Monday, March 12, 2012

Two Bills With Appraisal Implications: To Governor's Desk

The regular session of the 2012 Florida Legislature wound up on March 9th. Hundreds of bills were considered, but the papers and news sites spent their time watching the usual subjects. Appraiser Active watched several bills with important amendments to Chapter 475, Part II, and implications for Florida Appraisers. After winding their way through committee meetings, analysis by staff, negotiation and amendments, two bills with significant amendments to Chapter 475, Part II were passed by the Florida House and Senate; HB 517 and HB 887. Both are headed to Governor Scott for his signature.


Here are the highlights. 

Probably the most important is the amendment to 475.6245 Discipline of appraisal management companies. Included among the grounds for discipline is this language:
(v) Has required or attempted to require an appraiser to sign any indemnification agreement that would require the appraiser to hold harmless the appraisal management company or its owners, agents, employees, or independent contractors from any liability, damage, loss, or claim arising from the services performed by the appraisal management company or its owners, agents, employees, or independent contractors and not the services performed by the appraiser.
Both HB 517 and HB 887 revise the definition of appraisal management company and appraisal management services.
(c) "Appraisal management company" means a person who performs appraisal management services regardless of the use of the term "appraisal management company," "appraiser cooperative," "appraiser portal," "mortgage technology company," or other term. (d) "Appraisal management services" means the coordination or management of appraisal services for compensation by: 1. Employing, contracting with, or otherwise retaining one or more licensed or certified appraisers to perform appraisal 370 services for a client; or 2. Acting as a broker or intermediary between a client and one or more licensed or certified appraisers to facilitate the client's employing, contracting with, or otherwise retaining the appraisers.
The term "subsidiary" is defined with respect to the relationship between appraisal management companies and banking entities.
(t) "Subsidiary" means an organization that is owned and controlled by a financial institution that is regulated by a federal financial institution regulatory agency.
To comply with the Dodd-Frank Act, an exemption was created for appraisal management companies owned and controlled by a federally regulated financial institution.

Additional amendments require the Florida Real Estate Appraisal Board to adopt standards of practice that "meet or exceed nationally recognized standards of appraisal practice, including standards adopted by the Appraisal Standards Board of the Appraisal Foundation.

Applicants for appraiser registration, certification, or registration as an appraisal management companies must sign a pledge indicating that upon becoming registered or certified, she or he will comply with the standards of professional practice established by rule of the board, including standards for the development or communication of a real estate appraisal.


If signed by the Governor, HB 517 has an effective date of July 1, 2012, and HB 887 will be effective October 1, 2012. Afterwards, the FREAB will certainly be busy working on rules to implement the new provisions.

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