BILL NUMBER: SB 223 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 30, 2007
PASSED THE ASSEMBLY JULY 20, 2007
AMENDED IN ASSEMBLY JULY 2, 2007
AMENDED IN SENATE MAY 15, 2007
AMENDED IN SENATE APRIL 30, 2007
AMENDED IN SENATE APRIL 17, 2007
AMENDED IN SENATE APRIL 10, 2007
INTRODUCED BY Senator Machado
FEBRUARY 13, 2007
An act to amend Section 11323 of the Business and Professions
Code, and to add Article 7 (commencing with Section 1090.5) to
Chapter 1 of Title 4 of Part 4 of Division 2 of the Civil Code,
relating to real estate appraisals, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 223, Machado. Real estate appraisals.
(1) The Real Estate Appraisers' Licensing and Certification Law,
which is part of the Real Estate Law, provides for the licensing and
certification of real estate appraisers. That law prohibits a
licensed appraiser from engaging in any appraisal activity in
connection with the purchase, sale, or transfer of real property if
his or her compensation is affected by the sales commission generated
by the transaction for which the appraisal was made. Existing law
makes a knowing and willful violation of the Real Estate Law a
misdemeanor.
This bill would prohibit a licensed appraiser from engaging in any
appraisal activity in connection with the purchase, sale, transfer,
financing, or development of real property if his or her compensation
is dependent on or affected by the value conclusion generated by the
appraisal. By broadening the definition of a crime, this bill would
impose a state-mandated local program.
(2) Existing law regulates the transfer of real property and the
activities of real estate brokers and mortgage lenders.
This bill would prohibit anyone with an interest in a real estate
transaction involving an appraisal from improperly influencing, as
specified, the reporting, result, or review of a real estate
appraisal sought in connection with a mortgage loan. The bill would
provide, if a person who violates these provisions is licensed by a
state licensing law and the violation occurs within the course and
scope of the person's duties as a licensee, that the violation shall
be deemed a violation of that state licensing law. The bill would
also provide that nothing in these provisions shall be construed to
authorize communications that are otherwise prohibited under existing
law.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 11323 of the Business and Professions Code is
amended to read:
11323. No licensee shall engage in any appraisal activity in
connection with the purchase, sale, transfer, financing, or
development of real property if his or her compensation is dependent
on or affected by the value conclusion generated by the appraisal.
SEC. 2. Article 7 (commencing with Section 1090.5) is added to
Chapter 1 of Title 4 of Part 4 of Division 2 of the Civil Code, to
read:
Article 7. Unlawful Influence of Appraisers
1090.5. (a) No person with an interest in a real estate
transaction involving an appraisal shall improperly influence or
attempt to improperly influence, through coercion, extortion, or
bribery, the development, reporting, result, or review of a real
estate appraisal sought in connection with a mortgage loan.
(b) Subdivision (a) does not prohibit a person with an interest in
a real estate transaction from asking an appraiser to do any of the
following:
(1) Consider additional, appropriate property information.
(2) Provide further detail, substantiation, or explanation for the
appraiser's value conclusion.
(3) Correct errors in the appraisal report.
(c) If a person who violates this section is licensed under any
state licensing law and the violation occurs within the course and
scope of the person's duties as a licensee, the violation shall be
deemed a violation of that state licensing law.
(d) Nothing in this section shall be construed to authorize
communications that are otherwise prohibited under existing law.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 4. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to take immediate steps to bring credibility to mortgage
lending in California, and to protect consumers and other
participants in mortgage transactions from fraudulent and deceitful
practices, it is necessary that this act take effect immediately.