The New Jersey Real Estate Appraiser Board is being sued in the U.S. District Court for New Jersey by two Pennsylvania appraisers who allege that disciplinary actions taken against them for violations of the Uniform Standards of Professional Appraisal Practice are unconstitutional pursuant to the due process provisions of the Fifth and Fourteenth Amendments.
The plaintiffs allege that their rights were violated when the board delegated to private individuals free from government oversight the task of establishing standards of conduct for appraisers. They also allege that their rights to due process were violated when the board of private individuals — who they noted are competitors — enforced the standards of conduct without themselves abiding by those same standards.
The legislatures of 39 states plus the District of Columbia and Puerto Rico currently are in session — and a few states have already concluded their 2019 sessions.
The Appraisal Institute’s Washington office continues to work with chapters, regions and state coalitions to help shape public policy affecting AI professionals and the valuation profession.
Legislative activity this year has included:
Alabama (HB 304
) Louisiana (HB 340
) and Oregon (SB 109
) are considering bills that will amend appraiser licensing laws so that appraisers can perform for financial
institutions evaluations that do not comply with the Uniform Standards of Professional Appraisal Practice when not required by federal law. If the laws pass in these states,
they will join Florida, Georgia, Illinois, Indiana, Tennessee, Utah, and Virginia in allowing appraisers to perform these services.
• Statutes of repose
Illinois (HB 2963
), Louisiana (SB 191
), Rhode Island (HB 5773
) and Texas (SB 939
) are considering statutes of repose that would limit the time frame an appraiser could be sued civilly or have disciplinary action taken against them following the completion of an evaluation.
These efforts build upon statutes recently enacted in Minnesota, Oregon and Tennessee, and upon preexisting statutes of repose in Kentucky, North Carolina and South Dakota.
A statute of repose bill (HB 1015
) was introduced in Washington, but it’s still pending in committee. Massachusetts is considering legislation (HB 216
) that would allow only clients and intended users to sue appraisers. Oregon is considering legislation (HB 3218
) that would shorten to five years its existing statute of repose, and to make it applicable to disciplinary actions.
• Minimum appraiser qualifications
Many states are rewriting their appraiser licensing laws (statutes and regulations) because of changes to the Real Property Appraiser Qualification Criteria that took effect in May 2018. This is the fourth major rewrite of the criteria since it was established by the Appraisal Standards Board in 1991. Some states are implementing all changes, while others are only implementing changes related to college-level education requirements and not to the number of required experience hours.
• Appraisal management company oversight and regulation
Massachusetts is the only state without comprehensive regulation of appraisal management companies; however that’s likely to change this year with the introduction of HB 1114
. Also without comprehensive AMC regulations: the District of Columbia and some U.S. territories.
Many states have enacted legislation to bring their existing AMC laws into compliance with the federal minimum requirements, including Arizona (SB 1333
), Arkansas (SB 393
), Colorado (SB 46
), Georgia (HB 192
), Maryland (SB 69
; SB 20
), Mississippi (SB 2697
; SB 2451
), Nebraska (LB 77
), New Mexico (SB 56
), North Dakota (SB 2075
), West Virginia (SB 597
) and Wyoming (SF 83
Other actions of note:
• The Appraisal Institute on Jan. 31 submitted testimony to Florida Gov. Ron DeSantis as part of his “Deregathon,” asking him to urge the Florida Real Estate Appraisal Board to finalize implementation of the evaluations law enacted in 2017.
• The Illinois Department of Financial and Professional Regulation cautioned in its February IllinoisAppraiser newsletter that a “hybrid” appraisal assignment that used “filtered data,” such as room count and improvement in property quality/condition and size, among other things, “needs to come from a licensed appraiser.” The publication noted, “If it is clear that unlicensed inspectors are providing filtered data to appraisers, an appraisal service, then AMCs have breached this section of the Act and are subject to enforcement action.”
• Legislation under consideration in Iowa (HF 502
) would allow out-of-state appraisers to practice in state without obtaining an Iowa credential or a temporary practice permit. Appraisers who invoke the “practice privilege” (with the exception of out-of-state reviewers) may not refer to themselves as “certified appraisers” or otherwise give the impression that they are certified in the state without obtaining an Iowa license.
• Legislation under consideration in Oklahoma (SB 737
) would add certified appraisers to a group of occupations that provides “professional services” for the purposes of state contracting. Doing so would make it easier for state agencies to contract with the most competent and qualified appraisers.