Three real estate appraisers are accusing the Chicago-based Appraisal Institute, the country’s largest appraisal organization, of wrecking their businesses by diminishing the value of their professional credentials.
The group, made up of appraisers working in Illinois, Florida and Ohio and calling itself the Appraisers Coalition, has filed a suit in federal court in Chicago seeking damages of more than $17.5 million from the institute.
The lawsuit comes out of the 1991 establishment of the institute through the merger of the American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers, which had been the country’s largest and oldest appraiser organizations.
The plaintiffs are all former members of the Society of Real Estate Appraisers who were designated Senior Real Property Appraisers (SRPA), the highest designation under that organization’s system of classifications. That designation was for appraisers of commercial and industrial as well as all other types of real estate.
The crux of the suit is that actions by the Appraisal Institute since the merger have worked to devalue that designation while promoting a parallel designation, Member Appraisal Institute (MAI), that was given to former American Institute of Real Estate Appraisers members. The designation is important because it is often required by lenders for people doing appraisals of commercial property.
Officially, the Appraisal Institute as part of the merger agreed to recognize both MAI and SRPA designations and promote both appropriately. But an anti-SRPA bias caused SRPA appraisers to suffer “enormous financial loss,” said Kenneth Levin, a Lincolnwood attorney who filed the suit along with Loop attorney Myron Cherry.
The suit says that advertisements put out by the Appraisal Institute after the merger denigrated or omitted mention of the SRPA designation.
Donald Conley, special counsel to Bernard Fountain, the Appraisal Institute’s president, who is named as a defendant in the suit, denied that the SRPA tag had been diminished in value.
He conceded that some advertising had been “inappropriate” but that in the last two years the institute had adopted advertising policies that “leaned over backward to be fair to SRPAs.”
Conley said his group negotiated with the unhappy appraisers for two years before the suit was filed.
The lawsuit says the institute’s requirements constitute “numerous and expensive barriers and hurdles.”
The plaintiffs in the suit are Vincent Solano of Mt. Prospect, Alan Blau of Canton, Ohio, and William S. Buckley of Tampa.
The complaint charges the institute with multiple violations of federal antitrust laws, the Racketeer Influenced and Corrupt Organizations Act, the Illinois Antitrust Act and the Illinois Consumer Fraud and Deceptive Business Practices Act.
