Chapter 4768: APPRAISAL MANAGEMENT COMPANIES

4768.01 Definitions.

As used in this chapter:

(A) "Real estate appraisal" or "appraisal" means the actor process of developing an opinion of value of real property in conformity with the uniform standards of professional appraisal practice.

(B) "Appraisal management company" means any person authorized either by a creditor of a consumer credit transaction secured by a consumer's principal dwelling, or by an underwriter of or other principal in the secondary mortgage markets, that performs appraisal management services in connection with valuing properties collateralizing mortgage loans or valuing properties collateralizing mortgages incorporated in a securitization.

(C) "Appraisal management services" means to perform any of the following functions on behalf of a lender, financial institution, client, or any other person in conjunction with a consumer credit transaction that is secured by a consumer's primary dwelling:

(1) Administer an appraiser panel;

(2) Recruit, retain, or select appraisers;

(3) Qualify, verify licensure or certification, and negotiate fees and service level expectations with persons who are part of an appraiser panel;

(4) Contract with appraisers to perform appraisal assignments;

(5) Receive an order for an appraisal from one person and deliver the order for the appraisal to an appraiser who is part of an appraiser panel for completion;

(6) Manage the process of having an appraisal performed, including providing administrative duties, such as receiving appraisal orders and reports, submitting completed appraisal reports to creditors and underwriters, collecting fees from creditors and underwriters for services provided, and reimbursing appraisers for services performed;

(7) Track and determine the status of orders for appraisals;

(8) Conduct quality control of a completed appraisal prior to the delivery of the appraisal to the person that ordered the appraisal;

(9) Provide a completed appraisal performed by an appraiser to one or more clients.

(D) "Appraisal report" means a written communication of a real estate appraisal or appraisal review or an oral communication of a real estate appraisal or appraisal review that is documented by a writing that supports the oral communication.

(E) "Appraisal review" means the act or process of developing and communicating an opinion about the quality of an other appraiser's work that was performed as part of an appraisal or appraisal review. "Appraisal review" does not include an examination of an appraisal for grammatical errors, typographical errors, or completeness, provided the review for completeness does not require an opinion about the quality of the work of an appraiser. The real estate appraiser board may define, by rule, "review for completeness."

(F) "Appraisal services" or "real estate appraisal services" means a real estate appraisal or appraisal review.

(G) "Appraiser" means a person licensed or certified under Chapter 4763. of the Revised Code.

(H) "Appraiser panel" means a network of appraisers who are independent contractors to the appraisal management company and who have been approved by the appraisal management company, after responding to an invitation or request from the appraisal management company, to perform appraisals for any client of the appraisal management company or for the appraisal management company directly, on a periodic basis, as assigned by the appraisal management company.

(I) "Automated valuation model" means a computer software program that analyzes data using an automated process, such as regression, adaptive estimation, neural network, expert reasoning, or artificial intelligence programs, that produces an output that may become a basis for appraisal or appraisal review if the appraiser believes the output to be credible for use in a specific assignment.

(J) "Client" means any person that contracts with, or otherwise enters into an agreement with, an appraisal management company for residential or commercial real estate appraisal services.

(K) "Controlling person" means any of the following:

(1) An owner, officer, or director of a business entity seeking to offer appraisal management services in this state;

(2) An individual employed, appointed, or authorized by an appraisal management company, who has the authority to enter into contractual relationships with clients for the performance of appraisal management services and the authority to enter into agreements with appraisers for the performance of residential or commercial real estate appraisal services;

(3) An individual who possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of an appraisal management company.

(L) "Federally regulated appraisal management company" means an appraisal management company that is owned and controlled by an insured depository institution as defined in 12 U.S.C. 1813 or an insured credit union as defined in 12 U.S.C. 1752 and that is regulated by the office of the comptroller of the currency, the board of governors of the federal reserve system, the national credit union administration, or the federal deposit insurance corporation.

(M) "Owner" means a person who owns or controls ten per cent or more of an appraisal management company.

(N) "Person" means an individual, corporation, partnership, sole proprietorship, subsidiary, unit, or other business entity.

(O) "Real estate" has the same meaning as in section 4735.01 of the Revised Code.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.02 Prohibited acts.

(A)

(1) No person shall do any of the following without first obtaining a license under this chapter:

(a) Directly or indirectly engage or attempt to engage in business as an appraisal management company;

(b) Directly or indirectly engage in or attempt to perform appraisal management services;

(c) Advertise or hold itself out as engaging in or conducting business as an appraisal management company.

(2) A person that violates division (A)(1) of this section may be subject to sanctions under section 4768.14 of the Revised Code.

