NJ Governor Vetoes BPO Cites Consumer Confusion
NJ Governor Vetoes BPO Legislation, Cites Consumer Confusion
On Aug. 19, New Jersey Gov. Chris Christie vetoed bill S. 2551, legislation that would have significantly expanded the ability of the state’s real estate professionals to provide broker price opinion and comparative market analysis services.
In his veto message to the Legislature, Christie said,
“While I appreciate the desire to facilitate additional business for real estate licensees in the state of New Jersey, I am concerned about potential consumer confusion.”
The Appraisal Institute chapters in New Jersey testified in strong opposition to this bill when it was going through the legislative process earlier this year.
As passed by the New Jersey Legislature in late June, the bill would have allowed real estate brokers, broker-salespersons and salespersons to perform BPOs for virtually any purpose, except for use in the New Jersey Tax Court or for use in eminent domain proceedings. The bill would have allowed for BPOs and CMAs to be performed in conjunction with tax appeals, investor due diligence, portfolio valuation and distressed loan workouts and in many legal proceedings.
The bill’s only requirement was a clear disclosure that a BPO or CMA was not an appraisal but rather “an estimate that details the probable selling price of a particular piece of property.”
Under existing New Jersey law, real estate professionals already are permitted to provide “counsel and advice on pricing, listing, selling and use of real property, directly to a property owner or prospective purchaser if the intended use of the counsel or advice is solely for the individual knowledge of or use by the property owner or prospective purchaser.” Additionally, real estate professionals are permitted to provide appraisals to state or federally chartered financial institutions for use in a federally related transactions where the use of a licensed or certified appraiser is not required by federal law.
“Determining the precise value of real estate is a complex process, crucial to the sale of a residential home,”
Christie noted in his veto message.
“This bill will unwisely introduce confusion into that process, with sellers struggling to determine when and why to use broker price opinions, comparative market analyses, or appraisals. At a time when New Jersey’s residential home sales are rebounding, and many first-time buyers and sellers are entering the real estate market, upsetting our state’s traditional method of home appraisals demands a clear necessity, and a compelling justification. This bill falls short on both…”
The chief proponent of the legislation, the New Jersey Association of Realtors, made it clear that they will be working with the Governor to draft new legislation that addresses his concerns. The Appraisal Institute’s New Jersey chapters will be actively involved in the consideration of any future legislation.
View a copy of S. 2551 as passed the Legislature below.