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October 06, 2021

New California Appraiser Requirements Focus on Bias

California Gov. Gavin Newsom on Sept. 28 signed into law AB 948, legislation that contains multiple provisions related to appraisal bias. Beginning July 1, 2022, all residential sales contracts must include a statement promising that appraisals are unbiased and not influenced by improper or illegal considerations. Refinance transactions must include the same statement in loan documents provided to borrowers.
 
Additionally, the state’s Bureau of Real Estate Appraisers must change its complaint form to include a way for individuals to note their belief that their appraisal was below market value; BREA is required to collect data regarding complaints that allege low valuations and report its findings to the state legislature on or before July 1, 2024.
 
Further, the legislation makes it a violation of licensing law for appraisers to base their opinions of value on any of the generally recognized protected characteristics and makes it a violation of the California Fair Employment and Housing Act for appraisers to discriminate on the basis of any of the generally recognized protected characteristics. Beginning Jan. 1, 2023, appraiser pre-licensing education must include one hour of instruction in cultural competency while continuing education must include two hours of elimination of bias training and one hour of cultural competency instruction. 
 
“We applaud Gov. Newsom for signing AB 948, which will require real estate appraisers to complete qualifying and continuing education in cultural competencies and the elimination of bias,” said Appraisal Institute President Rodman Schley, MAI, SRA. “The Appraisal Institute recognizes that unconscious bias is human and exists in various forms, and no profession is immune from it. We need to educate ourselves about potential bias and how to interrupt it, and the state of California is taking a great step in ensuring this happens. Creating a more equitable housing environment is a top priority for the Appraisal Institute, and we will continue to work with the state of California and other states to identify solutions that will effect positive change.”

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