Legal Question in Real Estate Law in California

real estate appraisal collections

can r.e. appraiser, sue homeowner for sfr appraisal performed for mortgage application? loan was made based on appraisal. however, broker goes bankrupt and does not pay appraiser. example, is this similar to paying pool contractor for subcontractor work, and he doesn't pay subcontractor who then files for a mechanic lein on the subject property.


Asked on 3/23/07, 12:16 pm

1 Answer from Attorneys

Anthony Roach Law Office of Anthony A. Roach

Re: real estate appraisal collections

The appraiser can only sue the homeowner for breach of contract if the homeowner hired the appraiser. That happens in situations where an informed homeowner wants to enter the market with an appraisal, or there is a dispute among tenants in common as to buy out value during a partition.

When an appraiser conducts an appraisal pursuant to a request from a prospective lender, that appraiser has been hired or "engaged" by the lender. In other words, the lender owes no duty to its borrower in appraising the borrower's collateral (the real estate) because the lender is simply satisfying itself that the collateral is sufficient security for the loan. (Nymark v. Heart Fed. Sav. & Loan Ass'n (19991) 231 Cal.App.3d 1089, 1096.)

In a situation like this, you would not be able to sue the appraiser for misrepresentation, so I fail to see how the appraiser can sue you when the mortgage broker or lender did not pay the appraiser. I am unaware of any authority that a real estate appraiser is entitled to a mechanic's lien either.

Very truly yours,

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Answered on 3/23/07, 1:36 pm


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