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Committee advances bill limiting long-late lawsuits against real estate appraisers
Summary
The Business, Labor & Employment Committee moved SB 35 to the Committee of the Whole after sponsors and stakeholders described a revised measure that would bar stale lawsuits against appraisers after a five-year record period while preserving exceptions for fraud, discrimination and similar misconduct.
The House Business, Labor & Employment Committee on Thursday advanced Senate Bill 35, a measure aimed at protecting real estate appraisers from protracted lawsuits while preserving consumers’ rights in cases of fraud or discrimination.
The bill sponsor, Representative Clifford, told the panel the measure grew from work last year on appraiser regulation and responds to litigation practices that arose after the 2008 housing crash. Clifford said lenders and secondary-market purchasers sometimes pursued appraisers many years after a report was produced and that appraisers retain work files only five years under current record-retention rules.
Supporters in the appraisal profession said a five-year statute of repose aligns with the federal and industry five-year work-file retention period and would reduce the risk that appraisers face suits a decade after completing a report. Brett Wilkerson, a certified general real estate appraiser, testified that entities have sued hundreds of appraisers long after the records were available, citing a plaintiff strategy of acquiring legal rights to sue on distressed loans.
Representatives of the Colorado Trial Lawyers Association (CTLA) and the Colorado Mortgage Lenders Association told the committee they had worked with bill proponents to remove an earlier provision that would have cut off some consumer claims too soon. CTLA’s witness said the current draft sets a clear five-year clock that begins when the appraisal is completed and sent, while preserving exceptions for fraud, misrepresentation or discrimination.
Committee members had no amendments and voted to move the bill to the Committee of the Whole with a favorable recommendation. The motion was carried by voice and a recorded tally of 12 yes, 0 no and 1 excused was read when the clerk called the roll.
Proponents described the bill as a balance: giving appraisers protection from very stale claims while allowing homeowners and mortgage originators to pursue legitimate claims within a reasonable timeframe. Opponents were not recorded in formal opposition at the hearing; several appraisal-industry witnesses testified in favor or neutrally expressing that the revised language reflected stakeholder negotiations.
The committee action is procedural: advancing the bill to the Committee of the Whole does not finalize policy but is the next step in the chamber’s consideration.
