Illinois Gov. J.B. Pritzker on May 27 signed HB 4410
, legislation creates a real estate valuation task force charged with identifying causes of racial disparities in appraisals and evaluating whether barriers to entry to the valuation profession disproportionately affect minorities. Additionally, it would establish specific definitions for limited or inactive housing markets in which comparable sales are limited or unavailable and would provide greater flexibilities and guidance for appraisals conducted in such markets — such as allowing appraisers to consider market evidence for similar properties in other geographic areas.
Virginia Gov. Glenn Youngkin on April 6 signed SB 284
, making the state the latest to require appraisers to take continuing education related to fair housing and valuation bias. California, Minnesota and New York have similar requirements.
The law will take effect July 1, 2023, and thereafter appraisers will be required to complete at least two hours of continuing education in fair housing or valuation bias courses as a condition for renewing their license every two years.
West Virginia Gov. Jim Justice on March 30 signed HB 4285
, legislation that makes technical changes to the state’s Real Estate Appraiser Licensing and Certification Act. Now, the state appraiser board must provide to individuals whose initial license application or renewal was rejected a written statement within 15 days explaining what qualifications or requirements they failed to satisfy. If an initial license was rejected due to an applicant’s failure to comply with the Uniform Standards of Professional Appraisal Practice in their reports submitted for experience review, the board must provide written guidance regarding the deficiencies and give applicants 60 days to remedy them.
Wisconsin Gov. Tony Evers on March 18 signed SB 341
, which imposes a time limit on civil suits against real estate appraisers. The new law took effect March 20, and applies only to appraisals delivered after that date.
The legislation requires that any action to recover damages from a real estate appraiser for an act or omission in the performance of a real estate appraisal be filed within five years of the date the appraiser submitted the appraisal report to their client. It also provides that if another, shorter statute of limitations applies to the type of claim being pursued, then that shorter statute of limitations applies. Claims of fraud or concealment are excluded from the limitations.
The Appraisal Institute’s Wisconsin Chapter strongly advocated for the passage of this liability protections for appraisers.
Thirty-two states have indicated that they will accept completion of an Appraiser Qualifications Board-approved Practical Applications of Real Estate Appraisal Program, known as PAREA, to satisfy all or part of the experience requirements for individuals to become licensed residential or certified residential appraisers.
PAREA provides another pathway for aspiring appraisers to fulfill their experience requirements by offering practical experience in a virtual environment that combines appraisal theory and methodology in real-world simulations. Current state actions include:
Nebraska Gov. Pete Ricketts on April 18 signed LB 707, legislation that authorized PAREA.
Louisiana is considering SB 367, a bill that would authorize the acceptance of PAREA and also reestablish the state’s licensed residential appraiser credential.
Colorado, Maine, Montana, Ohio and Oklahoma have indicated that they will accept PAREA.
Arkansas, the District of Columbia, Florida, Iowa, Kentucky, New Hampshire, New Mexico, North Carolina, Pennsylvania, South Dakota, Utah and Washington are either actively debating PAREA or drafting proposed rules to authorize its full acceptance.
Arizona, Michigan, Minnesota, Mississippi, New Jersey, North Dakota, Rhode Island, South Carolina, Tennessee, Texas and Vermont fully incorporate the Real Property Appraiser Qualification Criteria into their statutes and regulations. Because PAREA is now part of their criteria, it should be an acceptable path in these states. However, several “incorporation states” are conducting additional discussions regarding PAREA. It’s worth noting that the District of Columbia, Louisiana, Montana, North Carolina and Oklahoma incorporate the criteria, but also have adopted or proposed additional rules or legislation regarding PAREA.
California and Kansas have indicated that they will accept completion of PAREA, but only to satisfy 50% of the experience requirements for licensed and certified residential appraisers.
The legislatures in 30 states, the District of Columbia, Guam, the Northern Mariana Islands and the U.S. Virgin Islands are currently in session. 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.
Colorado is considering HB 1216, legislation that would extend its Board of Real Estate Appraisers for nine years, and would also authorize appraisers to perform evaluations.
Maryland Gov. Larry Hogan is reviewing HB 1097, a measure that would create a task force on property appraisal and valuation equity to study the undervaluation of and valuation errors with property owned by minorities.
Minnesota is considering HF 3784 and SF 3503, companion bills that would enable appraisers to receive continuing education credit for classroom and synchronous distance education completed out of state when the offering has not been approved by the Minnesota Department of Commerce but is approved by appraiser regulators in at least one other state. The bills also would authorize appraisers to complete minimum damage acquisition assignments, known as MDAs, which in Minnesota are akin to valuation waivers that are authorized in federal regulations for obtaining the value of low-dollar-value parcels being acquired through eminent domain.
New Jersey is considering AB 1518 and AB 1519, legislation that would reemphasize the fact that appraisers are prohibited by law from engaging in discrimination on the basis of a buyer’s or seller’s race, creed, color or national origin. It also would require appraisers to provide a property seller with a document informing them on how to report an appraisal they believe to be discriminatory. A similar document would be provided by brokers and salespersons to property buyers.
North Carolina is nearing completion of rulemaking that would adopt PAREA, allow aspiring appraisers to take their first 75 hours of qualifying education online rather than in a classroom and reduce the minimum length of a continuing education offering from three-and-half hours to the Appraiser Qualifications Board minimum of two hours. It also would reduce by half the number of assignments (from 50 to 25) or experience hours (1,500 to 750) where a supervisor must accompany a trainee during an inspection. Additionally, it would allow trainees who are authorized to perform solo inspections to do so on properties farther than 50 miles from the supervisor’s office; currently they must be accompanied by a supervisor on assignments outside a 50-mile radius. Lastly, the rules would implement the AQB’s latest changes regarding distance education.
South Dakota is considering a set of rules that involve the adoption of PAREA and implementation of an experience training program that provides an alternative path for trainees to obtain their required appraisal experience while working under the supervision of a state-employed lead trainer. The proposed rules also would create a NFRT License that would allow a licensee to perform appraisals in instances where a state-licensed or certified appraiser is required — except for federally related transactions. Appraisals completed by a NFRT-licensed appraiser could not be used for experience credit to become licensed or certified. Appraisals for which an applicant wishes to receive experience hours must be performed while the applicant is a state-registered appraiser working with a supervisor.