(B) This chapter shall not apply to any of the following:

(1) An appraisal management company that is a federally regulated appraisal management company;

(2) Any person that exclusively employs appraisers on an employer and employee basis for the performance of appraisals;

(3) Any person engaged in appraisal services who, in the normal course of business, enters into an agreement, whether written or otherwise, with an independent appraiser for the performance of appraisal services that the hiring or contracting person is not completing for any reason, including competency, work load, schedule, or geographic location. Division (B)(3) of this section applies only to an appraiser and to that appraiser's business entity provided that entity is engaging in real estate appraisal services, not appraisal management services;

(4) Any person engaged in appraisal services who, in the normal course of business, enters into an agreement, whether written or otherwise, with an independent contractor appraiser for the performance of appraisal services and, upon the completion of the appraisal, the report of the independent contractor appraiser performing the appraisal services is cosigned by the person who subcontracted with the independent contractor appraiser for the performance of the appraisal services. An appraisal management company shall not avoid the requirements of this division by requiring an employee of the appraisal management company, who is an appraiser, to sign the appraisal that has been completed by an appraiser that is part of the appraisal panel for the appraisal management company.

(5) Any appraiser engaged in mass appraisal services under the direction of the tax commissioner or a county auditor.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.03 Duties of real estate appraiser board.

The real estate appraiser board shall do all of the following:

(A) Adopt rules, in accordance with Chapter 119. of the Revised Code in furtherance of this chapter, including, but not limited to, all of the following:

(1) Procedures for criminal records checks that are required under section 4768.06 of the Revised Code, in accordance with division (K) of section 121.08 and division (C) of section 4768.06 of the Revised Code;

(2) The following nonrefundable fees:

(a) The initial appraisal management company license fee, which shall not exceed two thousand dollars;

(b) The annual renewal fee, which shall not exceed two thousand dollars;

(c) The late filing fee, which shall not exceed one thousand dollars, for the renewal of a license under division (C) of section 4768.07 of the Revised Code.

(3) Requirements for settlement agreements that the superintendent of real estate and professional licensing and an appraisal management company or other person may enter into under division (H) of section 4768.13 or division (C) of section 4768.14 of the Revised Code;

(4) Presumptions of compliance with regard to the customary and reasonable fees required under division (B) of section 4768.12 of the Revised Code. In adopting rules under division (A)(4) of this section, the board shall consider presumptions of compliance promulgated for the same purpose under the federal "Truth in Lending Act," 82 Stat. 146, 15 U.S.C. 1631 et seq.;

(5) Rules regarding consent to service of process for appraisal management companies in accordance with division (A) (6) of section 4768.06 of the Revised Code.

(B) Determine the appropriate disciplinary actions to be taken against a person, including a licensee, under section 4768.13 of the Revised Code;

(C) Hear appeals, pursuant to Chapter 119. of the Revised Code, from decisions and orders that the superintendent issues pursuant to this chapter;

(D) Request that the superintendent initiate an investigation of a violation of this chapter or the rules adopted under it, as the board determines appropriate.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 6/14/2018.

4768.04 Duties of superintendent.

(A) The superintendent of real estate and professional licensing shall do all of the following:

(1) Prescribe the form and content of all applications required by this chapter;

(2) Receive applications for licenses and renewal thereof under this chapter and establish the procedures for processing, approving, and disapproving those applications;

(3) Retain records and all application materials submitted to the superintendent;

(4) Issue licenses and maintain a register of the names and addresses of all appraisal management companies issued a license under this chapter;

(5) Perform any other functions and duties, including the employment of staff, necessary to administer this chapter;

(6) Administer this chapter;

(7) Issue all orders necessary to implement this chapter;

(8) Investigate complaints, upon the motion of the superintendent of real estate and professional licensing or upon receipt of a complaint, or at the request of the real estate appraiser board, concerning any violation of this chapter or the rules adopted pursuant thereto or the conduct of any person holding a license issued pursuant to this chapter;

(9) Establish and maintain an investigation and audit section to investigate complaints and conduct inspections, audits, and other inquiries as, in the judgment of the superintendent of real estate and professional licensing, are appropriate to enforce this chapter. The investigators and auditors may review and audit the business records of licensees during normal business hours. The superintendent of real estate and professional licensing may utilize the investigators and auditors who are employed by the division of real estate and professional licensing for other related purposes.

(10) Appoint a hearing examiner for any proceeding under section 4768.13 or 4768.14 of the Revised Code;

(11) Make and transmit any reports, and collect and transmit any fees, that are required under section 1109(a) of the "Financial Institutions, Reform, Recovery, and Enforcement Act," as amended, 12 U.S.C. 3338(a).

