Real estate appraisers are now coming under the microscope as the state continues its efforts to combat racism and bias in real estate transactions. Assembly Bill (AB) 948 attacks the issue from both ends of the appraisal process: during the complaint process which may take place after an appraisal, and pre-appraisal, with additional training added to appraisal licensees’ continuing education requirements.
Beginning January 1, 2022, the Bureau of Real Estate Appraisers (BREA) will be required to include a check box within their existing complaint form, asking the complainant whether they believe the appraisal is below market value. Further, complainants will have the option to include their demographic information on the form. The BREA will need to study this demographic information and provide a report of their findings to the state legislature before July 1, 2024.
To prevent discrimination during the appraisal process, licensees are prohibited from basing their appraisal on the basis of:
- gender expression;
- national origin;
- marital status;
- source of income;
- sexual orientation;
- familial status;
- employment status; or
- military status.
This applies to all individuals who may be present or impacted by the appraisal, including the property’s prospective or current owners, any tenants, or occupants of neighboring properties.
The new continuing education requirements begin January 1, 2023. One hour of instruction in cultural competency will be required every four years, as well as two hours of elimination of bias training.
Brokerage Reminder: Continuing education – Git ‘er done!
Beginning July 1, 2022, each purchase agreement and refinance contract for a single family residence (SFR) will need to contain a notice that any appraisal is required to be unbiased, objective and not influenced by improper or illegal considerations. The notice will also indicate how the client may report a complaint when they believe their appraisal has been impacted by bias.
Homes are the biggest investments most people will make in their lives – making it the greatest asset most have. This new law also comes alongside another similar law which will soon require California real estate licensees to complete anti-bias training.
It’s vital for preventative actions be taken to ensure the appraisal process does not reinforce inequality in home values or mortgage terms based on any biases — intentional or otherwise. This bill, with the amendments, makes it unlawful for any form of appraisal of residential real property to discriminate against any person because of the listed reasons included above.
To submit a formal complaint, visit the BREA’s website and download the complaint form.