The governors of Minnesota, Oregon and Tennessee signed legislature that establishes statutes of limitations regarding civil lawsuits against appraisers. Appraisal Institute chapters petitioned for creation of these bills, and chapter members lobbied hard for their passage.
Under the new laws, any action to recover damages against a real estate appraiser must be brought within the prescribed time-period. In Minnesota and Oregon, civil actions against appraisers must be brought within six years from when the appraisal was performed. In Tennessee, the time is one year from the discovery of the act of omission giving rise to the action. However, no action can be brought more than five years after the date the appraisal was performed. Additionally, the state appraiser commission cannot consider a complaint for a disciplinary action that relates to an appraisal that was completed more than three years before the complaint was submitted.
These bills are the direct result of lawsuits and administrative complaints filed against appraisers for appraisals performed many years ago. Many of these lawsuits and complaints have been filed by the receivers of failed financial institutions and other entities that purchased the rights to sue appraisers. Most of the appraisals in question were performed during the real estate boom years ago and have now defaulted.
The new laws in each of the five states mostly are consistent with the federal minimum requirements established by the federal bank regulatory agencies in 2015.
Florida Gov. Rick Scott on May 23 signed HB 927
, legislation that makes two significant changes to the state’s appraiser licensing law. The law takes effect Oct. 1.
The first provision defines an evaluation and allows Florida licensed appraisers to perform them. The second provision clarifies that the Florida Real Estate Appraiser Board has the authority to adopt rules allowing for the use of standards of professional practice other than USPAP for nonfederally related transactions.
The Region X Government Relations Committee, under the leadership of Chair Wesley Sanders, MAI, advocated for this legislation, meeting with the state’s Department of Business and Professional Regulation about these two provisions. Additionally, AI professionals in Florida participated in Region X’s ValuEvent on Feb. 14 in Tallahassee, meeting with many legislators to urge support for the provisions.
Minnesota Gov. Mark Dayton on May 11 signed HF 593
, legislation that makes several important changes to the state’s appraiser licensing and certification law, including issues concerning non-compliance with the appraiser licensing law and background checks.
Under the new law, an allegation of non-compliance with the appraiser licensing law that does not rise to the level of being a disciplinary action is not considered to be a formal complaint. This is an important provision because under current law, all allegations of non-compliance — including frivolous accusations — are complaints that must then be reported by the appraiser when asked if the appraiser has ever been the subject of a complaint. The new law will not require appraisers to report allegations that don’t result in a formal disciplinary action. Likewise, minor disciplinary actions are expunged from an appraiser’s public record five years after an appraiser completes any sanctions.
The new law also clarifies that only an applicant for an initial appraiser license must undergo a formal background investigation. Existing credential holders need only disclose at time of renewal if they have been convicted of any crimes involving moral turpitude or that are substantially related to the real estate valuation profession.
Importantly, the new law establishes a six-year statute of limitations on civil actions against real estate appraisers for issues not related to fraud or intentional misrepresentation. The statute of limitations accrues from the date on which the appraisal services are performed or completed.
The Government Relations Committee of the Appraisal Institute’s North Star Chapter was heavily involved in lobbying for the passage of HF 593, which took effect July 1. This major bill is the second one proposed by the chapter that has been enacted into law in the last two years.
OPEN COMMENT REQUESTS
The Appraisal Institute Board of Directors has directed exposure of a proposed statement of policy on evaluations
for input by AI Professionals (AI log-in and password are required). The proposed Statement of Policy states:
The Appraisal Institute (AI) will provide government relations assistance to Appraisal Institute Chapters seeking to change state law to allow certified and licensed appraisers to provide evaluations without complying with USPAP when such is permitted by federal law or regulation provided no such legislation prohibits appraisers to reference appraisal-related designations when performing such services. AI Professionals providing these services shall comply with the AI Standards of Valuation Practice and the Code of Professional Ethics. The Appraisal Institute will continue with any legislative efforts already underway on this issue.
Send comments on the proposed policy via e-mail to email@example.com
. Comments are due within 30 days of the exposure draft’s distribution. Comments will be compiled for distribution to the Government Relations Committee and the Board of Directors.
The Public Company Accounting Oversight Board is seeking comment on two proposals. Comments for both are due Aug. 31.
The Mortgage Industry Standards Maintenance Organization released a second public comment period for a proposed data standard
for the exchange of rent roll information on commercial property. The proposed standard is designed to provide a consistent set of data points and definitions for use in financing and managing commercial property assets. Comments to MISMO are due July 28.