State Fee Disclosures

State Fee Disclosures

A number of states have enacted legislation regarding specific fee disclosure requirements. As there is no federal guideline on fee disclosure, state regulations vary widely in intent and complexity. For instance, some states merely prevent AMCs from prohibiting appraisers from disclosing their fee, while others require full disclosure of the fee split between the appraiser and the AMC.

United States Appraisals monitors the latest regulatory changes on a state by state basis and communicates all new requirements to its appraisal panel. United States Appraisals will not accept reports that do not properly adhere to the specific state requirements.

Following is a summary of state requirements:

Arizona: AMCs and appraisers must disclose to clients, as a dollar amount, the fee paid for an appraisal report by the AMC in the scope of work section of the appraisal report.

Arkansas: AMCs must disclose to clients the actual fees paid to an appraiser separately from any other fees or charges for appraisal management services. AMCs must also keep complete records of requests for appraisal services including acceptance of fees from borrowers or clients and payments to appraisers. The Arkansas real estate appraisal board may inspect the records without prior notice, periodically, or if the board determines that the records are pertinent to an investigation of a complaint against an AMC.

Connecticut: AMCs must disclose to clients prior to providing, or along with, the appraisal report
(1) the dollar amount of the total compensation to be paid by such company to the appraiser who performed the appraisal; and
(2) the dollar amount of the total compensation to be retained by such company from the appraisal fee paid to such company for such appraisal.

Georgia: AMCs must separately state to clients the fees paid to an appraiser for appraisal services and the fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser’s services.

Indiana: AMCs must maintain a record of each service request for an appraisal that the appraisal management company receives including the costs and fees for the appraisal management services performed by the appraisal management company and the costs and fees for the appraisal performed by the real estate appraiser.

Kansas: AMCs must have a system in place to disclose to clients the fees paid for appraisal management services and to the appraiser for the completion of an appraisal assignment.

Kentucky: AMCs must maintain complete records of requests for appraisal services referred to an appraiser, including the acceptance of fees from clients and payments to appraisers. The Kentucky real estate appraisal board may inspect records, without prior notice, periodically, or if the board determines that the records are pertinent to an investigation of a complaint against a registrant. In addition, AMCs must disclose on all invoices, purchase orders, or other documents establishing work to be performed for or compensation due from clients, itemized actual fees paid to any third party for services performed, including appraisal services, for the client through contract with or arrangement through the registrant. The disclosure must include the name of the third party performing the service, including a licensed appraiser performing appraisal services, the nature of the service and itemized fees paid to the third party for appraisal services or any other services performed and itemized fees or charges received by the registrant for appraisal management services.

Louisiana: AMCs must separately state to clients the fees paid to an appraiser for appraisal services and the fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser’s services.

Maryland: AMCs may not knowingly fail to separate and disclose any fees charged to clients by the appraisal management company for the completion of an appraisal by an appraiser from the fees charged to a lender, client, or any other person by an appraisal management company for providing appraisal management services.

Missouri: AMCs must state separately to clients the fee paid to the appraiser for the appraisal services and the fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of appraiser’s services.

Nevada: AMCs must disclose whether or not the company uses an appraiser fee schedule, meaning a list of the various real estate appraisal services requested by the appraisal management company from independent contractors and the amount the company will pay for the performance of each service listed.

New Mexico: AMCs must separately state the fees paid to an appraiser for appraisal services and the fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser’s services to the client, borrower and any other payor. In addition, fees paid to an appraiser for completion of the appraisal must not include a fee for management of the appraisal process or any activity other than the performance of the appraisal.

North Dakota: AMCs must disclose to clients the fees paid for appraisal management services and the fees paid to the independent appraiser for the completion of an appraisal assignment.

Oklahoma: AMCs must have a system in place to disclose to clients the fees paid for appraisal management services and the fees paid to the appraiser for the completion for an appraisal assignment.

Pennsylvania: AMCs must disclose to lenders the fees paid for an appraisal separately from any other fees or charges for appraisal management services.

Tennessee: AMCs must separately state to clients the fees paid to an appraiser for appraisal services and the fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser’s services.

Texas: AMCs must separately state the fees paid to an appraiser for the completion of an appraisal and charged by the company for appraisal management services. In addition, AMCs may not include any fees for appraisal management services performed by the company in the amount the company reports as charges for the actual completion of an appraisal by an appraiser.

Utah: AMCs must direct the appraiser who performs the real estate appraisal activity to disclose in the body of the appraisal report:
(a) the total compensation, stated as a dollar amount, paid to the appraiser or, if the appraiser is employed by an appraisal company, to the appraiser’s employer; and
(b) the total compensation retained by the AMC in connection with the real estate appraisal activity, stated as a dollar amount.

Vermont: AMCs must ensure that the appraiser’s title appears by their license number in the signature section of the report and that the appraiser’s fee and the AMC’s registration number is disclosed adjacent to or immediately below the AMC’s registered name in the addendum. AMCs must also ensure that the appraiser includes within the body of the appraisal report the amount of the appraiser’s fee for appraisal services.

Virginia: AMCs must disclose the actual fee paid to the appraiser by the appraisal management company as part of the appraisal report.

West Virginia: AMCs must disclose to clients the fees paid for appraisal management services and to the appraiser for the completion of an appraisal assignment.

 

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