Regulations to Govern Applications for License
11340. The director shall adopt regulations governing the process and the procedure of applying for a license that shall include, but not be limited to, necessary experience or education, equivalency, and minimum requirements of the Appraisal Foundation, if any.
(a) For purposes of the educational background requirements established under this section, the director shall do both of the following:

(1) Grant credits for any courses taken on real estate appraisal ethics or practices pursuant to Section 10153.2, or that are deemed by the director to meet standards established pursuant to this part and federal law.

(2) Require the completion of a course on state and federal laws regulating the appraisal profession, as approved by the bureau every two years. The course shall include an examination that requires an applicant to demonstrate the applicant’s knowledge of those laws.

(b) For the purpose of implementing and applying this section, the director shall prescribe by regulation

“equivalent courses” and “equivalent experience.” The experience of employees of an assessor’s office or of the State Board of Equalization in setting forth opinions of value of real property for tax purposes shall be deemed equivalent to experience in federally related real estate appraisal activity. Notwithstanding any other law, a holder of a valid real estate broker license shall be deemed to have completed appraisal license application experience requirements upon proof that the applicant has accumulated 1,000 hours of experience in the valuation of real property.

(c) The director shall adopt regulations for licensure that shall meet, at a minimum, the requirements and standards established by the Appraisal Foundation and the federal financial institutions regulatory agencies acting pursuant to Section 1112 of the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) (Public Law 101-73). The director shall, by regulation, require the application for a real estate appraiser license to include the applicant’s social security number or individual taxpayer identification number.

(d) In evaluating the experience of any applicant for a license, regardless of the number of hours required of that applicant, the director shall apply the same standards to the experience of all applicants.

(e) (1) Beginning January 1, 2023, in addition to the requirements set forth in this section, an applicant for licensure shall complete at least one hour of instruction in cultural competency.

(2) For purposes of this section, “cultural competency” means understanding and applying cultural and ethnic data to the process of providing services that includes, but is not limited to, information on the appropriate services for lesbian, gay, bisexual, transgender, and intersex communities, ethnic communities, and religious communities.

(f) No license shall be issued to an applicant who is less than 18 years of age.

(g) The cost of any educational course required by this section shall not be borne by any client served by a licensee.

Term of License
11341. A license issued with an effective date of January 1, 2000, or later shall be valid for two years unless otherwise extended or limited by the director.

Fingerprint Cards Required - Records Check
11343. (a) Each real estate appraiser license applicant and each controlling person of each applicant for registration as an appraisal management company shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice via
LiveScan for the purposes of allowing the bureau to obtain information as to the existence and content of a record of state or federal convictions and state or federal arrests and also information as to the existence and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on the person’s own recognizance pending trial or appeal. If the applicant is located out of state, then the applicant shall include the applicant’s fingerprint card with the application package and the bureau shall submit the fingerprint cards to the Department of Justice for the purposes of this subdivision.

(b) When received, the Department of Justice shall forward to the Federal Bureau of Investigation requests for federal summary criminal history information received pursuant to this section. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the bureau.

(c) The Department of Justice shall provide a response to the bureau pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(d) The bureau shall request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for persons described in subdivision (a).

(e) The Department of Justice shall charge a fee sufficient to cover the cost of processing the request described in this section.

Temporary License - Probationary License
11344. (a) Notwithstanding Section 11341, a temporary license may be issued pending the outcome of the fingerprint and background check or as otherwise prescribed by the director. A temporary license is valid for up to 150 days. Unless otherwise prohibited pursuant to Section 17520 of the Family Code, a temporary license may be renewed once at the discretion of the director.
(b) The director may issue a probationary license as follows:

(1) By term.

(2) By conditions to be observed in the exercise of the privileges granted.

Appraisal Management Companies - Regulations
11345. The director shall adopt regulations governing the process and procedure of applying for registration as an appraisal management company. Applications for a certificate of registration shall require, at a minimum, all of the following:
(a) The name of the person or entity seeking registration.

(b) The business address and telephone number of the person or entity seeking registration.

(c) If the applicant is not a person or entity domiciled in this state, the name and contact number of a person or entity acting as agent for service of process in this state, along with an irrevocable consent to service of process in favor of the bureau.

