SOW to me but I figured I'd ask the pros here in case I'm missing something. Thanks.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
After appraisal is done the UW wants to know if the condo project is under any current litigation. This seems way out of SOW to me but I figured I'd ask the pros here in case I'm missing something. Thanks.
You can ask the management company of the HOA. Most in my area now will not answer the question. Some require the HO's written request. I put that in my appraisal that attempts were made and if this information is required to make the loan, it should be provided by the borrower.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Hmmm, never heard of that one? Randolph seems to have seen it before and his answer seems reasonable? I'd get the borrower to answer that.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
masmia,

I would say that during the normal course of work as I developed the appraisal I did not become aware of any information regarding litigation and if I had I would have reported it in my appraisal. Actively researching the possibility that such litigation exists is outside my scope of work and outside my area of expertise as an appraiser. I did not attempt to perform that sort of research.
 

Linda Troxell

Freshman Member
Joined
Oct 21, 2004
Professional Status
Certified Residential Appraiser
State
California
As I recall, that was a common request starting in the mid 90's, when there was a lot of litigation. Consequently, I have always included that information and have never had a management company refuse to give it me.
 

toddmallard

Junior Member
Joined
Oct 4, 2007
Professional Status
Certified Residential Appraiser
State
Georgia
Definatly part of the SOW. If there a 10 million possible judgment on the way, and the condo owners are responsile, Does that not drop the value a bit. Also don't you contact the condo assoc in order to find out if there are any special assessments?
All part of the job.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
After appraisal is done the UW wants to know if the condo project is under any current litigation. This seems way out of SOW to me but I figured I'd ask the pros here in case I'm missing something. Thanks.

Masmia,

You sure as heck are! A part of ANY decent condo appraisal is the appraiser contacting the HOA and specifically asking if there is any outstanding or pending litigation. Not only that, you should be asking about the HOA reserves and providing an analysis if the reserves are adequate versus the observed condition of the project and responsibilities of the HOA.

It's part of the job. Market value is affected by those things. It also answers why one project may mysteriously be selling well under comparable ones. So I do not agree that is is outside of the SOW. It is well within it. Now if you make attempts to find out, and HOA officers, or managment company, or borrower, all refuse to answer, then that is what you disclose. But we should make the good faith attempt. It's not any different than asking for a copy of a sales contract.

Webbed.
 
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tjcou812

Junior Member
Joined
Aug 17, 2007
Professional Status
Certified Residential Appraiser
State
Connecticut
I agree with Webbed Feet, I also ask the same question to both the homeowner and HOA. My question is to all of you. If there is ongoing/outstanding litigation shouldn't that show up in the title search and reported by the title company doing the research ??? Thanks for your response.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
OK, I'll qualify my prior remark. It is within the appraiser's scope of work and normal course of business to ask the HO and the HOA if there is any pending litigation and to report their answer. It is also within the appraiser's scope of work to report anything they may learn during their development of the appraisal.

But outside of that, the appraiser cannot make a definitive statement that 'no litigation' exists or that 'no other than what has beeen reported' exists unless they want to take on the liability of failing to report some litigation that was unknown, unreported, or undiscovered.
 
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