Using an Expert Witness in Real Estate Disputes
By Steve Beede, BPE Law Founder / Counsel
On May 5th, I had the privilege of addressing the meeting of the California Real Estate Expert Witnesses Forum, a branch of the California Association of Realtors. This is the third time I spoke to this group on real estate legal issues affecting the real estate profession and the economy. Their key concern, and the topic of my lecture, was the use of Expert Witnesses in legal disputes involving real estate.
WHEN IS AN EXPERT NEEDED
One of the most common issues arising in disputes involving real estate agents, attorneys, and other professionals is proving whether that person’s actions were reasonable or not under the circumstances of the particular case. Typically this means did their conduct breach a “standard of care” in their industry or breach a “fiduciary duty” if in fact one were owed. Because the average person (or jury) would not generally have knowledge of what is reasonable or unreasonable in a certain profession, the law provides for the use of “expert testimony” to provide an opinion on some legal subject which is beyond the common experience of most people.
A person is qualified to testify as an expert if he or she has special knowledge, skill,
experience, training, or education sufficient to qualify them as an expert on the subject to
which their testimony relates. There is no requirement that they be an attorney although that is most common.
SELECTION OF EXPERT FOR REAL ESTATE CASES
In real estate litigation, the skills and knowledge required may often be obtained from either an attorney or a real estate broker since both lawyers and real estate brokers are qualified as a matter of law to negotiate and document real estate transactions. One of the first decisions in a real estate litigation matter is to determine whether the expert should be a lawyer or a real estate broker since both are qualified to testify. This decision is often influenced by the available pool of experts. If the lawyer has a dispute involving a residential real estate matter, and his choice of experts is between an attorney with expertise in non-residential real estate matters, or a real estate broker with expertise in residential real estate matters, the real estate broker may provide more valuable insight than the attorney expert. The broker may be able to provide the attorney with practical insights that the lawyer-expert may not. Assuming, however, that their level of experience is substantially the same, the issue of choosing between a broker and a lawyer will then turn more on issues of credibility and expense, as discussed below. Whom to select as an expert in a real estate transaction involves weighing three elements:
(1) EXPERTISE
The field of real estate is extremely broad with numerous sub-specialties. Therefore, a lawyer handling a matter involving a real estate dispute should only retain an expert who has expertise in that particular area of real estate. For example, it may be inappropriate to use a real estate broker as an expert in a dispute involving commercial real estate when that broker’s expertise is limited to the purchase and sale of single-family residences. The initial threshold to qualify as an expert witness is not difficult to meet, bearing in mind that the definition of an expert is only that they be someone who has “special” knowledge, skill, experience, training or education in a particular subject. This broad definition allows basically any lawyer to testify as an expert in a legal malpractice case or real estate dispute, and virtually any real estate broker to testify in a dispute involving the interpretation of real estate documents or the standard of care of a broker. However, failure to select an expert with specific qualifications renders that expert weak on cross-examination, especially if the other side’s expert has qualifications in those areas. The jury will be instructed to consider those qualifications. If your expert does not measure up to your opponent’s, your client will suffer.
(2) CREDIBILITY
The credibility of experts is greatly predicated on their professional experience. However, experience will not matter if the jury does not believe the expert’s testimony. Two elements come into play when determining that credibility: the qualifications of the expert and the reasonableness of the position that he has taken. A key factor affecting the credibility of the expert is their specific expertise in the area in question. The prestigious lawyer with no real experience in the purchase or sale of residential property will have less expertise than a sole-practitioner real estate broker with twenty years of experience in buying and selling single-family residences in the community where the defendant is located. Faced with a choice of using an attorney or a real estate broker with equal expertise in the area in dispute, juries tend to view the lawyer as the more credible expert witness, both because they may believe the lawyer is more professional and that the broker may have a vested interest in protecting the real estate industry. Since these perceptions are often incorrect, it is important for the lawyer utilizing the real estate broker to emphasis the extent of the broker’s past and continuing education. The attorney must focus on the broker’s real life experience in order to diminish the perceived edge that the lawyer/expert may project in the minds of the jury.
