FREAB Meeting - February 5, 2018 - EVALUATIONS!!

The Florida Real Estate Appraisal Board will have their first meeting of 2018 on Monday, February 5, 2018. The FREAB meets in Suite N901 (ninth floor) at 400 West Robinson Street, Orlando, FL. The meeting starts at 8:30 AM.

The legal agenda is light; only four cases are on the docket. All involve consideration of a Settlement Stipulation by the FREAB. Nevertheless, there is always a chance something interesting will be discussed, and a learning opportunity will result.

Things are bound to get interesting around 1:00 P.M. At that time the board is scheduled to take up a Discussion of Evaluations. This discussion was prompted by amendments to Chapter 475 Part II as a result of HB 927, passed by the 2017 Florida Legislature, and signed into law by Governor Rick Scott. The amendments became effective October 1, 2017.

There is plenty to say about the amendments, and the attempt to soften standards applicable to the services provided by Florida Appraisers. Rather than reproduce everything here, Appraiser Active suggests you take a look at the documents to be considered by the FREAB, including the comment letter from yours truly. CLICK HERE. My comments start on page 29 of the pdf.

If you have a chance to attend the meeting and weigh in, I'm sure the FREAB will welcome you comments. If not, the meeting will be live streamed. TUNE IN and hear the conversation and how the board decides to proceed. If thee TUNE IN link above does not direct you to the GoTo meeting page, use this LINK and click on live stream.

Two New Florida Bills - Amendments to Chapter 475

Two nearly identical bills have been filed for the 2017 Session of the Florida Legislature. On the House side, HB 927 was filed by Rep. Bob Rommel on February 21, 2017. Senator Kathleen Passidomo filed SB 716 of February 16, 2017. The bills are nearly identical, and appear to be attempts to amend Chapter 475, Part II to conform with the Final Rule on Minimum Requirements for Appraisal Management Companies. 

The major difference in the bills appears to be:

• The Senate Bill requires AMC compliance with the Truth in Lending Act (customary and reasonable fees). The House Bill does not have the same language. (see lines 503 - 505 of SB 716).
• The House Bill tightens up the restrictions on registration of AMCs by removing the FREAB's discretion to grant registration "after a lapse of time and subsequent good conduct and reputation" for individuals (officers, directors, general partners, managing partners, owners, or persons with 10% or more ownership interests) associated with an AMC applicant. (see lines 297 - 300 of HB 927). The Senate Bill deals with applicants in Section 475.6245 - Discipline of appraisal management companies, and grants the FREAB discretion to deny an application or renewal in the event the above named individuals is guilty of or committed listed violations. (see lines 306 - 323 and 332 - 505 of SB 716).

The filed bills each limit the responsibility of AMCs to their activities related to "covered transactions" or appraisals for "secondary mortgage market participants". This is troubling as the "covered transaction" is means a consumer credit transaction secured by the consumer's principal dwelling. (See lines 154 -155 HB 927 and lines 157 - 158 SB 716).

Language repealing the Post License Education Requirement for Registered Trainee Appraisers is in both bills. As a result of the most recent Appraiser Qualifications Board Real Property Appraiser Qualification Criteria, the post license education requirement had outlived its usefulness. It was confusing to licensees, costly for course providers, and is an unnecessary barrier for trainee appraisers. 

We've got a starting point, and can expect some amendments. Give the bills a close look and let me know what you think. I'll try to keep up with them when they start going through the committee process.

Florida Governor Scott Signs Two Appraisal Related Bills

Within the past ten days, Florida Governor Rick Scott inked his name to two appraisal related bills.

One June 7, 2013, CS/CS/HB 667 was signed into law. The bill amends Chapter 475 Part I and Part II. Of course, the amendments to Chapter 475, Part II affect Florida Real Estate Appraisers. The first change removes Licensed Appraisers from those permitted to supervise Registered Trainee Appraisers. The other significant amendments to the real estate appraiser licensing and certification law recognizes the new Real Property Appraiser Qualification Criteria adopted by the Appraiser Qualifications Board December 11, 2011. Education requirements have been enhanced, and the Florida background check information for new applicants has been modified to comply with the AQB "way". The enrolled version of the bill is at this LINK.

CS/SB 1398 was approved by the Governor June 14, 2013. This bill amends Chapter 475 Part II to authorize the Florida Real Estate Appraisal board to approve qualifying education courses completed by applicants for registration as a trainee or certification as a residential appraiser or general appraiser to be completed through distance learning. This is a major change for Florida. Although the FREAB accepts continuing education completed through distance learning, prior to this amendment, all qualifying education had to be accomplished in a classroom setting. It will take a while for the FREAB to adopt the rules to implement this amendment, and for schools to obtain the required approval for courses, but appraisers seeking qualifying education will soon have an option to the traditional classroom setting. The enrolled version of the bill is at this LINK.

Florida Appraisers - Rule Amendment: Supervision and Training or Trainee Appraisers

For the past several meetings the Florida Real Estate Appraisal Board has been discussing amendments to rules, and language for new rules to implement the sections of Chapter 475, Part II relating to Appraisal Management Companies. The AMC rules are still in the works, but the FREAB has finalized their language for 61J1-4.010 Supervision and Training of Registered Trainee Appraisers. The new language has an effective date of June 3, 2013.

Some of the changes are significant, and Florida Appraisers involved in the supervision of Registered Trainee Appraisers should be aware of some new responsibilities.

