Two recent cases involving false real estate appraisals have held that the appraisers are liable only to their own clients, and possibly to others whom the appraisers might expect to rely on the appraisals. This general principle may also be of some comfort to lawyers who render opinions for their clients.

In one of the cases, Decatur Ventures LLC v. Daniel, 485 F.3d 387 (7th Cir. 2007), a borrower sued a lender’s real estate appraiser who submitted several appraisals with inflated estimates. The facts of that case could be made into a novel or TV movie. As Chief Judge Frank Easterbrook of the 7th U.S. Circuit Court of Appeals explained it, Michael Stapleton had made Trent Decatur “a terrific offer.” Stapleton had plans to locate “undervalued” homes, arrange to borrow more than 100 percent of the price, and use the surplus to fix up the properties so they could be rented. Stapleton promised to provide the down payment, do the repairs and locate the tenants, and Decatur “could put his foot up on the desk and wait for the rentals to roll in,” so that he could make the mortgage payments. Easterbrook commented: “Like most offers too good to be true, this was not true.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]