(B) The superintendent of real estate and professional licensing may do any of the following:

(1) In connection with investigations and audits under division (A)(8) of this section, subpoena witnesses as provided in section 4768.05 of the Revised Code;

(2) Apply to the appropriate court to enjoin any violation of this chapter. Upon a showing by the superintendent of real estate and professional licensing that any person has violated or is about to violate this chapter, the court shall grant an injunction, restraining order, or other appropriate relief, or any combination thereof;

(3) In conjunction with the enforcement of this chapter, when the superintendent of real estate and professional licensing has reasonable cause to believe that any owner or controlling person of a licensee has committed a criminal offense, the superintendent of real estate and professional licensing may request the superintendent of the bureau of criminal identification and investigation to conduct a criminal records check of the owner or controlling person. The superintendent of the bureau of criminal identification and investigation shall obtain information from the federal bureau of investigation as part of the criminal records check of the owner or controlling person. The superintendent of real estate and professional licensing may assess the licensee a fee equal to the fee assessed for the criminal records check.

(C)

(1) The following information and documents are confidential and not public records under section 149.43 of the Revised Code:

(a) All information that is obtained by investigators and auditors performing investigations or conducting inspections, audits, and other inquiries pursuant to divisions (A)(8) and (9) of this section;

(b) All reports, documents, and other work products that arise from the information described in division (C)(1)(a) of this section and that are prepared by the investigators, auditors, or other personnel of the department of commerce.

(2) The superintendent of real estate and professional licensing, the investigators and auditors, and other personnel of the department shall hold in confidence the information, reports, documents, and other work products described in division (C)(1) of this section.

(3) Divisions (C)(1) and (2) of this section do not prevent the division from releasing information relating to licensees to the superintendent of financial institutions for purposes relating to the administration of sections 1322.01 to 1322.12 of the Revised Code, to the commissioner of securities for purposes relating to Chapter 1707. of the Revised Code, to the superintendent of insurance for purposes relating to the administration of Chapter 3953. of the Revised Code, to the attorney general, or to law enforcement agencies and prosecutors. Information released by the division pursuant to division (C)(3) of this section remains confidential.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.05 .

The real estate appraiser board or the superintendent of real estate and professional licensing may compel, by order or subpoena, the attendance of witnesses to testify in relation to any matter over which the board or the superintendent has jurisdiction and that is the subject of the inquiry and investigation by the board or superintendent and may require the production of any book, paper, or document pertaining to such matter. For such purpose, the board or the superintendent has the same power as judges of county courts to administer oaths, compel the attendance of witnesses, and punish witnesses for refusal to testify. Service of the subpoena may be made by sheriffs or by certified mail, return receipt requested, and the subpoena shall be deemed served on the date delivery is made or the date the person refuses to accept delivery. Sheriffs or constables shall return such process and shall receive the same fees for doing so as are allowed for like service if service of the subpoena is made by sheriffs or constables. Witnesses shall receive, after their appearance before the board or the superintendent, the fees and mileage provided for under section 119.094 of the Revised Code. If two or more witnesses travel together in the same vehicle, the mileage fee shall be paid to only one of those witnesses, but the witnesses may agree to divide the fee amongst themselves in any manner.

If any person fails to file any statement or report, obey any subpoena, give testimony, answer questions, or produce books, records, or papers as required by the board or the superintendent under this chapter, the board or the superintendent may apply to the court of common pleas of any county in the state setting forth the failure. Upon receiving such an application, the court may make an order awarding process of subpoena or subpoena duces tecum for the person to appear and testify before the board or the superintendent; order any person to give testimony and answer questions; and order any person to produce books, records, or papers, as required by the board or the superintendent. Up on the filing of such an order in the office of the clerk of the court of common pleas, the clerk, under the seal of the court, shall issue process or subpoena each day until the examination of the person is completed. The subpoena may contain a direction that the witness bring to the examination any books, records, or papers described in the subpoena. The clerk also shall issue, under the seal of the court, such other orders, in reference to the examination, appearance, and production of books, records, or papers, as the court directs. If any person summoned by subpoena fails to obey the subpoena, to give testimony, to answer questions as required, or to obey an order of the court, the court, on motion supported by proof, may order an attachment for contempt to be issued against the person charged with disobedience of the order. If the person is brought before the court by virtue of the attachment, and if upon a hearing the disobedience appears, the court may order the offender to be committed and kept in close custody.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.06 Applicants for appraisal management company license.