(3) EXPENSE
While every lawyer wants his client to retain the best expert possible, in reality the expert selected is usually the best expert that the client can afford. The choice of the expert has to be tempered by the size of the dispute and the client’s ability to pay. However, it is a slippery-slope to over-emphasize the economic issue and select an expert who is more affordable rather than an expert who is significantly more qualified. The lawyer must carefully document his file that the client understands the impact that selecting the less effective, but less costly, expert may have on the ultimate disposition of the case.
CONCLUSION
The selection of an expert witness in real estate litigation is an important element of the case and one that all too frequently lawyers put off until the last minute, or simply do not give it adequate thought. Selecting an expert should involve more than picking up the directory of experts, thumbing through the appropriate section and picking an expert at random. The lawyer must leave sufficient time to evaluate what type of expert is needed, what qualifications that expert should have to provide effective assistance in the case, and then whether a given expert has those credentials. The selection and utilization of an expert is too important a decision to be made in a haphazard and last minute manner. It is a serious decision that requires care and evaluation.
EXPERT WITNESS USER GUIDE: I sincerely want to thank attorney Lawrence H. Jacobson of Beverly Hills, California who was in the audience at the CREEW meeting on May 5th. Mr. Jacobson has been an inspiration to me and many others who serve or want to serve as Expert Witnesses. His outstanding publication entitled: “Guide to the Use of Expert Witnesses in Real Estate Disputes” is a valuable resource for attorneys and experts alike. He has graciously allowed me to quote from his Guide for this Article.
For over 20 years, the attorneys of BPE Law Group, P.C. have been assisting our clients with their real estate, business, and other legal needs. If you have questions concerning this Article or have need of Expert Witness services, please email Keith at kbdunnagan@bpelaw.com or Steve at sjbeede@bpelaw.com.
This article is not intended to be legal advice, lending advice, or a specific recommendation of any particular lender or company, and should not be taken as such advice.
By Steve Beede, BPE Law Founder / Counsel
On May 5th, I had the privilege of addressing the meeting of the California Real Estate Expert Witnesses Forum, a branch of the California Association of Realtors. This is the third time I spoke to this group on real estate legal issues affecting the real estate profession and the economy. Their key concern, and the topic of my lecture, was the use of Expert Witnesses in legal disputes involving real estate.
WHEN IS AN EXPERT NEEDED
One of the most common issues arising in disputes involving real estate agents, attorneys, and other professionals is proving whether that person’s actions were reasonable or not under the circumstances of the particular case. Typically this means did their conduct breach a “standard of care” in their industry or breach a “fiduciary duty” if in fact one were owed. Because the average person (or jury) would not generally have knowledge of what is reasonable or unreasonable in a certain profession, the law provides for the use of “expert testimony” to provide an opinion on some legal subject which is beyond the common experience of most people.
A person is qualified to testify as an expert if he or she has special knowledge, skill,
experience, training, or education sufficient to qualify them as an expert on the subject to
which their testimony relates. There is no requirement that they be an attorney although that is most common.
