CHICAGO (Oct. 14, 2009) – The Appraisal Institute, the nation’s largest organization of real estate appraisers, today applauded a new California law that will provide regulation and oversight of appraisal management companies.
“This new law will help to protect both consumers and appraisal professionals in California, and we eagerly anticipate the positive effects it will provide to the state’s real estate market and its residents,” said Appraisal Institute President Jim Amorin, MAI, SRA. “We are grateful to Gov. Schwarzenegger and the California Legislature for enacting this important legislation.”
Senate Bill 237, which takes effect Jan. 1, will require appraisal management companies operating in the state to register with the Office of Real Estate Appraisers. The law also sets forth standards with which an appraisal management company must comply and provides enforcement authority to OREA.
Significantly, the new law requires appraisal management companies operating in the state to identify, and provide contact information for, all officers and directors who own 10 percent or more of the company, as well as for all individuals who perform management functions. These individuals must submit to criminal background checks and may not have had their licenses or certifications as appraisers or a real estate agents or brokers refused, denied, canceled or revoked in any state.
Appraisal management companies, sometimes referred to as AMCs, are business entities that administer extensive networks of independent appraisers to fulfill real estate appraisal assignments on behalf of lenders and other clients.
California’s new law is based heavily upon model legislation the Appraisal Institute developed in conjunction with the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers.
Many provisions of SB 237 are similar to legislation enacted in Arkansas, Louisiana, Nevada, New Mexico and Utah earlier this year. California became the sixth state to enact such a law Sunday when Gov. Arnold Schwarzenegger signed Senate Bill 237 into law.
As many as 15 to 20 additional states are expected to consider similar legislation to regulate appraisal management companies when most states’ legislatures reconvene in January.
To view a copy of the new California law, click here.
The Appraisal Institute is a global membership association of professional real estate appraisers, with 26,000 members and 91 chapters throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Members of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations. For more information regarding the Appraisal Institute, please visit www.appraisalinstitute.org.