Developer Alleges False Appraisal Attempted To Sabotage His Project

Kristin Casler

Written by
— Updated on October 20, 2017

apartmentsPlaintiff’s company in Missouri owns and was marketing for sale a subdivision in a recreational area. He sought to buy adjacent land. The deal was never accomplished because the parties could not agree on a price. Plaintiff alleges that in retaliation for his refusal to pay an exorbitant price for the property, the defendant property owner’s real estate agents conspired to damage his subdivision development.

The plaintiff alleges the defendants misappropriated his advertising materials and trademark, making it appear the adjacent property was part of his subdivision. An incomplete appraisal was published on a multiple listing service (MLS). The appraisal contains material and false statements about plaintiff’s adjacent subdivision, and the defendant’s real estate licensees knew the information was false, plaintiff asserts.

The defendants’ conduct interferes with plaintiff’s existing and prospective business relationships, plaintiff asserts. Further, the plaintiff alleges the real estate group was responsible for the conduct of its licensees.

Question(s) For Expert Witness

  • 1. What duty does the real estate group have to supervise the appraiser?
  • 2. Are the property owners liable for the acts, errors or omissions of the appraiser or other real estate defendants?
  • 3. Did the appraiser breach any duties?

Expert Witness Response

In this case, a knowledgeable buyer who was aware of market values based on their experience in developing an adjacent subdivision, made a less-than-full-price offer on a property that was not accepted. In response to the rejection, the buyer made a lower offer which was likewise not accepted. The buyer then attempted to force the sale at the reduced price by claiming the real estate licensees had obligations inconsistent with state law and claimed they were responsible for perceived damages he claimed the licensees were liable for that again are clearly inconsistent with the duties and liabilities under state statutes and real estate commission regulations.

Based on state real estate regulations, only the broker in charge has the authority to supervise the licensed activities of the appraiser. In most cases, the property owners are not liable for an act, error, or omission of a real estate licensee that arises out of the licensee relationship.

The appraiser did not breach the standard of care that he owes as a real estate licensee to the property owners, the prospective sellers, in this matter, nor did he breach the standard of care that he owes as a real estate licensees to the prospective buyer.

Based on the evidence available, the real estate group did not breach the standard of care for supervision, given their business association with the appraiser, that they owe to the prospective buyers or sellers.

If the statements made in the published appraisal were false, they would not harm the plaintiff’s business by harming his reputation in the community. The appraisal was posted in a relatively obscure area in the listing in the area that is not available to the public and typically would not be reviewed in great detail by licensees given the age of the appraisal. Additionally the state real estate commission has decided that appraisals are not a material fact for disclosure by sellers. They are a subjective opinion of value.

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