State by State BPO Laws

[David S. Roberson]

I'll start:

Tennessee:

62-39-103. License or certificate required. —


(a) Except as provided in § 62-39-104, after December 31, 1991, it is unlawful for anyone to solicit an appraisal assignment, or prepare an appraisal or an appraisal report relating to real estate or real property in this state, without first obtaining a real estate appraiser's license or certificate.

(b) This section shall not be construed to apply to individuals who render professional assistance in arriving at a real estate analysis, opinion or conclusion.

(c) Nothing in this chapter shall be construed to prohibit any person who is licensed to practice in this state under any other law from engaging in the practice for which such person is licensed.
[Acts 1990, ch. 865, § 4; 1991, ch. 366, §§ 4, 5; 1995, ch. 222, § 1.]


HOWEVER:


62-39-104. Applicability. —

(a) This chapter does not apply to a real estate broker or salesperson licensed by this state who, in the ordinary course of business, gives an opinion to a potential seller or third party as to the recommended listing price of real estate or an opinion to a potential purchaser or third party as to the recommended purchase price of real estate. This opinion as to the listing price or the purchase price shall not be referred to as an appraisal and no opinion shall be rendered as to the value of the real estate or real property.

(b) This chapter does not apply to a full-time employee who, in the ordinary course of business, gives an opinion of the value of real estate to the employee's employer; provided, that such opinion may not be represented as an appraisal.

(c) This chapter shall in no way affect any person who is registered with the state board of equalization in accordance with § 67-5-1514 while performing any service of any nature for any taxpayer before any tax or assessment authority, agency, or board of equalization.

(d) (1) This chapter does not apply to any evaluation of the value of real estate serving as collateral for a loan made by a federally regulated financial institution or to any evaluation of the value of the assets of a trust held by such institution; provided, that:

(A) The applicable federal regulator does not require an appraisal by a state-licensed or state-certified appraiser for such loan or trust;

(B) The evaluation is used solely by the financial institutions in their records to document the collateral or asset value;

(C) The evaluation shall be labeled on its face “this is not an appraisal”; and

(D) Individuals performing these evaluations may be compensated for their services.

(2) Nothing in this chapter shall prevent a state-licensed or state-certified appraiser from performing such evaluation.

[Acts 1990, ch. 865, § 5; 1991, ch. 366, § 6; 1992, ch. 697, § 5; 1994, ch. 605, § 9.]


So, apparently, BPO's are legal here if it is not a FRT, or if is it a FRT, if it's only for existing collateral or asset value (REO's or portfolios).

 

[Green Hornet]

Washington State

(6) This chapter does not preclude an individual person licensed by the state of Washington as a real estate broker or as a real estate salesperson from issuing a brokers price opinion. However, if the brokers price opinion is written, or given as evidence in any legal proceeding, and is issued to a person who is not a prospective seller, buyer, lessor, or lessee as the only intended user, then the brokers price opinion shall contain a statement, in an obvious location within the written document or specifically and affirmatively in spoken testimony, that substantially states: "This brokers price opinion is not an appraisal as defined in chapter 18.140 RCW and has been prepared by a real estate licensee, licensed under chapter 18.85 RCW, who . . . . . (is/is not) also state-certified or state-licensed as a real estate appraiser under chapter 18.140 RCW." However, the brokers price opinion issued under this subsection may not be used as an appraisal in conjunction with a federally related transaction.


(7) This section does not apply to an appraisal or an appraisal review performed for a financial institution or mortgage broker by an employee or third party, when such appraisal or appraisal review is not required to be performed by a state-certified or state-licensed real estate appraiser by the appropriate federal financial institutions regulatory agency.

(8) This section does not apply to an attorney licensed to practice law in this state or to a certified public accountant, as defined in RCW 18.04.025, who evaluates real property in the normal scope of his or her professional services.


An aside, both of my contacts at a large AMC have been moved to the AMC's BPO department. They must process a lot of these.

 

[Desiree Mehbod]

Commonwealth of Virginia

Commonwealth of Virginia:

Did you know that a licensed real estate broker or agent who performs an appraisal without having an appraiser’s license may be in violation of Section 54.1-2011.A of the Code of Virginia?

This Code Section states:

“t shall be unlawful to engage in the appraisal of real estate or real property for compensation or valuable consideration in this Commonwealth without first obtaining a real estate appraiser's license in accordance with Board regulations.”

Licensed real estate brokers and salespersons are exempt from this appraiser licensure requirement only in accordance with Section 54.1-2010.A.1 of the Code of Virginia, which states:

“The provisions of this chapter shall not apply to a real estate broker or salesperson licensed in the Commonwealth, who, in the ordinary course of business, provides a valuation or analysis of real estate for a fee; however, such person shall not hold himself out as a real estate appraiser, and the valuation shall not be referred to as an appraisal and shall not be used in lieu of an appraisal performed by a licensed appraiser."

It has come to the attention of the Real Estate Appraiser Board that some financial institutions are asking, or suggesting to borrowers to ask, for an appraisal from either a licensed appraiser or a real estate broker (in lieu of an appraiser). Brokers and salespersons can only provide a Broker Price Opinion (BPO) or Certified Market Analysis (CMA) for the purpose of soliciting a listing or other brokerage duties.

If you provide a valuation service that is not in the process of the ordinary course of business, and you are not a licensed appraiser, you may subject yourself to the risk of criminal fines and penalties as expressed in Section 54.1-111.A of the Code of Virginia. These violations are Class 1 Misdemeanors - punishable by a maximum $2500 fine and 12 months in jail.

