HF 2492

as introduced - 89th Legislature (2015 - 2016) Posted on 03/08/2016 04:16pm

A bill for an act
relating to real estate appraisers; regulating fees paid to appraisers by appraisal
management companies; proposing coding for new law in Minnesota Statutes,
chapter 82C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [82C.17] REASONABLE AND CUSTOMARY FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Fees. new text end

new text begin An appraisal management company shall compensate
appraisers with fees that are reasonable and customary for appraisal services performed in
the market area of the property being appraised.
new text end

new text begin Subd. 2. new text end

new text begin Evidence. new text end

new text begin (a) An appraisal management company can evidence that the
fees paid to an appraiser were reasonable and customary through:
new text end

new text begin (1) objective third-party information, including but not limited to government
agency fee schedules or academic studies. Any academic studies used must exclude
appraisal assignments ordered by an appraisal management company. The commissioner
may establish a fee schedule for use by an appraisal management company; or
new text end

new text begin (2) reviewing each of the following factors and making adjustments to recent fees
paid for appraisal services performed in the market area:
new text end

new text begin (i) the type of property appraised;
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new text begin (ii) the scope of the appraisal work;
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new text begin (iii) the time in which the appraisal service must be performed;
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new text begin (iv) appraiser qualifications;
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new text begin (v) appraiser experience and professional record; and
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new text begin (vi) appraiser work quality.
new text end

new text begin (b) The fees paid for a complex appraisal assignment shall reflect the increased
time, difficulty, and scope of work required.
new text end

new text begin (c) An appraisal management company shall maintain written documentation
describing and substantiating all methods and information used to determine the customary
and reasonable fees required by this section.
new text end

new text begin Subd. 3. new text end

new text begin Reporting. new text end

new text begin (a) An appraisal management company shall separately state to
the client the following:
new text end

new text begin (1) the fees paid to an appraiser for appraisal services; and
new text end

new text begin (2) the fees charged by the appraisal management company for services associated
with the management of the appraisal process, including procurement of the appraiser's
services.
new text end

new text begin (b) An appraisal management company shall not prohibit any appraiser who is part
of an appraiser panel from recording the fee that the appraiser was paid by the appraisal
management company for appraisal within the appraisal report that is submitted by the
appraiser to the appraisal management company.
new text end

new text begin (c) An appraisal management company shall not include any fees for appraisal
management services performed by the company in the amount the company reports as
charges for the appraisal by the appraiser.
new text end

new text begin Subd. 4. new text end

new text begin Timely payment. new text end

new text begin Except in the case of breach of contract or substandard
appraisal, an appraisal management company shall pay an independent contractor
appraiser for the completion of an appraisal or appraisal review:
new text end

new text begin (1) within 30 days of the appraiser providing the appraisal report to the appraisal
management company; or
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new text begin (2) in accordance with a payment schedule agreed to in writing by the appraiser
and the appraisal management company.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2016, and applies to
appraisal assignments commenced on or after that date.
new text end