A land appraiser prepared an appraisal of a property for a real estate development company.The appraiser had been told that the appraisal would be used by the company to attract potential investors.Because the appraiser forgot to check the recent changes in the zoning by-laws,the appraisal was not accurate; the investor,a party unknown to the appraiser,was misled about the value of the land and,consequently,suffered a financial loss.On these facts,which of the following is true?
A)A land appraiser owes a duty of care to his client and to potential investors only if he knows the name of the investor.
B)The investor may sue the appraiser for negligent misstatement that resulted in economic loss.
C)The investor must suffer his own loss,because an investor takes the risk and so must take care.
D)A land appraiser owes a duty of care to his client and the company,but not to any potential investors.
E)A person cannot be sued for words that cause loss,only for actions that cause physical injury.

Question

Quizplus · Accepted Answer

The appraiser owes a duty of care to both the client and any potential investors who may reasonably rely on the appraisal for investment decisions. The fact that the investor is unknown to the appraiser does not negate this duty. The investor may sue the appraiser for negligent misstatement resulting in economic loss. Options A, C, D, and E are incorrect because they do not reflect the legal duty of care owed by a professional appraiser in this scenario.

A Land Appraiser Prepared an Appraisal of a Property for a Real