We all get rushed occasionally and make a mistake. If we’re lucky, it amounts to nothing more than a “warning shot” cautioning us to slow down and take care. Once in awhile we’re not so lucky and the consequences of a lapse in attention turn out to be serious and long term. This is such a case.

Many appraisers and inspectors have taken on or are thinking about adding a trainee to their firm to help meet demand. If you do, this story illustrates why you ought to make time to oversee their work properly. If you have a newbie under your wing, consider this your warning to slow down and take the responsibility seriously.

This particular case involves an appraiser. The problem appraisal occurred in the spring of 2000, with the case being resolved by the state appraisal board just recently, nearly one year after the complaint was filed. The trainee in question is now licensed and no longer works for the supervising appraiser. The initial complaint was filed against the trainee but it’s his/her ex-supervisor who is now paying the cost.

According to the supervising appraiser, who wishes to remain anonymous (we’ll call him Jim), the trainee took the photos and completed the research and measurements. There were some typos in the report and a mistake made by the trainee on the square footage, none of which the supervisor caught.

“But I did see some red flags regarding the comps, so I asked (the trainee) if he/she had verified the sales data with the seller or buyer,” Jim said. “They said they had. I did not check it myself. They had been working for me for several years so I trusted them.”

According to Jim, the mistake did not affect the other comparables but the bank claimed it led to an overvaluation of the property. When the bank foreclosed it filed a complaint with the state Board. As is often the case with complaints against trainees, the supervising appraiser was pulled in.

“Apparently (the trainee) blamed me for the mistake. When I first responded, I was unfamiliar with the process and made some mistakes in dealing with the Board. To make matters worse, the attorney I hired stepped on a few toes (at the Board) which made everything harder.”

In the end, Joe accepted a consent order, paid a fine and completed coursework. The trainee was given an essay to write, according to Joe.

When it Rains it Pours
But the story is not over. Recently, an additional investigation was opened against Joe involving an appraisal completed by another ex-trainee who is being investigated for flipping/fraud by the local police and the FBI, according to Joe.

Because of the previous consent order on his record and the “bad blood” at the Board, Joe fears the worse. At this writing, he is unable to obtain E&O coverage at any price due to multiple disciplinary actions now on his record, which has cost him work.

Once the disciplinary action is resolved, the Liability Reporter will bring you the complete story. For more on consent orders see “Consent Orders: Signing Away your Rights?” in the June 2003 edition of Working RE Magazine (http://www.workingre.com/workingre/library-previous-edition-2.htm).