To be clear, I add this chat:
Me: But, isn't the BREA just a department of the State of. California?
ChatGPT: "The Appraisal Institute is a private, national professional association of real estate appraisers, and as such, it does not fall under the direct regulatory or auditing authority of the State of California. Instead, the oversight of real estate appraisers within California is the responsibility of the Bureau of Real Estate Appraisers (BREA), a division of the California Department of Consumer Affairs.
BREA's primary functions include licensing and certifying individual real estate appraisers and ensuring their adherence to the Uniform Standards of Professional Appraisal Practice (USPAP), as well as state-specific laws and regulations. This oversight ensures that appraisers operating within California maintain the requisite standards of professionalism and competency.
Wikipedia
While the Appraisal Institute offers educational programs and professional designations, such as the MAI and SRA, these credentials are supplementary to the state's licensing requirements. Appraisers seeking to practice in California must obtain the appropriate license from BREA, regardless of any professional designations they may hold from the Appraisal Institute.
It's also noteworthy that BREA has the authority to approve educational courses and providers that meet the state's criteria for appraiser education. In this context, organizations like the Appraisal Institute may submit their courses for BREA's approval to ensure they fulfill the state's educational requirements for appraisers.
Wikipedia
In summary, while the State of California, through BREA, does not audit the Appraisal Institute as an organization, it does regulate the practice of real estate appraisal within the state by licensing individual appraisers and approving educational programs that meet its standards.
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The
Appraisal Institute (AI), as a
non-profit organization, is subject to various forms of oversight and accountability to ensure transparency and ethical operations. Below are the primary mechanisms through which the Appraisal Institute is held accountable:
1. Internal Governance and Ethical Standards
The Appraisal Institute has established a comprehensive
Code of Professional Ethics and
Standards of Professional Practice to guide the conduct of its members. These documents outline the ethical and professional standards expected from members and provide a framework for self-regulation within the organization. To enforce these standards, AI has developed a
peer review system that allows for the evaluation and discipline of members who may violate established guidelines. This internal mechanism ensures that members adhere to the highest levels of professionalism and integrity.
Appraisal Institute
2. Financial Accountability through IRS Filings
As a tax-exempt entity, the Appraisal Institute is required to file an annual
IRS Form 990, which provides detailed information about its financial activities, governance, and operations. These filings are public records and serve as a tool for transparency, allowing stakeholders and the general public to assess the organization's financial health and operational integrity. For instance, the Form 990 for the fiscal year ending December 2022 is available for review.
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3. Independent Financial Audits
To further ensure financial transparency and accountability, the Appraisal Institute undergoes an
annual independent audit conducted by external auditors. These audits are designed to objectively assess the organization's financial statements and internal controls. Summaries of these audits are shared with members to maintain openness and trust within the organization. In a recent communication, the AI President emphasized the organization's commitment to transparency, stating that high-level financial summaries from these audits would be made available to members.
Appraisal Institute
4. Legal and Regulatory Compliance
Beyond internal mechanisms, the Appraisal Institute is also subject to external legal and regulatory oversight. Recent developments have highlighted the importance of such oversight. In March 2025, a former executive filed a lawsuit alleging that the organization misrepresented test results to state regulators, potentially affecting the certification of appraisers. This case underscores the critical role of legal accountability in addressing and rectifying organizational misconduct.
In conclusion, the Appraisal Institute's accountability is maintained through a combination of internal ethical standards, financial transparency via IRS filings and independent audits, and adherence to legal and regulatory requirements. These mechanisms collectively ensure that the organization operates with integrity and upholds the trust placed in it by its members and the public.
Me: Does it look like in the allegations in the lawsuit, that the Appraisal Institute may have done something wrong?
ChatGPT: "The recent lawsuit filed against the Appraisal Institute (AI) raises serious allegations regarding the organization's handling of test results. Former Director of Education and Publications, Alissa Akins, claims that since at least 2020, AI has been misrepresenting test outcomes for mandatory continuing education to state regulators. Specifically, the lawsuit alleges that AI applied a uniform pass/fail threshold across all states, disregarding individual state requirements. This purportedly led to instances where individuals were either incorrectly certified or denied certification based on erroneous reporting.
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In response, the Appraisal Institute has firmly denied these allegations, asserting that their examination and certification procedures are rigorous and designed to uphold the integrity of the appraisal profession. They have labeled the claims as entirely without merit and have expressed their intent to address the matter through appropriate legal channels. Appraisal Institute
At this stage, these are allegations, and no legal determination has been made regarding their validity. The legal process will involve a thorough examination of evidence from both parties to ascertain the facts. Therefore, while the lawsuit presents claims of potential misconduct, it would be premature to conclude that the Appraisal Institute has engaged in any wrongdoing without a formal adjudication."
