No generic list of general assumptions and limiting conditions in an appraisal report will serve an appraiser better for liability prevention purposes than making these key efforts in the report:

  1. Using precise and narrow intended use and user language.
  2. Describing well the scope of work undertaken for the appraisal in the report and be clear about certain items of work or analysis that you did not do.
  3. Including a few carefully written sentences in plain English with photos, if applicable, to describe special issues or conditions affecting your analysis of the subject property.

With that very important, overarching guidance in mind, the following are edited versions of eight common assumptions and conditions relating to liability matters that I’ve observed to have value in occasional cases. Tailoring such statements to fit individual assignments is encouraged – indeed, The Appraisal of Real Estate (14th ed.) suggests that “general assumptions and limiting conditions should not be treated as boilerplate in the report . . ..”

It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render the property more or less valuable. No responsibility is assumed for such conditions or for obtaining the engineering or other studies that may be required to discover them. Such matters were not part of the scope of work for this assignment.

It is assumed that the property is in compliance with all applicable federal, state and local laws, ordinances, regulations, building standards, use restrictions and zoning unless the lack of compliance is stated in the appraisal report. Determining and reporting on such compliance were not part of the scope of work for this assignment.

It is assumed that use of the land and improvements and their construction is confined within the boundaries or property lines of the subject property and that there are no encroachments or trespasses unless noted in the appraisal report. Determining and reporting encroachments or trespasses were not within the scope of work for this assignment.

It is assumed that all water, sewer facilities and utilities (whether existing or proposed) are or will be in good working order, safe for use, and sufficient to serve the current or proposed uses of the subject property or any structures or other improvements. Determining and reporting on such matters were not part of the scope of work for this assignment.

Unless otherwise stated in this report, the past or current existence of hazardous materials or environmental contamination on, below or near the subject property was not observed or known by the appraiser. The appraiser, however, is not qualified to detect such substances or to make determinations about their presence. The presence of substances such as asbestos, urea-formaldehyde foam insulation, and other potentially hazardous materials or environmental contamination may affect the value of the property. Unless otherwise stated, the value estimated is predicated on the assumption that there is no such material or contamination on, below or affecting the property that would cause a loss in value. No responsibility is assumed for such conditions or for any expertise or engineering assistance required to discover them. The intended user is urged to retain an expert in this field, if desired.

The appraiser has not made any inspection or survey of the property to determine if it is in conformity with the Americans with Disabilities Act (ADA) or similar state or local laws or ordinances. It is possible that such an inspection or survey of the property or an analysis of the applicable legal requirements could reveal that the property is not in compliance with one or more of the requirements of the ADA or similar laws or ordinances. If so, this could have a negative effect on the value and use of the property.

Any cash flows, analyses of estimated income or forecasts of future economic conditions performed for this appraisal or included in this report are predicated on the information and assumptions contained within the report and are not predictions or guaranties of the future. The achievement of any financial projections or forecast relating to the subject property will be affected by fluctuating economic conditions and will depend on other future occurrences that cannot be assured. Actual results will vary from any projections or forecasts stated in this report. The appraisers performing this appraisal do not warrant any projections or forecasts.

And, for the reasons explained in Chapter 8 (Engagement Agreements and Appraisal Terms and Conditions) of my book, an additional statement such as the following in your limiting conditions section can help make your assumptions and conditions statements more enforceable:

Use of or reliance on this appraisal or appraisal report, regardless of whether such use or reliance is known or authorized by the appraiser, constitutes acknowledgement and acceptance of these general assumptions and limiting conditions, any extraordinary assumptions or hypothetical conditions, and any other terms and conditions stated in this report.

The fact that a popular assumption or condition isn’t included above doesn’t mean that it should be discarded for liability-prevention purposes. It’s simply a reflection that the language hasn’t had any recurring relevance in the real-world defense of appraiser negligence claims. If you feel that a certain provision is relevant to your work or if it’ll help you sleep better, then you should include it.