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House of Representatives
Session of 2021 - 2022 Regular Session


Posted: March 19, 2021 01:23 PM
From: Representative Andrew Lewis
To: All House members
Subject: Statutory Limitation for Civil Actions Against Real Estate Appraisers
In the near future I plan to introduce legislation which would establish a statutory limitation on the time in which civil actions against real estate appraisers can be filed following the date the appraisal was performed.

Real estate appraisers have faced lawsuits alleging defects in appraisals that were performed as long as 20 years ago.  These lawsuits are filed after some type of adverse event (i.e., a mortgage default) occurred and a review of the appraisal is performed.  The suits allege that the appraiser’s malpractice or misrepresentation is the reason why the adverse event occurred.  Usually, there is some other reason why the adverse event occurred (i.e., reduction in income, poor underwriting, market fluctuations, etc.). 
Case law in Pennsylvania has established that the current statute of limitations of 4 years on most claims against appraisers (pursuant to 42 Pa.C.S. § 5525) does not begin until the defect in the appraisal is discovered or should have been discovered (the “Discovery Rule”).  Because the alleged defects in an appraisal may not discovered until many years later, there is an almost infinite statute of limitations for claims against appraisers.
This legislation would set a 5-year statute of limitations from the date the appraisal was performed, which would align Pennsylvania law with the Federal Uniform Standards of Professional Appraisal Practice (USPAP) which requires that an appraiser retain a work file for each appraisal for a period of five years after the appraisal was prepared. 

Many appraisers purge their files of all information related to an appraisal after five years.  As a result, it is difficult for an appraiser to defend themselves against a lawsuit that is in relation to an appraisal that was done as long as 15 years ago. 

As most appraisers are small businesses, a lawsuit or disciplinary action, or the threat of one, can be devastating.

I respectfully request your consideration in cosponsoring this legislation.

Introduced as HB1255