(A) To obtain an appraisal management company license, each applicant shall submit all of the following to the superintendent of real estate and professional licensing:

(1) A completed application on a form the superintendent provides;

(2) The name of a controlling person who will be the main contact between the appraisal management company and the division of real estate and professional licensing and the real estate appraiser board;

(3) Payment of the fee established for initial licensure under division (A)(2) of section 4768.03 of the Revised Code;

(4) A list of all owners and controlling persons of the appraisal management company;

(5) A statement that each owner and controlling person of the appraisal management company satisfies the requirements set forth in divisions (B)(1) to (4) of this section;

(6) A completed consent to service of process in this state as prescribed by rule of the real estate appraiser board;

(7) A statement that the applicant understands the grounds for any disciplinary action that may be initiated under this chapter;

(8) The name of each state in which the appraisal management company holds an appraisal management company license, certificate, or registration and affirmation that the applicant is in good standing in each state where the applicant holds a license, certificate, or registration;

(9) A statement that the applicant acknowledges that a system or process must be in place to verify that any appraiser added to the appraisal management company's appraiser panel for the purpose of performing real estate appraisal services in this state holds a license or certificate under Chapter 4763. of the Revised Code and is in good standing with this state;

(10) A statement that the applicant acknowledges that a system or process must be in place to review the work of appraisers who are performing real estate appraisal services for compliance with the uniform standards of professional appraisal practice;

(11) A statement that the applicant acknowledges that a system or process must be in place to verify that any employee of, or independent contractor to, the appraisal management company that performs an appraisal review shall be an appraiser licensed or certified pursuant to Chapter 4763. of the Revised Code, provided the property that is the subject of the appraisal is located in this state;

(12) A statement that the applicant acknowledges that the controlling person who will be the main contact between the appraisal management company and the division of real estate and professional licensing and the real estate appraiser board described in division (A)(2) of this section has successfully completed fifteen hours of uniform standards of professional appraisal practice and thereafter must complete seven hours of instruction in uniform standards of professional appraisal practice at least once every two years;

(13) A statement that the applicant acknowledges that a system or process must be in place to disclose to its client the actual fees paid to an appraiser for appraisal services separately from any other fees or charges for appraisal management services;

(14) A statement that the applicant acknowledges that a system or process must be in place to disclose the license, certificate, or registration number of the appraisal management company on each engagement letter used in assigning an appraisal request for real estate appraisal assignments within the state;

(15) A statement that the applicant acknowledges that it is required to report suspected violations of Chapter 4763. of the Revised Code by a person licensed, registered, or certified under that chapter;

(16) A statement that the applicant acknowledges that the real estate appraiser board or the superintendent may require the applicant to submit to an audit, conducted by staff of the division of real estate and professional licensing, of the applicant's operations or books;

(17) A statement that the applicant acknowledges that it is required to comply with section 129e of the "Truth in Lending Act," 82 Stat. 146, 15 U.S.C. 1639e.

(B) Each owner and controlling person of an appraisal management company shall satisfy all of the following criteria:

(1) Be an individual who is at least eighteen years of age;

(2) Have graduated the twelfth grade or received a certificate of high school equivalence as defined in section 4109.06 of the Revised Code;

(3) Be honest, truthful, and of good moral character;

(4) Have not had a license, certificate, or registration to act as an appraiser that has been refused, denied, canceled, surrendered, or revoked in this state or in any other state for a substantive reason. A designated controlling person may have had a license or certificate to act as an appraiser refused, denied, canceled, revoked, or surrendered in lieu of revocation in a state for a nonsubstantive reason if the license or certificate was subsequently granted or reinstated;

(5) Submit to a criminal records check in accordance with this section and any rule that the superintendent adopts under division (A)(1) of section 4768.03 of the Revised Code.

(C) Upon receiving an application under this section, the superintendent shall request the superintendent of the bureau of criminal identification and investigation, or a vendor approved by the bureau, to conduct a criminal records check based on the fingerprint impressions of each owner and controlling person of the applicant in accordance with division (A)(15) of section 109.572 of the Revised Code. Notwithstanding division (K) of section 121.08 of the Revised Code, the superintendent of real estate and professional licensing shall request that the superintendent of the bureau of criminal identification and investigation obtain criminal record information from the federal bureau of investigation be obtained as part of the criminal records check. Any fee required under division (C)(3) of section 109.572 of the Revised Code shall be paid by the applicant.

(D)

(1) Subject to section 4768.08 of the Revised Code and except as provided in division (D) (2) of this section, the superintendent shall issue a license to the applicant if the applicant and each owner and controlling person of the applicant satisfies the requirements of this section.

