On October 11, 2009, Governor Arnold Schwarzenegger approved Senate Bill 237, which will regulate appraisal management companies (AMCs). California is the sixth state to enact a law regulating AMCs, following Arkansas, Louisiana, Nevada, New Mexico, and Utah.
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As of January 1, 2010, all appraisal management companies doing business in California will be required to register with the state Office of Real Estate Appraisers (OREA). Each AMC will be required to submit a list of “controlling persons”, including officers, directors, individuals with a minimum 10% ownership interest, and individuals who have the contractual authority to employ real estate appraisers.
Additionally, the law prohibits persons who have been convicted of certain crimes, or have had their appraisal licenses or certifications revoked, from serving as controlling persons in AMCs.
This new law also prohibits AMCs from improperly influencing, or attempting to improperly influence, an appraiser’s valuation. It also prohibits AMCs from altering, modifying, or otherwise changing a completed appraisal report.
OREA is also authorized to issue administrative fines up to $10,000 for each violation.
A complete copy of the new law may be accessed here.
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