- Reviewers must have “demonstrated knowledge” of USPAP
- SC SB 349 Article 3 Section 40-60-400-(A):
(A) An employee of the appraisal management company who has the responsibility to perform appraisal reviews of independent appraisers shall have demonstrated knowledge of the uniform standards of professional appraisal practice as determined by the board.
Scope of Law
- No clear distinction between residential and commercial real estate
- SC SB 349 Article 3 Section 40-60-320-(1):
(1) ‘Appraisal’ means the act or process of developing an opinion of the value of real property in conformance with the uniform standards for professional appraisal practice published by the appraisal foundation.
- Must conduct internal quality control reviews to assure compliance with USPAP on a periodic basis
- SC SB 349 Article 3 Section 40-60-330-(B)-(8):
(B) Registration required by subsection (A) must include:
(8) certification that the entity seeking registration has a system in place to review the work of all independent appraisers that are performing real estate appraisal services for the appraisal management company on a periodic basis to validate that the real estate appraisal services are being conducted pursuant to uniform standards of professional appraisal practice;
- SC SB 349 Article 3 Section 40-60-330-(B)-(9):
(B) Registration required by subsection (A) must include:
(9) certification that the entity maintains a detailed record of each service request that it receives and the independent appraiser that performs the real estate appraisal services for the appraisal management company;
- Records must be kept for 5 years/2 years after any judicial proceedings
- SC SB 349 Article 3 Section 40-60-430:
An appraisal management company seeking to be registered shall certify to the board on an annual basis that it maintains a detailed record of each service request that it receives; and have a policy in place that the independent appraiser that performs the real estate appraisal services for the appraisal management company maintains those records, including, but not limited to, the work file, for no less than five years after preparation or at least two years after final disposition of a judicial proceeding in which the appraiser or the appraisal management company provided testimony related to the assignment, whichever period expires last.
Communications With Appraisers
Communication With Board
- Must pay appraisers within 45 days of transmission of appraisal report
- SC SB 349 Article 3 Section 40-60-450-(A):
(A) An appraisal management company shall, except in cases of breach of contract or substandard performance of services, make payment to an independent appraiser for the completion of an appraisal or valuation assignment within forty-five days after the date on which the independent appraiser transmits or otherwise provides the completed appraisal or valuation study to the appraisal management company or its assignee.
- Must pay appraisers at “customary and reasonable” rates
- SC SB 349 Article 3 Section 40-60-450-(B):
(B) An appraisal management company shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.
- Must separately state to clients feed paid to appraisers and AMC fees
- SC SB 349 Article 3 Section 40-60-450-(C):
(C) An appraisal management company shall separately state the fees paid to an appraiser for appraisal services and the fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the services to the client.
- Certain items which we cannot charge the appraiser for
- SC SB 349 Article 3 Section 40-60-450-(E)(1)
(E)(1) Fees paid to an appraiser shall not include fees for services typically provided by an appraisal management company. Except as provided in item (2) of this subsection, an appraisal management company may not require payment from the appraiser for:
(a) transactions, assignments, quality assurance, disputes, or services provided by the appraisal management company to its client;
(b) fees associated with the number of assignments performed by the appraiser; or
(c) monthly, quarterly, or annual membership on the appraisal management company’s approved appraiser panel.
- Can require compensation from appraisal for initial and annual expenses:
- SC SB 349 Article 3 Section 40-60-450-(E)(2):
(2) An appraisal management company may be compensated from the appraiser for initial and annual expenses directly associated with the inclusion of the appraiser on the approved panel of appraisers of the appraisal management company.
Removal of Appraisers from Panel
- Must provide written notice to appraiser prior to removal from panel
- SC SB 349 Article 3 Section 40-60-470-(A):
(A) Except within the first sixty days after an independent appraiser is first added to the appraiser panel of an appraisal management company, an appraisal management company shall not remove an appraiser from its appraiser panel or otherwise refuse to assign requests for real estate appraisal services to an independent appraiser without notifying the appraiser in writing of the reasons for the appraiser being removed from the appraiser panel of the appraisal management company. If the appraiser is being removed from the panel for illegal conduct, violation of the Uniform Standards of Professional Appraisal Practice, or a violation of the South Carolina Real Estate Appraisers Act, the appraisal management company shall provide the independent appraiser the nature of the alleged conduct or violation and provide an opportunity for the appraiser to respond.
- Criteria for controlling person
- SC SB 349 Article 3 Section 40-60-390-(A)-(2):
(A) In order to serve as a controlling person of an appraisal management company, a person shall:
(2) hold an active license or certificate to act as an appraiser in at least one state or have completed and successfully passed the exam for an Appraisal Qualification Board (AQB), qualified fifteen hour national USPAP course, and completed and successfully passed the exam for an AQB, qualified the seven hour national USPAP update course within twenty-four months prior to each renewal of the appraisal management company’s registration pursuant to this article;