SELECTION OF EXPERT FOR REAL ESTATE CASES
In real estate litigation, the skills and knowledge required may often be obtained from either an attorney or a real estate broker since both lawyers and real estate brokers are qualified as a matter of law to negotiate and document real estate transactions. One of the first decisions in a real estate litigation matter is to determine whether the expert should be a lawyer or a real estate broker since both are qualified to testify. This decision is often influenced by the available pool of experts. If the lawyer has a dispute involving a residential real estate matter, and his choice of experts is between an attorney with expertise in non-residential real estate matters, or a real estate broker with expertise in residential real estate matters, the real estate broker may provide more valuable insight than the attorney expert. The broker may be able to provide the attorney with practical insights that the lawyer-expert may not. Assuming, however, that their level of experience is substantially the same, the issue of choosing between a broker and a lawyer will then turn more on issues of credibility and expense, as discussed below. Whom to select as an expert in a real estate transaction involves weighing three elements:
(1) EXPERTISE
The field of real estate is extremely broad with numerous sub-specialties. Therefore, a lawyer handling a matter involving a real estate dispute should only retain an expert who has expertise in that particular area of real estate. For example, it may be inappropriate to use a real estate broker as an expert in a dispute involving commercial real estate when that broker’s expertise is limited to the purchase and sale of single-family residences. The initial threshold to qualify as an expert witness is not difficult to meet, bearing in mind that the definition of an expert is only that they be someone who has “special” knowledge, skill, experience, training or education in a particular subject. This broad definition allows basically any lawyer to testify as an expert in a legal malpractice case or real estate dispute, and virtually any real estate broker to testify in a dispute involving the interpretation of real estate documents or the standard of care of a broker. However, failure to select an expert with specific qualifications renders that expert weak on cross-examination, especially if the other side’s expert has qualifications in those areas. The jury will be instructed to consider those qualifications. If your expert does not measure up to your opponent’s, your client will suffer.
(2) CREDIBILITY
The credibility of experts is greatly predicated on their professional experience. However, experience will not matter if the jury does not believe the expert’s testimony. Two elements come into play when determining that credibility: the qualifications of the expert and the reasonableness of the position that he has taken. A key factor affecting the credibility of the expert is their specific expertise in the area in question. The prestigious lawyer with no real experience in the purchase or sale of residential property will have less expertise than a sole-practitioner real estate broker with twenty years of experience in buying and selling single-family residences in the community where the defendant is located. Faced with a choice of using an attorney or a real estate broker with equal expertise in the area in dispute, juries tend to view the lawyer as the more credible expert witness, both because they may believe the lawyer is more professional and that the broker may have a vested interest in protecting the real estate industry. Since these perceptions are often incorrect, it is important for the lawyer utilizing the real estate broker to emphasis the extent of the broker’s past and continuing education. The attorney must focus on the broker’s real life experience in order to diminish the perceived edge that the lawyer/expert may project in the minds of the jury.
(3) EXPENSE
While every lawyer wants his client to retain the best expert possible, in reality the expert selected is usually the best expert that the client can afford. The choice of the expert has to be tempered by the size of the dispute and the client’s ability to pay. However, it is a slippery-slope to over-emphasize the economic issue and select an expert who is more affordable rather than an expert who is significantly more qualified. The lawyer must carefully document his file that the client understands the impact that selecting the less effective, but less costly, expert may have on the ultimate disposition of the case.
CONCLUSION
The selection of an expert witness in real estate litigation is an important element of the case and one that all too frequently lawyers put off until the last minute, or simply do not give it adequate thought. Selecting an expert should involve more than picking up the directory of experts, thumbing through the appropriate section and picking an expert at random. The lawyer must leave sufficient time to evaluate what type of expert is needed, what qualifications that expert should have to provide effective assistance in the case, and then whether a given expert has those credentials. The selection and utilization of an expert is too important a decision to be made in a haphazard and last minute manner. It is a serious decision that requires care and evaluation.
EXPERT WITNESS USER GUIDE: I sincerely want to thank attorney Lawrence H. Jacobson of Beverly Hills, California who was in the audience at the CREEW meeting on May 5th. Mr. Jacobson has been an inspiration to me and many others who serve or want to serve as Expert Witnesses. His outstanding publication entitled: “Guide to the Use of Expert Witnesses in Real Estate Disputes” is a valuable resource for attorneys and experts alike. He has graciously allowed me to quote from his Guide for this Article.
For over 20 years, the attorneys of BPE Law Group, P.C. have been assisting our clients with their real estate, business, and other legal needs. If you have questions concerning this Article or have need of Expert Witness services, please email Keith at kbdunnagan@bpelaw.com or Steve at sjbeede@bpelaw.com.
This article is not intended to be legal advice, lending advice, or a specific recommendation of any particular lender or company, and should not be taken as such advice.