Congrats AI National, you got a win and hope you can sleep at night…
The Appraisal Institute succeeded pushing SB-70 into CA law without informing their own membership. Their long-term goal for all their anonymous lobbying to dismantle all appraisal licensing is to revert to a previous time before FIRREA when membership in trade groups mattered a lot more. Unfortunately, they are heavily damaging the livelihoods of appraisers in the process. Be sure to shake hands with Scott DiBiasio, Bill Garber, Jim Amorin and the rest of AI executive leadership at your next AI meeting.
The background on this insanely damaging law to appraisers can be found in the August 3, 2018 issue of Appraiserville.
I’ve been keeping tabs on SB70 and saw that it was signed into to law this week.
SB-70 Real estate: Uniform Standards of Professional Appraisal Practice.(2017-2018)
Here is what I wrote back in August about SB70:
Here’s the biggie:
(C) States that there may be assumptions that the appraiser has not verified that may significantly impact the appraised value of the subject of the report. The whole purpose of USPAP is to provide credibility in reporting to protect the public trust. With the wording of this bill, any appraiser could take any point of view and not back it up with verifiable data. For example, an appraiser could take a seller’s word on potential uses of their property and the appraiser can simply restate them and not provide any support to verify the claims.
THEN WHAT THE %^&$@#% DOES THE PUBLIC NEED AN APPRAISAL FOR????
This bill allows the creation of a worthless document that demeans the value of an actual diligent appraisal.
This will open up fraud and overvaluation on a scale not yet seen before. It renders our profession equal to a fortune teller (no offense to fortune tellers). This bill shows a blatant disregard for the public trust from the real estate’s largest trade group.
But there is more:
This bill, if it becomes law on January 1, 2019, is only good until January 1, 2020!!! It is only valid for one year which clearly shows how desperately AI National needs to claim a win after years of losses in fighting for evaluations against their own membership’s wishes. They are throwing ethics aside! All bets are off now! Just get a win!
This bill destroys the validity of what an appraisal actually is because good appraisers can now perform like bad appraisers without concern. There is no accountability and no verification required if this bill is passed.
Plus, this bill changes the use of the report from the single client concept to a universal use as long as all the names are listed. How does this square up with their own code of ethics?
There is one glaring oversight by the AI lackeys in Sacramento that signed-off on this bill in secret that shows their own greediness to advance up the AI National hierarchy: There are about 10,000 credentialed appraisers in California. I don’t know how many AI designated members are in California, but I’m assuming it is substantially less than that. If this bill becomes law, can anyone imagine the explosion of fraud by people desperate to take shortcuts, ESPECIALLY AS THE MARKET STARTS TO COOL? Remember, AI leadership in California signed off on a bill that makes verification unnecessary. I’m sure a majority of AI membership in California are decent and competent appraisers. But now they have to compete with the bad eggs or those that will quickly become bad because they can say and do anything without verification. Not only AI members get to do these simple reports, but anyone with a license and a pulse does as well.
And you can bet that AI National will press for renewal or permanence in 2019 without telling their CA membership. I was told from a very credible source that the strategy all along was to not tell the membership what was going on and sneak in the bill in the second year of a 2-year review process. Congrats AI National, you got a win and hope you can sleep at night. Oh, and shame on all of your leadership.
Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.
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