In the News
FACT Letter to the Office of the Attorney General
FACT Letter to The Office of the Attorney General Regarding Proposed SB 17 Rules
FACT is aligned with the goal of S.B. 17 in protecting Texas real property from being acquired and owned by hostile foreign interests. Nonetheless, the current rules may place an unnecessary burden of additional work and liability on appraisers, depending on the definition and interpretation of the “due diligence” requirement. For this reason, FACT would encourage additional specificity regarding what constitutes “reasonable due diligence” on the part of an appraiser.
Read the entire letter HERE.
89th Legislative Session
Governor Abbott Names Bolton Chair of Texas Appraiser Licensing and Certification Board
Austin - Governor Greg Abbott named Ray "Chance" Bolton Chair of the Texas Appraiser Licensing and Certification Board for a term to expire at the pleasure of the Governor. The Board performs duties relating to the education, ethics, and certification or licensing of real estate appraiser or appraiser trainees.
Chance Bolton of Lakeway is the managing partner of Bolton Real Estate Consultants, Ltd., and the owner and broker of Bolton Real Estate Services. Additionally, he is a licensed Texas Real Estate Appraiser and Real Estate Broker. He holds the Certified Commercial Real Estate Appraiser designation from the National Association of Real Estate Appraisers and the General Accredited Appraiser designation from the National Association of REALTORS. Previously, he served on the board of directors for the Lake Travis Education Foundation and as a member of the State Bar of Texas' Law Focused Education Committee. Bolton received a Bachelor of Business Administration in Entrepreneurship from the University of Houston and is a United States Navy Veteran.
88th Legislative Session
FACT passes Indemnication bill
SB 1766 Sen. Creighton/Rep. Paul ensures that appraisers cannot be held liable for the negligence or mistakes made by a local governmental entity by making such contract provisions void and unenforceable. Every party to a contract should be responsible for their faults if their negligence or mistake leads to litigation.
The bill was introduced to protect appraisers when they work with local governmental agencies – cities, counties, school districts and the like. Sometimes governmental entities include provisions in the Requests for Proposals and/or terms of a contract that require professional appraisers to indemnify or defend a governmental entity against liability for damages other than those caused by the appraiser—even when the potential damages arise from the actions of the governmental entity itself. Requiring appraisers to defend their employers through such contractual provisions in a professional services contract is typically uninsurable under a professional liability insurance policy. Appraisers that are small businesses cannot afford the significant legal expense of a duty to defend a governmental entity. Additionally, since appraisals are contemporaneously reviewed by all parties at the time of closing, there is little to sue over after the fact.
SB 1766 passed and was signed into law by the Governor on 5-23-23, and will take effective on 9-1-23.
87th Legislative Session
For appraisers, the 87th legislature was an immense success. Both FACT legislative priority bills passed and have been signed into law.
HB 1939 Smith – Relating to the limitations periods for certain suits against real estate appraisers and appraisal firms.
Texas appraisers have been facing lawsuits alleging defects in appraisals performed for mortgage transactions from 10-15+ years ago. Under current law, the filing limit does not commence until the claimant discovers or should have discovered the alleged defect. This results in an almost infinite statute of limitations for claims against appraisers. HB 1939 implements a 5-year outer statute of limitations that will allow Texas appraisers the certainty that they will not be subjected to improper litigation years or even decades after the fact. The bill takes effect on September 1, 2021, and applies to a cause of action that accrues after that date. The bill has been signed by the Governor and will be effective September 1st, 2021.
HB 2533 Darby – Relating to performance of an evaluation of real property for use by a financial institution.
Federal lending regulators have recently raised the financials thresholds for when lenders can rely on “evaluations” in lieu of appraisals. Evaluations can be performed by non-appraisers and do not have to comply with stringent Uniform Standards of Professional Appraisal Practice (USPAP) requirements. However, under Texas law, and according to a recent Texas Attorney General’s opinion, licensed appraisers are obligated to make their evaluations USPAP compliant, creating an uneven playing field for licensed appraisers, and driving up costs for both lenders and borrowers. HB 2533 was signed by the Governor and took effect on June 14th – meaning that appraiser can immediately begin performing these evaluations. [Please make a note that evaluations performed by licensed appraisers must include must contain on the first page of the document the following notice: "This is not an appraisal performed in accordance with the Uniform Standards of Professional Appraisal Practice."] The bill has been signed by the Governor and will be effective immediately.
Protection for Appraisers
Statute of Repose & Evaluations Bills Filed in the 87th Legislative Session
The Statue of Repose bills will limit the liability of appraisers from meritless claims:
If passed, these bills will allow appraisers to perform Evaluations without USPAP compliance or TALCB oversight:
As always, we are monitoring hundreds of bills that may affect our livelihood.
To accomplish these objectives, FACT needs your continued support.
Please consider making a donation to FACTPAC today. Contributions must be from individuals, not companies, and can be made in several ways:
Go to the website: Supportfact.org/FACTPAC to download the contribution sheet.
Mail personal check and contribution sheet to FACTPAC at FACT, P.O. Box 202197, Austin, Texas 78720.
You may also donate through PAYPAL
FACT appreciates your continued support.