(d) The name, address, and contact information for each controlling person of the applicant who has operational authority to direct the management of, and establish policies for, the applicant.

Appraisal Management Companies - Contact Information
11345.05. (a) A registrant shall notify the bureau within 10 business days, on a form developed by the bureau, of any additions, deletions, or changes in the names, addresses, and contact information for the individuals listed on its application.
(b) A registrant shall correct information on file with the bureau within 10 business days of discovering an error in that information, and shall not be subject to disciplinary action by the director or the bureau for incorrect information the registrant corrects within 10 business days of its discovery as being inaccurate.

Certificate Validity Term
11345.1. A certificate of registration as an appraisal management company shall be valid for a period of two years, unless otherwise extended or limited by the director.

Controlling Person - Restrictions
11345.2. (a) An individual shall not act as a controlling person for a registrant if any of the following apply:
(1) The individual has entered a plea of guilty or no contest to, or been convicted of, a felony. If the individual’s felony conviction has been dismissed pursuant to Section 1203.4, 1203.4a, 1203.41, 1203.42, or 1203.425 of the Penal Code, the bureau may allow the individual to act as a controlling person.

(2) The individual has had a license or certificate to act as an appraiser or to engage in activities related to the transfer of real property refused, denied, canceled, or revoked in this state or any other state.

(b) Any individual who acts as a controlling person of an appraisal management company and who enters a plea of guilty or no contest to, or is convicted of, a felony, or who has a license or certificate as an appraiser refused, denied, canceled, or revoked in any other state shall report that fact or cause that fact to be reported to the bureau, in writing, within 10 days of the date the individual has knowledge of that fact.

(c) This section shall become operative on July 1, 2020.

Appraisal Management Companies - Certificate of Registration
11345.3. All appraisal management companies shall do all of the following:
(a) Ensure that all contracted appraisal panel members possess all required licenses and certificates from the bureau.

(b) Establish and comply with processes and controls reasonably designed to ensure that the appraisal management company, in engaging an appraiser, selects an appraiser who is independent of the transaction and who has the requisite license, education, expertise, and experience necessary to competently complete the appraisal assignment for the particular market and property type.

(c) Direct the appraiser to perform the assignment in accordance with the Uniform Standards of Professional Appraisal Practice.

(d) Establish and comply with processes and controls reasonably designed to ensure that the appraisal management company conducts its appraisal management services in accordance with the requirements of Section 129E(a) through (i) of the Truth in Lending Act, 15 U.S.C. 1639e(a) through (i), and regulations thereunder.

(e) Engage appraisal panel members with an engagement letter that shall include terms of payment.

(f) Appraisal management companies shall maintain all of the following records for each service request:

(1) Date of receipt of the request.

(2) Name of the person from whom the request was received.

(3) Name of the client for whom the request was made, if different from the name of the person from whom the request was received.

(4) The appraiser or appraisers assigned to perform the requested service.

(5) Date of delivery of the appraisal product to the client.

(6) Client contract.

(7) Engagement letter.

(8) The appraisal report.

Appraisal Management Company - Improper Influence
11345.4. No person or entity acting in the capacity of an appraisal management company shall improperly influence or attempt to improperly influence the
development, reporting, result, or review of any appraisal through coercion, extortion, inducement, collusion, bribery, intimidation, compensation, or instruction. Prohibited acts include, but are not limited to, the following:

(a) Seeking to influence an appraiser to report a minimum or maximum value for the property being valued. Such influence may include, but is not limited to, the following:

(1) Requesting that an appraiser provide a preliminary estimate or opinion of value for one or more properties prior to entering into a contract with that appraiser for appraisal services related to that property or properties.

(2) Conditioning whether to hire an appraiser based on an expectation of the value conclusion likely to be returned by that appraiser.

(3) Conditioning the amount of an appraiser's compensation on the value conclusion returned by that appraiser.

(4) Providing an appraiser with an anticipated, estimated, encouraged, or desired valuation prior to their completion of an appraisal.

(b) Withholding or threatening to withhold timely payment to an appraiser because the person does not return a value at or above a certain amount.

(c) Implying to an appraiser that current or future retention of that appraiser depends on the amount at which the appraiser estimates the value of real property.

(d) Excluding an appraiser who prepares an appraisal from consideration for future engagement because the appraiser reports a value that does not meet or exceed a predetermined threshold.

