South Dakota

Reviewer Requirements

  • Reviewers must be South Dakota licensed appraisers

 

  • SD Article 20:77:05-(4):

20:77:05:01. Responsibilities and duties. An appraisal management company registered under the provisions of this article shall:

(4) Have a system in place to verify that any employee of, or independent contractor to, the appraisal management company that is utilized to perform an appraisal review, of the work of utilized appraisers who perform an appraisal assignment for a property located in South Dakota, be licensed or certified and in good standing by this state;

  • o SD Article 20:77:01:02:

20:77:01:02. Appraisal review. “Appraisal review,” is an act or process of developing and communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal assignment related to the appraiser’s data collection, analysis, opinions, conclusions, estimate of value, or compliance with the Uniform Standards of Professional Appraisal Practice. The term does not include a general examination for grammatical, typographical or other similar errors, or a general examination for completeness including regulatory, or client requirements or both as specified in the agreement process that does not communicate an opinion.

 

Scope of Law

  • No clear distinction between residential and commercial real estate

 

  • SD Chapter 36-21D-3:

36-21D-3. Appraisal defined. For the purposes of this chapter, an appraisal is the act or process of developing an opinion of value of real estate for another and for compensation.

Reviewing Provisions

  • Must conduct quality reviews to assure complains with USPAP

 

  • SD Article 20:77:05-(3):

20:77:05:01. Responsibilities and duties. An appraisal management company registered under the provisions of this article shall:

(3) Have a system in place to review the work of utilized appraisers who perform appraisal services to validate that the services were conducted in conformity with the uniform standards;

 

Appraiser Requirements

Appraiser Competency

  • Must require appraisers to certify competency prior to accepting appraisal assignment

 

  • SD Article 20:77:05-(2):

20:77:05:01. Responsibilities and duties. An appraisal management company registered under the provisions of this article shall:

(2) Require each utilized appraiser who performs appraisals in this state to certify in writing the area of geographic competency and the specific appraisal assignments competent to appraise;

 

Record Keeping

  • Specific records that must be kept for 5 years/5 years after any judiciary proceeding

 

  • SD Article 20:77:06:

20:77:06:01. Retention of records. An appraisal management company registered under the provisions of this article shall retain the following records:

 

(1) A detailed record of each service request that it receives for appraisals of real property located in South Dakota, which shall include, but is not limited to, the following:

(a) Letter of engagement with the utilized appraiser;

(b) Appraisal report received from the utilized appraiser, including the original report, any revised reports, and any addenda or other material furnished subsequent to the delivery of the original report;

(c) Any and all assignment related correspondence sent to and received from the utilized appraiser;

(d) Letter of engagement with the utilized reviewing appraiser for the purpose of reviewing the requested appraisal;

(e) Review of the requested appraisal, including the original review report, any and all correspondence sent to and received from the utilized reviewing appraiser, and each subsequent revised review report;

(f) Requests received from the client, all documentation supplied to that client, and any and all correspondence sent to and received from the client; and

(g) Fees paid to utilized appraisers and the fees received from the client;

(2) The appraiser fee schedules, with beginning and ending effective dates, which is developed, maintained, and is currently being used.

Records must be retained for a minimum of five years. However, if, within the five-year period, an appraisal or report is involved in an investigation, litigation, or state or federal review, the five-year period for the retention of the records begins on the date of the final disposition of that investigation, litigation, or state or federal review. Records may be retained as a photocopy or electronic copy type of media.

 

Licensing Disclosure

Communications With Appraisers

Communication With Board

  • Mandatory reporting

 

  • SD Article 20:77:05-(5):

20:77:05:01. Responsibilities and duties. An appraisal management company registered under the provisions of this article shall:

(5) File a referral with the department if there is evidence that a utilized appraiser is in violation of the laws, rules, or uniform standards regarding appraisers, including but not limited to grounds for disciplinary action as prescribed in § 20:14:11:03;

 

Billing/ Payment

  • Must disclose to clients fees paid to appraisers separately from AMC fees

 

  • SD Article 20:77:05-(8):

20:77:05:01. Responsibilities and duties. An appraisal management company registered under the provisions of this article shall:

(8) Disclose to its client the actual fees paid to an appraiser for appraisal services, separate from any other fees or charges for appraisal management services, and make the information available to the department upon request; and

  • Fees paid to appraisers must be “reasonable and customary”

 

  • SD Article 20:77:07:03-(18):

20:77:07:03. Grounds for disciplinary action. The grounds for disciplinary action are:

(18) Being sanctioned for failing to compensate utilized appraisers, who complete appraisal assignments on properties located within the State of South Dakota, with reasonable and customary fees as required by TILA.

 

Employee Training

Removal of Appraisers from Panel

  • Must provide appraiser with written notice prior to removal from panel

 

  • SD Chapter 36-21D-10-(8):

36-21D-10. Prohibited conduct–Grounds for discipline. No employee, director, officer, agent, independent contractor or other third party acting on behalf of an appraisal management company may:

(8) Remove an appraiser from a real estate appraiser panel without prior written notice to the appraiser, with the prior written notice including evidence of the following:
(a) The appraiser’s illegal conduct;
(b) A violation of the appraisal standards adopted by the Department of Labor and Regulation pursuant to this chapter; or
(c) Improper or unprofessional conduct; or

 

Misc

  • Registrations expire Dec. 31

 

  • SD Article 20:77:03:03:

20:77:03:03. Term of registration. The secretary shall issue a certificate of registration to an applicant who qualifies in accordance with this article. Any registration issued under this article expires on December 31 of each year, unless otherwise revoked or suspended during said term.