Last month, the Ohio House of Representatives introduced House Bill 581, which is designed to both regulate appraisal management companies (AMCs) and make changes to the Real Estate Appraiser Licensing Law in order to comply with the appraiser-specific provisions within the Truth in Lending Act (TILA).
Co-sponsored by Representatives Stephen Slesnick (D-District 49) and Cheryl Grossman (R-District 23), HB 581 would require AMCs operating in Ohio to abide by the following policies:
- Each owner and/or controlling person of an AMC must be at least 18 years of age, have graduated from high school or attained an equivalent certificate, and have not had any appraiser license of certificate in any state denied, cancelled, or surrendered.
- A license will not be granted to an AMC if any owner and/or controlling person has ever been convicted of or plead guilty to a felony – however, the Superintendent of Real Estate and Professional Licensing can choose to look beyond the conviction or plea if the applicant’s record is clean since their altercation with the law.
- All appraisers added to the AMC’s panel must have a license or certificate that’s in good standing.
- AMCs must review the work of their appraisers to ensure compliance with USPAP.
- An AMC must provide its clients with the actual fees paid to an appraiser for their services.
- AMCs must disclose their license, certificate, or registration number on each engagement letter used when assigning an appraisal request.
- The controlling person must complete an initial 15 hours of USPAP instruction, followed by 7 more hours of instruction at least once every 2 years.
- After the appraisal report is submitted to the client, AMCs must maintain the following collateral for a period of at least 5 years: the original copy of every request sent by the client regarding the appraisal report; the original copy of every request sent to an appraiser by the AMC; and the copy of the appraisal report and all versions of that said report.
- AMCs must include the following in each appraisal assignment file: the name and contact information of both the AMC and the individual (or automated system) involved in assigning the appraisal; the amount of any fee paid to the appraiser (including time and method of payment); and details of all communications between the AMC, the appraiser, and the client.
- Employees, directors, officers, or agents of an AMC may not influence or attempt to influence the development, reporting, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, or bribery.
- AMCs may not alter, modify, or otherwise change a completed appraisal report submitted by an appraiser – with the exception of the format for transmission purposes.
- AMCs must compensate appraisers for the completion of an appraisal report within 60 days of its delivery – except when there is a breach of contract or a case of substandard performance.
In addition, HB 581 prescribes procedures for criminal background checks, fingerprinting, audits, and inspections when there is a reasonable cause to believe that any owner and/or controlling person has committed a criminal offense. The Superintendent of Real Estate and Professional Licensing may then charge the AMC with a fee for the criminal background check.
The Real Estate Appraiser Board or the Superintendent of Real Estate and Professional Licensing may compel—by order or subpoena—the attendance of witnesses to testify in relation to any matter related to a criminal background check. The bill gives the board or superintendent the same power as any county court judge to administer oaths, compel the attendance of witnesses, and punish witnesses for the refusal to testify.
This blog is a simple overview of HB 581, and should not be used as the sole resource for those conducting research on this recently proposed legislation. To see a complete copy of HB 581, please visit the following website.