Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) In conformance with Civil Code section
1090.5, real estate
licensees engaged in a real estate transaction involving an appraisal shall not
improperly influence or attempt to improperly influence the development, reporting,
result, or review of a real estate appraisal sought in connection with a mortgage
loan. For the purposes of the Real Estate Law, "improper influence" as the term is
used in Civil Code section
1090.5, includes but
is not limited to:
(1) withholding or threatening
to withhold timely payment or partial payment for a completed appraisal report,
regardless of whether a sale or financing transaction closes;
(2) withholding or threatening to withhold future
business from an appraiser, or demoting or terminating or threatening to demote or
terminate an appraiser;
(3) expressly or
impliedly promising future business, promotions, or increased compensation for an
appraiser;
(4) conditioning the ordering
of an appraisal report or the payment of an appraisal fee or salary or bonus on the
opinion, conclusion, or valuation to be reached, or on a preliminary value estimate
requested from an appraiser;
(5)
requesting that an appraiser provide an estimated, predetermined, or desired
valuation in an appraisal report prior to the completion of the appraisal report, or
requesting that an appraiser provide estimated values or comparable sales at any
time prior to the appraiser's completion of an appraisal report;
(6) providing to an appraiser an anticipated,
estimated, encouraged, or desired value for a subject property or a proposed or
target amount to be loaned to the borrower, except that a copy of the sales contract
for purchase transactions may be provided;
(7) requesting the removal of language related to
observed physical, functional or economic obsolescence, or adverse property
conditions noted in an appraisal report;
(8) providing to an appraiser, appraisal company,
or appraisal management company, stock or other financial or non-financial
benefits.
(b) Subdivision (a)
does not prohibit a person with an interest in a real estate transaction from asking
an appraiser to do any of the following:
(1)
Consider additional, appropriate property information.
(2) Provide further detail, substantiation, or
explanation for the appraiser's value conclusion.
(3) Correct errors in the appraisal
report.
(c) Nothing in this
section shall be construed to authorize communications that are otherwise prohibited
under existing law.
1. New article 11
(section 2785) and section filed 9-26-2011; operative 10-26-2011 (Register 2011, No.
39). For prior history of article 11, section 2785, see Register 96, No.
46.
Note: Authority cited: Section
10080,
Business and Professions Code. Reference: Section
1090.5, Civil
Code.