~ Source: http://www.dpor.virginia.gov/dporweb/VREBSpeakingFall2007.pdf

 

[Tom Barclay]

I was looking for the appropriate statute from Oregon when I came upon this from disclipinary actions against licensee's.

"By performing a competitive market analysis without first examining the inside of the subject property, Richardson engaged in conduct that is below the standard of care for professional real estate activity in Oregon, in violation of ORS 696.301(15)."

Mr. Richardson(Broker) was reprimanded by the Oregon Real Estate Agency on 25 Jun 08. He prepared the CMA prior to signing the listing(or viewing the interior) on the property. Just how many BPO's are done without ever viewing the interior? I'd guess around 100%.

Yet the Oregon Real Estate Agency allows real estate licensee's to prepare BPO's for financing purposes. Really looks like a double standard to me.

It's the last case in this link.
http://www.oregon.gov/REA/EDU/docs/OREN-J_July_2008_Administrative_Actions_Supplement.pdf

 

[Tom Barclay]

Couldn't copy and paste this, but this is Oregon's postion.

http://www.oregon.gov/REA/EDU/docs/OREN-J_12-07.pdf

Or from this link, page 3.

http://oregonaclb.org/media/Spring2008Newsletter.pdf

 

[Desiree Mehbod]

State Laws Affecting the Performance of BPOs by Real Estate Brokers and Salespersons

I found the following on AI site in regard to all "State Laws Affecting the Performance of BPOs by Real Estate Brokers and Salespersons":

http://www.appraisalinstitute.org/newsadvocacy/downloads/BPOStateLaws.pdf

This pretty much covers all the State laws.

 

[mp2277]

So, I have a Realtor friend who does BPO's for banks at about $75 per each, and another friend who does them for, of all clients, bankruptcy lawyers, at $200 each. Seems that no one cares. Neither, btw, are appraisers.

 

[Carnivore]

So, I have a Realtor friend who does BPO's for banks at about $75 per each, and another friend who does them for, of all clients, bankruptcy lawyers, at $200 each. Seems that no one cares. Neither, btw, are appraisers.

SO go steal the legal clients away from the realtor by offering the same price!! Geez, thats a no brainer. Tell the new law clients, that your reports will hold up better in court then some nitwit re agent. "Appraisals prepared by competent duly licensed appraisers are always superior to BPO's prepared by competent duly licensed RE Brokers."

------------------------------

The NCAB has the power, they just choose to ignore the problem:

The NC General Statute that authorizes the NCAB:

http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_93e/gs_93e-1-5.html

This rule is a biggee and rarely if ever used by the NCAB

http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_93e/gs_93e-1-10.html

93E‑1‑10. Rule‑making authority.

The Board may adopt rules not inconsistent with the provisions of this Chapter and the General Statutes of North Carolina which may be reasonably necessary to implement, administer, and enforce the provisions of this Chapter, including, but not limited to, the authority to:

(1) Prescribe forms and procedures for submitting information to the Board;
(2) Prescribe standards of practice for persons registered as a trainee, licensed or certified under this Chapter; and
(3) Prescribe standards for the operation of real estate appraiser education programs. (1993, c. 419, s. 6; 2001‑399, s. 1.)

Another biggee that the NCAB rarely if ever enforces or uses:

§ 93E‑1‑12. Disciplinary action by Board.

http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_93e/gs_93e-1-12.html

(a) The Board may take disciplinary action against registered trainees and State‑licensed or State‑certified real estate appraisers. Upon its own motion or the complaint of any person, the Board may investigate the actions of any person registered as a trainee or licensed or certified as a real estate appraiser under this Chapter, any person who performs appraisals without an appropriate registration, license, or certificate, or any person who holds himself or herself out to be registered as a trainee or licensed or certified as a real estate appraiser when the person holds no registration, license, or certificate.

§ 93E‑1‑13. Penalty for violation of this Chapter.

http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_93e/gs_93e-1-13.html

(a) Any person who acts as, or holds himself or herself out to be, a registered trainee or a State‑licensed or State‑certified real estate appraiser without first obtaining a registration, license, or certificate as provided in this Chapter, or who willfully performs the acts specified in G.S. 93E‑1‑12(a) shall be guilty of a Class 1 misdemeanor.

(b) The Board may appear in its own name in superior court in actions for injunctive relief to prevent any person from violating the provisions of this Chapter or the rules promulgated by the Board. The superior court shall have the power to grant these injunctions whether or not criminal prosecution has been or may be instituted as a result of the violations, and whether or not the person is the holder of a registration, license, or certificate issued by the Board under this Chapter. (1993, c. 419, s. 6; 1994, Ex. Sess., c. 14, s. 49; 1995, c. 482, s. 10; 2001‑399, s. 1.)

§ 93E‑1‑14. Referral of cases by courts.

http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_93e/gs_93e-1-14.html

Whenever any registered trainee, licensee, or certificate holder is adjudged by a civil or criminal court to have injured or damaged any person, partnership, association, or corporation through gross negligence, incompetency, fraud, dishonesty, or other civil or criminal misconduct, the court may, as part of its judgment or decree, order a written copy of the transcript of the record in said case to be forwarded by the clerk of court to the Board with a recommendation that the registration, license, or certificate of the registered trainee, licensee, or certificate holder be revoked or otherwise subject to disciplinary action. (1993, c. 419, s. 6; 1995, c. 482, s. 11.)

 

[Bob Ipock]

They need to have some complaints filed before they can do anything. I dare say that very, very few signed BPO complaints have been received at the NCAB.....and if they were received....THEN they would ignore them.