September 14, 2011, Introduced by Rep. O'Brien and referred to the Committee on Regulatory Reform.
A bill to amend 1980 PA 299, entitled
"Occupational code,"
(MCL 339.101 to 339.2919) by adding article 26A.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
ARTICLE 26A
Sec. 2661. As used in this article:
(a) "Appraisal" means that term as defined in section 2601.
(b) "Appraisal management company" or "company" means a person
that does both of the following:
(i) Administers a network of independent appraisers, receives
requests for appraisals from clients, and receives a fee paid by
the client for the appraisals.
(ii) Enters into an agreement with 1 or more independent
appraisers in its network to perform the appraisals contained in
the request described in subparagraph (i).
(c) "Appraiser" means that term as defined in section 2601.
(d) "Employee" means an individual who has an employment
relationship acknowledged by both the individual and the company
and is treated as an employee for purposes of compliance with
federal income tax laws.
(e) "Independent appraiser" means an appraiser who is not an
employee of an appraisal management company.
(f) "Licensed real estate appraiser" means a state licensed
real estate appraiser, as that term is defined in section 2601.
(g) "Real property" means that term as defined in section
2601.
(h) "Transaction" means a real estate related financial
transaction, as that term is defined in section 2601.
(i) "Uniform standards of professional appraisal practice"
means that term as defined in section 2601.
Sec. 2663. This article does not apply to any of the
following:
(a) An agency of the federal government or a department or
agency of this state or a political subdivision of this state.
(b) A person that exclusively employs individuals on an
employer and employee basis for the performance of appraisals in
the normal course of its business and that is responsible for
ensuring that the performance of those appraisals meet the
requirements of this article, article 26, and the uniform standards
of professional appraisal practice.
(c) A person that has as its primary business the development
of appraisals in this state under article 26 and that meet the
requirements of the uniform standards of professional appraisal
practice.
(d) A person that has as its primary business the development
of appraisals in this state but that in the normal course of
business enters into an agreement with an independent contract
appraiser for the performance of appraisals that the contracting
entity cannot complete either because of the location or type of
real property in question.
(e) A real estate broker licensed under and performing
activities authorized by article 25.
(f) An officer or employee of a person described in
subdivision (b), (c), or (d), if he or she is acting in the scope
of his or her employment with that person.
Sec. 2665. (1) An appraisal management company shall not enter
into any contracts or agreements with an independent appraiser for
the performance of residential real estate appraisal services
unless the independent appraiser is a licensed real estate
appraiser.
(2) An appraisal management company shall not prohibit an
appraiser from disclosing in an appraisal the actual fees charged
by the appraiser for appraisal services and shall otherwise comply
with any applicable requirements of federal law, including, but not
limited to, any requirements for appraisals established by the
United States department of housing and urban development.
(3) Subject to subsection (4), an employee, director, officer,
or agent of an appraisal management company shall not influence or
attempt to influence the development, reporting, result, or review
of an appraisal through coercion, extortion, collusion,
compensation, inducement, intimidation, bribery, or in any other
manner, including, but not limited to, any of the following:
(a) Withholding or threatening to withhold timely payment for
an appraisal.
(b) Withholding or threatening to withhold future business
from an appraiser or demoting or terminating or threatening to
demote or terminate an appraiser.
(c) Expressly or impliedly promising future business,
promotions, or increased compensation for an appraiser.
(d) Conditioning an order for an appraisal or the payment of
an appraisal fee, salary, or bonus on the opinion, conclusion, or
valuation to be reached or on a preliminary estimate requested from
an appraiser.
(e) Requesting that an appraiser provide an estimated,
predetermined, or desired valuation in an appraisal or provide
estimated values or comparable sales at any time before the
appraiser's completion of the appraisal.
(f) Providing to an appraiser an anticipated, estimated,
encouraged, or desired value for a subject property or a proposed
or targeted amount of a loan to a borrower. However, an appraiser
may be provided with a copy of the sales contract in a purchase
transaction.
(g) Allowing the removal of an appraiser from a list of
qualified appraisers used by any person without prior written
notice to the appraiser that includes written evidence of the
appraiser's illegal conduct, substandard performance, or otherwise
improper or unprofessional behavior or any violation of the uniform
standards of professional appraisal practice or licensing standards
for appraisers under article 26.
(h) Engaging in any other act or practice that impairs or
attempts to impair an appraiser's independence, objectivity, or
impartiality.
(i) Requesting or requiring an appraiser to collect a fee from
a borrower, homeowner, or any other person for providing appraisal
services.
(j) Altering, modifying, or otherwise changing a completed
appraisal submitted by an independent appraiser without the
appraiser's written knowledge and consent.
(k) Using, or having the appraisal management company use, an
appraisal submitted by an independent appraiser for any other
transaction, purpose, or use other than for that which the
appraisal was prepared. However, this subdivision does not prohibit
an appraisal management company from providing a copy of the
appraisal to a federal agency in the normal course of business or
when providing a copy of the appraisal is otherwise required by
law.
(l) Requiring an appraiser to sign an indemnification agreement
that would require the appraiser to indemnify and hold harmless the
appraisal management company or any of its agents, employees, or
independent contractors for any liability, damage, losses, or
claims arising out of the services performed by the appraisal
management company or its agents, employees, or independent
contractors and not the services performed by the appraiser.
(m) Requiring an appraiser to provide the company with the
appraiser's digital signature or seal.
(4) This section does not prohibit an appraisal management
company from requesting that an appraiser do any of the following
in connection with the development, reporting, result, or review of
an appraisal:
(a) Consider additional appropriate information about the real
property.
(b) Provide further detail, substantiation, or explanation for
the appraiser's value conclusion.
(c) Correct errors in the appraisal.
Sec. 2667. A person that violates section 2665 is subject to
the penalties described in article 6.