§ 40-60-440 — Unprofessional conduct by employees, directors, or agents of appraisal management companies.

(A) It is unprofessional conduct for an employee, director, or agent of an appraisal management company registered pursuant to this article to influence or attempt to influence the development, reporting, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in another manner, including: (1) withholding or threatening to withhold timely payment for an appraisal, with the exception of an appraisal noncompliant with the written terms of the agreement; (2) withholding or threatening to withhold future business from certified or licensed appraisers, who are independent contractors, or demoting, threatening to demote, or terminating certified or licensed appraisers, who are independent contractors; (3) expressly or impliedly promising future business, promotion, or increased compensation for certified or licensed appraisers, who are independent contractors; (4) requesting that certified or licensed appraisers, who are independent contractors, provide an estimated, predetermined, or desired valuation in an appraisal report or provide estimated values of comparable sales at any time before the certified or licensed appraiser's completion of an appraisal service; (5) providing to certified or licensed appraisers, who are independent contractors, an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the borrower, excepting that a copy of the sales contract for purchase transactions may be provided; (6) providing stock or other financial or nonfinancial benefits to certified or licensed appraisers, who are independent contractors, or an entity or person related to the appraiser; (7) allowing the removal of certified or licensed appraisers, who are independent contractors, from an appraiser panel without prior written notice to the appraiser specifying the basis for his removal from the appraisal panel; (8) obtaining, using, or paying for a second or subsequent appraisal or valuation in connection with a mortgage financing transaction, unless there is a reasonable basis to believe that the initial appraisal or valuation was flawed or tainted and this basis is clearly and appropriately noted in the loan file, or unless the appraisal review or quality control process written preestablished lending requirements, or unless the appraisal or valuation is required by state or federal law; (9) engaging in another act or practice that impairs or attempts to impair the independence, objectivity, or impartiality of an appraiser; (10) requiring an appraiser to indemnify an appraisal management company or hold an appraisal management company harmless for liability, damages, losses, or claims arising out of the services performed by the appraisal management company and not the services performed by the appraiser; and (11) prohibiting certified or licensed appraisers, who are independent contractors, to file an initial complaint against the appraisal management company for alleged abuses of above prohibitions or other issues of misconduct. The board shall handle initial complaints in the same manner as those initial complaints against certified or licensed appraisers. (B) The provisions of subsection (A) may not be construed to prohibit the appraisal management company from requiring certified or licensed appraisers, who are independent contractors, to: (1) provide additional information about the basis for a valuation; (2) correct objective factual errors in an appraisal report; and (3) consider additional, appropriate property information, including the consideration of additional comparable priorities to make or support an appraisal.

Legislative History

HISTORY: 2017 Act No. 32 (S.279), SECTION 1, eff May 10, 2017. Editor's Note 2017 Act No. 32, SECTION 5, provides as follows: "SECTION 5. This act takes effect upon approval by the Governor. In the event that a registration process is unavailable upon the effective date of this act, an appraisal management company already conducting business in this State may continue to conduct business until one hundred twenty days after a registration process becomes available."