(e) Conditioning the compensation paid to an appraiser on consummation of the real estate transaction for which the appraisal is prepared.

(f) Requesting the payment of compensation from an appraiser for purposes of enabling that appraiser to achieve higher priority in the assignment of appraisal business.

(g) Nothing in this section prohibits a person or entity acting in the capacity of an appraisal management company from doing any of the following:

(1) Asking an appraiser to do any of the following:

(A) Consider additional, appropriate property information, including information about comparable properties.

(B) Provide further detail, substantiation, or explanation for the appraiser's value conclusion.

(C) Correct errors in an appraisal report.

(2) Obtaining multiple valuations, for purposes of selecting the most reliable valuation.

(3) Withholding compensation due to breach of contract or substandard performance of services.

(4) Providing a copy of the sales contract in connection with a purchase transaction.

Bar Against Evasions
11345.45 . A person or entity may not structure an appraisal assignment for, or a contract with, an employee appraiser or an independent contractor appraiser for the purpose of evading the provisions of this part relating to appraisal management companies.

Appraiser Panel Membership
11345.5 For purposes of subdivision (d) of-Section 11302 and determining whether, within a 12-month period, an appraisal management company oversees an appraiser panel of more than 15 state-certified or state-licensed appraisers in a state or 25 or more state-certified or state-licensed appraisers in two or more states:
(a) An appraiser is deemed part of the appraisal management company’s appraiser panel as of the earliest date on which the appraisal management company does either of the following:

(1) Accepts the appraiser for the appraisal management company’s consideration for future appraisal assignments in covered transactions or for secondary mortgage market participants in connection with covered transactions.

(2) Engages the appraiser to perform one or more appraisals on behalf of a creditor for a covered transaction or secondary mortgage market participant in connection with covered transactions.

(b) An appraiser who is deemed part of the appraisal management company’s appraiser panel pursuant to subdivision (a) is deemed to remain on the panel until the date on which the appraisal management company does either of the following:

(1) Sends written notice to the appraiser removing the appraiser from the appraiser panel, with an explanation of its action.

(2) Receives written notice from the appraiser asking to be removed from the appraiser panel or notice of the death or incapacity of the appraiser.

(c) If an appraiser is removed from an appraisal management company’s appraiser panel pursuant to subdivision (b), but the appraisal management company subsequently accepts the appraiser for consideration for future assignments or engages the appraiser at any time during the 12 months after the appraisal management

company’s removal, the removal will be deemed not to have occurred, and the appraiser will be deemed to have been part of the appraisal management company’s appraiser panel without interruption.

Management Company Limitations
11345.6. (a) No appraisal management company may alter, modify, or otherwise change a completed appraisal report submitted by an appraiser.
(b) No appraisal management company may require an appraiser to provide it with the appraiser’s digital signature or seal. However, nothing in this subdivision shall be deemed to prohibit an appraiser from voluntarily providing his or her digital signature or seal to another person, to the extent permissible under the Uniform Standards of Professional Appraisal Practice.

Conflicts of Interest
11345.7. No person or entity preparing an appraisal or performing appraisal management functions in connection with the origination, modification, or refinancing of a mortgage loan shall have a prohibited direct or indirect interest, financial or otherwise, in the property or the transaction for which the appraisal or appraisal management functions are performed, within the meaning of Section 226.42(d) of Title 12 of the Code of Federal Regulations and the accompanying commentary contained in Volume 75 of the Federal Register, page 66554, dated October 28, 2010.

Federally Regulated Companies
11345.8. A federally regulated appraisal management company operating in California shall report to the bureau the information the bureau is required to submit to the Appraisal Subcommittee, pursuant to the Appraisal Subcommittee’s policies regarding the determination of the Appraisal Management Company Registry fee. The bureau may charge the federally regulated appraisal management company a state fee in an amount not to exceed the reasonable regulatory cost to the board for processing and submitting the information. This fee shall be deposited in the Real Estate Appraisers Regulation Fund.

11346. The provisions of this part relating to appraisal management companies shall cease to be operative 60 days after the effective date of a federal law that mandates the registration or licensing of appraisal management companies with an entity other than the state regulatory authority with jurisdiction over licensed and certified appraisers.
CHAPTER 5. RECIPROCITY