1. Licensed Appraisers are no longer permitted to supervise Registered Trainee Appraisers. Only Certified Residential Appraisers and Certified General Appraisers may supervise.
2. Supervisory Appraisers must accept "full and complete" responsibility for "any research, data collection, development, analysis, or communication of any appraisal review or the appraisal report by signing and certifying the report is in compliance with USPAP."
3. The Supervisory Appraiser must personally inspect each appraised property with the trainee "for a minimum of the first twelve months of the registered trainee's initial registration, and thereafter" until the trainee is competent in accordance with the Competency Rule of USPAP.
4. A Registered Trainee Appraiser "may not sign an appraisal certification within the first twelve months of his or her registration as a trainee appraiser."
5. A Supervisory Appraiser must included the following statement in any report in which the registered trainee appraiser contributed to the development of the appraisal or the writing of the appraisal report:

I, the supervisory appraiser of a registered appraiser trainee who contributed to the development or communication of this appraisal, hereby accepts full and complete responsibility for any work performed by the registered appraise trainee named in this report as if it were my own work.

Many Supervisory Appraisers must make some drastic changes to their practice to assure compliance with the requirements of the rule. At the very least, each and every appraisal completed with the assistance of a Registered Trainee Appraiser must have the paragraph above to acknowledge responsibility for the work of the trainee.

By all means, take the time necessary to read, understand, and implement the rule.

Full version at this LINK.

Two New Appraisal Related Bills Filed in Florida

The Florida Legislative Session does not start until March 5, 2013, but State Representatives and Senators have been filing bills in advance. Two have been filed with implications for Florida Appraisers, and those expecting to file applications to become registered or certified appraisers in the Sunshine State.

One was filed in the House, and one in the Senate. In the House, it's HB 667 - Real Estate Brokers and Appraisers. On the Senate side, it's SB 852 - Real Estate Brokers and Appraisers.  The bills are identical and intended to amend Chapter 475, Part II to mesh with new requirements imposed by the Appraiser Qualifications Board of the Appraisal Foundation. One of the amendments requires a Supervisory Appraiser to be either a Certified Residential Real Estate Appraiser or a Certified General Real Estate Appraiser. If passed and signed into law, Licensed Appraisers will no longer be able to supervise Registered Trainee Appraisers.

An interesting provision in the bill amends Chapter 120, F.S. to require Summary Hearings by the Division of Administrative Hearings for cases involving real estate appraisers. I have a lot to learn about this process and am anxious to learn how this amendment was proposed. Watch this space for updates as details emerge.

New Laws, New FREAB Members

The Florida Real Estate Appraisal Board held their regular meeting in Orlando April 2 and 3, 2012. This was the first meeting for newly appointed Certified Residential member Matthew Simmons. Matt is a REALTOR® and the Residential Manager for Fort Myers based Maxwell & Hendry Valuation Services, Inc.

The Governor made additional appointments to the FREAB just prior to the April meeting. The current Chair, Evalyn (Fran) Oreto, was appointed to fill one of the Appraisal Management Company positions, and Certified General Appraiser, Mike Rogers, was appointed to a second term. Although she did not attend the April meeting due to the late date of the announcement, Governor Scott also appointed Tamara Jones McKee to fill the vacant Consumer spot on the FREAB. These appointments fill all the vacant positions on the FREAB. 


For fans of Burn Notice, Tamara Jones McKee might be familiar!

The FREAB considered over 20 disciplinary cases. At least six involved a voluntary surrender of license for permanent revocation.

One of the most interesting discussions involved the board developing an answer to a question about out of state reviewers of appraisal reports; must they be licensed in Florida? Although the FREAB did not issue a formal declaratory statement, the consensus made it clear they believe providing appraisal services related to a property in Florida requires registration, license or certification in the Sunshine State.

In addition to making appointments to the Florida Real Estate Appraisal Board, the Governor signed two important bills into law. HB 887 and HB 517 were signed into law on April 8, 2012. HB 887 is effective October 1, 2012, and HB 517 is effective July 1, 2012. There are some important chances to Chapter 475, Part II in both. Most notably, HB 887 establishes discipline if an Appraisal Management Company:

(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.

AMC Independence Clipped in Florida - July, 2011

Despite the efforts of the Florida Legislature and Appraisal Management Companies, the regulation of Appraisal Management Companies became effective July 1, 2011. The Florida Real Estate Appraisal Board posted the following on their site:

Regulation of Appraisal Management Companies – Effective July 1, 2011

On July 21, 2010 President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act requires State regulatory agencies to regulate Appraisal Management Companies (AMC). Florida’s regulatory program for AMCs was created in 2010 when House Bill 303 was signed into law. It became Chapter 2010-84 and amends Section 475, Part II, Florida Statutes..

The Department of Business and Professional Regulation has added information about the registration and regulation of Appraisal Management Companies to their FAQ site.

FS 475.6235 states in part, A person may not engage in appraisal management services for compensation in this state advertise or represent herself or himself as an appraisal management company, or use the titles appraisal management company, appraiser cooperative,appraiser portal, or mortgage technology company, or any abbreviation or words to that effect, unless the person is registered with the department as an appraisal management company under this section. However, an employee of an appraisal management company is not required to obtain a separate registration.

Additional guidance answers the question: Should I close my business while waiting for my license to be issued?

As of July 1, 2011, it is essential for an appraisal management company to immediately file an application to register with the Department; however, you can continue to operate while the Department and/or the board is considering your application for approval. Once approved, you will receive your license in the mail. An application that is denied must comply with the terms of the Final Order issued by the board.

The Department of Business and Professional Regulation, Division of Real Estate, and the Florida Real Estate Appraisal Board continue to develop the program to meet the needs of our customers. Please refer to the FAQs for AMCs and check back for more information weekly.

As of today online registration is not available. A printable application is available HERE.

There's bound to be some growing pains, but the regulation of AMCs is great for Florida consumers and real estate appraisers. Thanks to the Director of the Division of Real Estate, Juana Watkins, and her staff for putting in the extra hours to make sure the information and applications were available on the effective date of the law. Great Job!