New Jersey Legislature Adjourns Without Passing Appraisal Discrimination Bills
The New Jersey State Legislature adjourned its 2022-2023 session on January 9 without passing two bills intended to address “discriminatory practices in real estate appraisals.” While both bills passed the state Senate they were not considered in the Assembly. The Appraisal Institute and its New Jersey Chapters worked on these bills for most of the two-year session and were able to obtain several favorable amendments.
While these two bills represented an unwarranted indictment of the profession and the ethical standards that appraisers are sworn to uphold, what was passed by the Senate represented an improved outcome to what was originally proposed given the political realities in the chamber. Early in the legislative process it became clear that defeating these two bills outright in the Senate was not a likely outcome. So, the Appraisal Institute and its New Jersey chapters quickly went to work, engaging bill sponsors and other stakeholders, urging removal and significant modification of the most devastating provisions for appraisers.
The first bill was S777, legislation that would have reiterated in the appraiser licensing and certification law that discrimination in the appraisal of real estate based on a protected characteristic is prohibited and would have also established a process for the adjudication of complaints alleging that appraisers have engaged in discriminatory practices. If the bill had been enacted, disciplinary action would have been meted out by the New Jersey Appraisal Board only after an appraiser was determined by the state’s Division on Civil Rights by a preponderance of the evidence to have engaged in discrimination. The legislation would have also required real estate brokers, salespersons, and mortgage brokers to provide buyers and property owners with a document informing them of their right to report any suspicions of discriminatory appraisal practice.
As originally proposed, S777 contained language that would have required appraisers and appraisal management companies to provide property buyers and owners with the required documentation regarding their rights in relation to discriminatory practices. However, during the committee consideration period, the Appraisal Institute emphasized that it would be impossible for appraisers to comply with such a provision because they and AMCs rarely have direct contact with buyers and owners. AI’s efforts led to the removal of the unfavorable provision.
The second bill was S3317, legislation that would have prohibited prohibit the consideration of protected characteristics during an appraisal and required appraiser licensees to complete a fair housing and valuation bias education course as part of their continuing education. Consistent with established national policy, AI testified in support of the continuing education requirements.
It is very possible that both bills will be reintroduced in the 2024-2025 session which began on January 9, and AI stands ready to further advocate on behalf of the profession if the legislature moves to consider these matters again.