The legislatures in 46 states, the District of Columbia, Guam, the Northern Mariana Islands and the U.S. Virgin Islands are now in session. The legislatures in Indiana, Utah and Virginia have completed their work for the year, and the Louisiana legislature will convene April 12.
The Appraisal Institute’s Washington office continues to work with its chapters, regions and state coalitions to help shape public policy affecting AI professionals and the valuation profession.
Legislative activity this year:
-
California introduced AB 948, legislation that would require licensed appraisers to complete five hours of continuing education every four years on the subject of “elimination of bias.” The bill would also require the Bureau of Real Estate Appraisers to compile demographic data on sellers involved in real estate transactions and on homeowners who file complaints about low appraisals.
-
Florida is considering HB 491 and SB 346, companion bills that would reduce the size of the Florida Real Estate Appraisal Board from nine members to seven. If passed, one seat reserved for a representative of an appraisal management company would be eliminated, as would one public member seat.
-
Illinois is considering two bills: HB 93 and HB 3714.
-
HB 93 would make it illegal for appraisers to “discriminate when preparing a comparative market analysis for residential real estate,” enable an aggrieved party to sue an appraiser in civil court, and make the act of discrimination an actionable disciplinary matter for the Illinois Department of Financial and Professional Regulation.
-
HB 3714 would reauthorize the state’s Real Estate Appraiser Licensing Act. The legislation includes a provision that clarifies when and how a licensed appraiser may provide an evaluation. It also would grant the Illinois Department of Financial and Professional Regulation the power, upon recommendation of the state’s Real Estate Appraisal Disciplinary and Administration Board, to suspend or revoke an appraiser’s license upon a finding in a civil or criminal proceeding that an appraiser has engaged in discrimination. Additionally, it includes a requirement that appraisers teaching in Illinois be licensed in the state. Finally, it clarifies that there is no private right of action for a person to sue an appraiser in civil court for a violation of the Licensing Act.
-
Kansas is reviewing HB 2236, legislation that would authorize appraisers to exclude the sales comparison approach when performing an appraisal of a rural property identified as unique in style or square footage if there are no comparable sales within 30 miles. Financial institutions would not be allowed to decline a mortgage transaction due to the exclusion of the sales comparison approach.
-
Kentucky is considering HB 172, legislation that would require employees of the Kentucky Real Estate Appraiser Board whose job it is to investigate grievances be state-certified general appraisers with a minimum of five years of experience. The bill also clarifies that appraisers in the state are required to comply with the current edition of the Uniform Standards of Professional Appraisal Practice.
-
Maryland introduced HB 1239 and SB 859, companion bills that would create the “Appraisal Gap From Historic Redlining Financial Assistance Program.” The legislation would offer financial assistance to affordable housing developers working in low-income census tracts to help “close the appraisal gaps that occur in historically redlined neighborhoods.” Developers would be eligible to receive funds from the state’s Department of Housing and Community Development to cover any differences in the cost to build or redevelop a residential property and the appraised value of the property.
-
Minnesota is reviewing HF 737 and SF 785, two measures that would allow appraisers to perform evaluations for federally regulated financial institutions. The legislation also would require the state’s Department of Commerce to grant credit for continuing education completed outside of the state but not approved by Minnesota if the education is approved in at least two other states. Finally, the bills would require newly licensed appraisers to complete a continuing education course on valuation bias in the appraisal of real property within two years of receiving their license.
-
Montana is considering SB 144, legislation that would remove a provision in existing law that limits the number of three-year terms that members of the Montana Board of Real Estate Appraisers can serve.
-
North Dakota introduced SB 2101, a measure that would establish $400,000 as the de minimis threshold below which certain state-regulated banks are not required to get an appraisal for a residential transaction. The current threshold is $250,000, and a move to the higher threshold would bring the state in line with federal banking regulations.
-
New Jersey is debating AB 5185, legislation that would prohibit appraisers and appraisal management companies from discriminating in the valuation of residential property on the basis of the race, creed, color or national origin of the property buyer or seller. The legislation also authorizes the state’s Appraisal Board to suspend or revoke a license, certification or registration of an appraiser or an AMC found to have engaged in discriminatory conduct, or to levy a fine or civil penalty against them. Additionally, appraisers and AMCs would be required to provide property sellers with a document informing them of the opportunity to report any suspicion of a discriminatory appraisal.
-
South Carolina introduced HB 3255, a measure that would require appraisal management companies operating in the state to post a $25,000 surety bond. This requirement replaces an existing one that requires AMCs to provide a “detailed statement of current financial condition” or a $50,000 surety bond.
-
The Texas legislature is debating two bills: HB 1939 and HB 2533.
-
HB 1939 would require that civil suits filed against appraisers be done so within the earlier of: 1) two years of the “day the person knew or should have known the facts on which the action is based,” or 2) five years from the day the appraisal or appraisal review was completed.
-
HB 2533 would clarify the ability of state-licensed and state-certified appraisers to perform evaluations for financial institutions.
The Colorado Division of Real Estate is
considering a proposed rule that would allow appraisers who are seeking a license to use Practical Applications of Real Estate Appraisal programs that are approved by the Appraiser Qualifications Board to serve as an alternative to traditional experience requirements. Applicants completing a PAREA program could receive up to 100% of the required experience for licensed appraiser and certified residential credentials, as well as 50% of the experience hours required for the certified general credential.
“By mandating fair housing education, this rulemaking will assist in combating discrimination in real estate transactions and appraisal practices,” the Department of State noted. “The rule therefore advances a compelling public interest of promoting equality and greater accuracy in appraisal reporting.”
The Pennsylvania Board of Certified Real Estate Appraisers on Feb. 25 granted limited credit for completion of Practical Applications of Real Estate Appraisal programs. An applicant for a certified residential credential who has completed a PAREA program would receive credit for 25% of their 1,500 required experience hours, and an applicant for a certified general license would receive 15% of their 3,000 required experience hours.
The Appraisal Institute’s Washington office reported that at least 16 states have incorporated the Real Property Appraiser Qualification Criteria into their statutes by reference, which means that requirements and/or actions accepted by the Appraiser Qualifications Board are automatically required and/or accepted in these states. As such, trainees should also be able to fully utilize completion of a Practical Applications of Real Estate Appraisal program to satisfy the experience requirements for the Licensed Residential and Certified Residential credentials in those states. Additionally, candidates for a certified general credential should be able to utilize completion of an AQB-approved PAREA program to satisfy 50% of the required experience hours.
The states that incorporate the RPAQC by reference are Arizona, Iowa, Louisiana, Michigan, Minnesota, Mississippi, Montana, New Jersey, North Carolina, North Dakota, Oklahoma, Rhode Island, Tennessee, Texas and Vermont.
The Utah Division of Real Estate and the state’s Appraiser Licensing Board are proposing to rescind a
rule put in place last year that allows only trainees and licensed or certified appraisers to provide property inspection reports that include assignment results, such as analyses, opinions or conclusions. The rule also prevents individuals who are not trainees or licensed/certified appraisers from reporting on anything other than physical characteristic of a property.
The Division of Real Estate said that when the rule took effect last year “it generated a great deal of opposition from the appraisal management and banking industries” and that its continuation “would cause serious ramifications to these industries.” They said that rescinding the rule should “prevent any potential harms to the banking and appraisal management industries.”
The Division of Real Estate is accepting public comments on this proposed rule until March 31. Comments can be emailed to
justinbarney@utah.gov.