Virginia Enacts Law on Reasonable and Customary Fees
Virginia Gov. Terry McAuliffe on March 23 signed into law S.B. 1445, which requires appraisal management companies operating in the state to compensate appraisers at a reasonable and customary rate. The legislation gives the Virginia Real Estate Appraiser Board authority to take administrative action against AMCs not paying appraisers customary and reasonable fees in accordance with federal law.
Prior to enactment of the legislation, Virginia law already required an appraiser engaged by an AMC to disclose as part of the appraisal report the actual fee they were paid. In 2014, the Virginia Center for Housing Research and the Virginia Tech Program in Real Estate completed a survey of Virginia residential real estate appraisers to analyze the patterns of fees earned by appraisers the previous year. Prior to release of the report, no data existed that defined customary and reasonable residential real estate appraisal fees in Virginia.
Payment of reasonable and customary fees
Several other states have provisions in their AMC laws similar to those passed by Virginia, and a few others currently are considering similar legislation. Some states simply require AMCs to provide a certification to the state appraiser licensing and certification agency stating that they are complying with federal law regarding payments of reasonable and customary fees. Other states specifically require the payment of reasonable and customary fees and grant authority to the state licensing agency to investigate complaints against AMCs related to appraisal fees and to take administrative action against those found to be in violation of state law.