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

question 153

Multiple Choice

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, the company, but not to any potential investors.
• B) A land appraiser owes a duty of care to his client, and to potential investors only if he knows the name of the investor.
• C) The investor might sue the appraiser for "negligent misstatement causing economic loss."
• D) The investor must suffer his own loss, because an investor takes the risk and so must take care.
• E) A person cannot be sued for words that cause loss, only for actions that cause physical injury.

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Definitions:

Balanced Scorecard

A strategic planning and management system used by organizations to communicate what they are trying to accomplish, align the day-to-day work with strategy, and monitor performance against strategic goals.

Balanced Scorecard

A system of strategic planning and management designed to align organizational activities with its vision and strategy, enhance communication both internally and externally, and track the performance of the organization in relation to its strategic objectives.

Eco-Efficiency

An approach that seeks to create more goods and services while using fewer resources and producing less waste and pollution, aligning economic and environmental performance.

Natural Resources

Raw materials and resources that are found in the environment and are used for economic gain, such as minerals, forests, and water.