Saturday, August 10, 2013

Standards of Practice for Appraisal Management Companies - Florida Rule

The regulation of Appraisal Management Companies became law in Florida July 1, 2011. There were efforts to delay implementation of the law, and additional amendments enacted in 2012 clarified a few points and definitions related to Appraisal Management Companies. The most important 2012 amendments covered Discipline of Appraisal Management Companies. Those became law October 1, 2012.

Shortly after October 1, 2012, the Florida Real Estate Appraisal Board started drafting a rule to implement the new amendments. The effort was spearheaded by FREAB member Mike Rogers. The meetings, attended by individuals representing appraisers and appraisal management companies, were often contentious. Although there was give and take, the appraiser members of FREAB stood fast, and some important provisions were included in the new rule, 61J1-9.002 - Standards of practice for Appraisal Management Companies; Development and Communication of Real Estate Appraisals.

There are over 180 AMCs registered in Florida. The rule is effective June 26, 2013. The full text of the rule is at the link above, and after the jump in this post. Here are a few highlights:

(1) Upon issuance of a registration number by the Department, an appraisal management company shall disclose its issued registration number on each solicitation for engagement and each engagement letter utilized in assigning an appraisal request for real estate appraisal assignments in Florida.
(3) Before or at the time an appraiser accepts an assignment, the appraisal management company shall require the appraiser to declare in writing or via electronic means that the appraiser receiving the assignment is a competent appraiser for the performance of the appraisal being assigned.
(4) An appraisal management company must include instructions to appraisers in letters of engagement to decline the assignment in the event the appraiser is not geographically competent or the assignment falls outside the appraiser’s scope of practice restrictions.
(5) An appraisal management company cannot:
 (a) Require that an appraiser prepare an appraisal if the appraiser, in the appraiser’s own independent professional judgment believes that she or he does not have the necessary expertise for the assignment or for the specific geographic area and has notified the appraisal management company and declined the assignment;
(b) Require that an appraiser prepare an appraisal within a time frame that the appraiser, in the appraiser’s own professional judgment believes does not afford he or she the ability to meet all the relevant legal and professional obligations, and the appraiser has notified the appraisal management company and declined the assignment; or
(c) Require that an appraiser provide the appraisal management company with the appraiser’s digital signature or seal.
(9) Each solicitation for engagement by an appraisal management company for an appraiser’s services must include the following items:
 (a) The name of the AMC; (b) Appraisal management company’s registration number; (c) If the assignment is retrospective the effective date must be provided; (d) The specific intended use; (e) Type of value; (f) A description of the reporting level expected; (g) The identification of the subject to include the property address, county, property type and property rights as requested by the client; (h) Point of contact for discussion of conditions and scope of work; (i) Other assignment conditions; (j) The expected delivery date; and (k) The terms of payment to the appraiser unless otherwise in a contract.

Full text after the jump.