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

question 13

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

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Definitions:

Conceptualizing Balance

The process of creating a harmonious or balanced framework for understanding or analyzing a concept or phenomenon.

Stable Constructs

Psychological attributes or traits that are consistent and enduring over time, showing little variation across situations or in response to interventions.

Midrange

Theories or concepts that operate at an intermediate level of abstraction, bridging the gap between grand theories and specific empirical instances, often in the context of social sciences.

Self-fulfilling Prophecy

A phenomenon where an initially inaccurate expectation leads to actions that cause the expectation to come true, thereby confirming its own accuracy.