3rd October 2018

California Law Eases Intended User Restrictions for Some Appraisals

posted in Appraiser News |
Image result for california symbolsCalifornia Gov. Jerry Brown on Sept. 29 signed SB 70, legislation that allows the state’s appraisers to name intended users other than a client in a restricted appraisal report.
State-certified real estate appraisers in California are required to comply with the Uniform Standards of Professional Appraisal Practice and therefore cannot provide a restricted appraisal report in situations where it may be shared amongst intended users other than the client or clients who engaged the appraiser. Examples include attorney/adviser, accountant/auditor and a taxing authority.
When SB 70 takes effect Jan. 1, state-certified real estate appraiser in California will be able to produce a restricted appraisal report that identifies one or more intended users in addition to the client. The appraiser must first obtain the client’s consent, and the intended use of the appraisal cannot be for A) a mortgage lending transaction engaged by a federally regulated bank, B) the purchase or refinance of a residential dwelling of one to four units or C) a broker investment transaction, where users may not be well enough versed in the subject matter to properly understand information contained in a restricted appraisal report.
Additionally, appraisers producing a restricted appraisal report that names multiple intended users must clearly identify all users and state that the opinions and conclusions set forth in the report may not be properly understood without additional information in the appraiser’s work file. It also must be stated that there may be assumptions in the restricted appraisal report that the appraiser has not verified and that could impact the appraised value of the subject property.
The law likely will most benefit appraisers engaged for tax appeals, financial reporting and estate and tax — the types of assignments where users of the appraisal services are informed enough to understand a restricted appraisal report but do not need all the information and analysis required for an appraisal report.
The Appraisal Institute sees SB 70 as a commonsense measure that allows appraisers to better meet client needs and to compete with unlicensed service providers who are not subject to the same limitations to appraisal report provisions. It also might encourage more real estate valuation professionals to become state certified since the scope of services they can provide will no longer be arbitrarily restricted.
The provisions in SB 70 will expire Jan. 1, 2020 unless further extended by the California legislature.
The legislation was sponsored by Sen. Patricia Bates (R-Laguna Niguel) and strongly supported by the Appraisal Institute’s California Government Relations Committee, which consists of the state’s five AI chapters.
https://www.appraisalinstitute.org/ano/california-law-eases-intended-user-restrictions-for-some-appraisals-/

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