 |
> The Appraiser Coach “They are knowledgeable, professional, and understand urgency.” |
When Appraisers Take the Stand
by David C. Wilkes, Esq., CRE, FRICS and Kevin M. Clyne, Esq., CRE
Real estate appraisers have long played an essential role in litigation involving property valuation. Courts frequently rely on experienced valuation professionals to provide independent opinions in disputes ranging from eminent domain and property tax appeals to partnership disputes, lender litigation, insurance claims, and complex commercial real estate matters. In many of these cases, the court depends on the appraiser to translate market evidence into a clear and reliable opinion of value.
In today’s environment, the legal landscape surrounding expert testimony has become more demanding. Courts are applying greater scrutiny to expert methodologies, litigants are increasingly aggressive in challenging valuation opinions, and expert witnesses face growing exposure to regulatory complaints and civil liability. For appraisers who accept litigation assignments, understanding these evolving risks is now an important part of professional practice—particularly for those working in insurance, financial, and risk-management related matters where valuation conclusions can have significant financial consequences.
Courts now routinely evaluate the reliability of expert testimony before allowing it to be presented at trial. Judges often examine whether an expert’s methodology is grounded in accepted appraisal principles and whether those principles were applied appropriately to the facts of the case.
For valuation professionals, this scrutiny frequently focuses on several core components of the appraisal process:
• Selection of comparable transactions
• Support for adjustments
• Highest and best use analysis
• Treatment of market conditions
• Reconciliation of valuation approaches
When opposing counsel challenges an expert appraisal, the issue rarely focuses only on the final value conclusion. Cross-examination is typically built around destroying the appraiser’s credibility, which can take many forms that extend well beyond the ultimate conclusion of value. Instead, the analysis often turns to whether the expert’s reasoning is transparent, whether the workfile supports the adjustments made, and whether the methodology can be clearly explained and defended under questioning, as well as inconsistencies. In litigation and insurance-related disputes alike, a well-documented analytical process is often as important as the final value opinion itself.
(story continues below)
(story continues)
Expert Witness Survival Checklist for Appraisers
1. Before Engagement Acceptance:
□ Confirm the assignment falls within your competency and experience.
□ Confirm you understand the legal dispute and intended use of the appraisal.
□ Identify potential conflicts of interest.
□ Confirm you can maintain independence from the client’s litigation strategy.
□ Confirm you have sufficient time to conduct the assignment properly.
Key question: Would I reach the same conclusion regardless of which party retained me?
2. Engagement Letter Checklist
The engagement letter should specify:
□ The client and intended users
□ The litigation purpose of the appraisal
□ The scope of work
□ Assumptions and limiting conditions
□ If testimony may be required
□ The fee structure for testimony and depositions
3. Workfile Checklist
A well‑organized workfile is the best defense against litigation challenges and regulatory complaints. The workfile should include:
Market Data
□ Comparable sales verification
□ Data sources used
□ Market trend analysis
Comparable Selection
□ Explain comparable rejections
□ Explain rejected alternatives
Adjustments
□ Methodology used to derive adjustments in the appraisal
□ Supporting market data
Highest and Best Use
□ Legal permissibility analysis
□ Financial feasibility considerations
Communications
□ Engagement instructions
□ Relevant communications with counsel
4. Preparing for Deposition and Trial
Be prepared to explain:
□ Why each comparable was selected
□ How adjustments were derived
□ The reasoning behind highest and best use conclusions
□ Why alternative valuation approaches were rejected
□ How the methodology complies with professional standards
5. Reduce Regulatory Complaint Risk
In contentious litigation the losing party may file a complaint with a state appraisal board. To reduce exposure:
□ Maintain complete workfiles
□ Clearly document analytical reasoning
□ Explain the use of methodology with transparency
□ Avoid advocacy language in appraisal reports
□ Adhere to professional standards
Despite the increasing scrutiny applied to expert testimony, demand for valuation experts in litigation continues to grow. Real estate disputes—whether arising from condemnation, partnership conflicts, lender claims, or insurance-related losses—frequently hinge on complex valuation questions. Courts and dispute-resolution forums therefore continue to rely heavily on qualified appraisal professionals to provide objective and well-supported analysis.
At the same time, the expanding legal and regulatory scrutiny surrounding expert testimony means that appraisers must approach these assignments with careful risk management. Thorough documentation, defensible methodology, and clear explanations of the analytical process are essential components of credible expert work.
For appraisers serving in litigation, insurance, or other dispute settings, disciplined documentation and adherence to professional standards not only strengthen the credibility of the testimony but also help reduce exposure to regulatory complaints and legal challenges.
About the Authors
David C. Wilkes, Esq., CRE, FRICS is a Partner with Cullen and Dykman (New York) co-leading the Appraiser Defense and Risk Management Group. He served as Chairman of The Appraisal Foundation and is President of the National Association of Property Tax Attorneys. He is a CRE and FRICS and was the elected RICS Chair of Valuation for the Americas. He is a monthly Contributing Author for Bloomberg Tax and the New York Law Journal. Kevin M. Clyne, Esq., CRE is a Partner with Cullen and Dykman (New York) co-leading the Appraiser Defense and Risk Management Group, and a Contributing Author for the New York Law Journal. He has served as the senior litigation partner on numerous appraisal dispute matters, and has advised institutional real estate stakeholders on every real property asset type. He is a CRE and has argued before the Court of Appeals as well as drafted key legislation to protect client interests. David can be reached at dwilkes@cullenllp.com or (914) 391-0835.