(2) The superintendent shall not issue a license to an applicant if any owner or controlling person of the applicant has been convicted of or pleaded guilty or no contest to a felony. However, if an owner or controlling person of the applicant has pleaded guilty or no contest to or been convicted of a felony, the superintendent shall not consider the conviction or plea if the person has proven to the superintendent, by a preponderance of the evidence, that the person's activities and employment record since the conviction or plea show that the person is honest, truthful, and of good moral character, and there is no basis in fact for believing that the person will commit a felony again.

(E) A license issued under this section shall be valid for one year after the date of issue.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.07 Renewal license.

(A) An appraisal management company licensed under this chapter may obtain a renewal license by filing an annual renewal application with the superintendent of real estate and professional licensing and paying the renewal fee established under division (A)(2) of section 4768.03 of the Revised Code. The renewal application shall include a statement, signed by the licensee's controlling person, that states all of the following:

(1) The licensee has a system or process in place to verify that any appraiser added to the appraisal management company's appraiser panel for the purpose of performing real estate appraiser services in this state holds a license or certificate under Chapter 4763. of the Revised Code and is in good standing with this state.

(2) The licensee has a system or process in place to review the work of appraisers who are performing real estate appraisal services for compliance with the uniform standards of professional appraisal practice.

(3) The controlling person of the licensee who is the main contact between the appraisal management company and the division of real estate and professional licensing and the real estate appraiser board described in division (A)(2) of section 47 68.06 of the Revised Code has successfully completed an initial fifteen hours of uniform standards of professional appraisal practice and thereafter completes seven hours of instruction in uniform standards of professional appraisal practice at least once every two years.

(4) The licensee has a system or process in place to disclose to its client the actual fees paid to an appraiser for appraisal services separately from any other fees or charges for appraisal management services.

(5) The licensee has a system or process in place to disclose the license, certificate, or registration number of the appraisal management company on each engagement letter used in assigning an appraisal request for real estate appraisal assignments within the state.

(6) Each owner and controlling person of the licensee continues to satisfy the requirements provided for under divisions (B)(1) to (4) of section 4768.06 of the Revised Code;

(7) The licensee acknowledges that it is required to report suspected violations of Chapter 4763. of the Revised Code by a person licensed, registered, or certified under that chapter;

(8) The licensee acknowledges that the real estate appraiser board or the superintendent may require the licensee to submit to an audit, conducted by the staff of the division of real estate and professional licensing, of the applicant's operations or books;

(9) The licensee acknowledges that it is required to comply with section 129e of the "Truth in Lending Act," 82 Stat. 146, 15 U.S.C. 1639e.

(B) The licensee shall file the renewal application at least thirty days, but not earlier than one hundred twenty days, prior to expiration of the license. Subject to section 4768.08 of the Revised Code, the superintendent shall renew the license if the applicant has complied with division (A) of this section. Each license renewed under this section shall expire one year after the date of renewal.

(C) A licensee who fails to renew a license prior to its expiration is ineligible to obtain a renewal license and shall comply with section 4768.06 of the Revised Code to regain licensure, except that a licensee may, within three months after the expiration of the license, renew the license without having to comply with section 4768.06 of the Revised Code by paying all the renewal fees and the late filing fee established under division (A)(2) of section 4768.03 of the Revised Code. A licensee who applies for late renewal of the licensee's license shall not engage in any activities permitted by the license being renewed during the three-month period following the license's normal expiration date until all renewal fees and the late filing fee have been paid.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.08 Grounds for denial of license.

The superintendent of real estate and professional licensing may refuse to issue a license to an applicant under this chapter based upon any act or omission for which a person, including a licensee, may be disciplined under division (K) of section 4768.13 of the Revised Code or may refuse to renew a license if the licensee has failed to comply with this chapter. If the superintendent refuses to issue or renew a license under this section, the superintendent shall notify the applicant or the licensee of the basis for the refusal. The notice shall comply with division (N) of section 4768.13 of the Revised Code, and the hearing shall be conducted in accordance with Chapter 119. of the Revised Code. An applicant or licensee may appeal the superintendent's decision to the real estate appraiser board, which shall provide the applicant or licensee with the opportunity to be heard in person or by counsel, or both. The decision and order of the board is final, subject to review in the manner provided in Chapter 119. of the Revised Code and appeal to the court of common pleas of Franklin county.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.09 Removal of appraiser from appraiser panel.

(A) Except within the first thirty days after an appraiser is first added to the appraiser panel of an appraisal management company, an appraisal management company shall not remove the appraiser from its appraiser panel or otherwise refuse to assign requests for real estate appraisal services to the appraiser without first doing both of the following:

(1) Notifying the appraiser in writing of the reasons the appraiser is being removed from the appraiser panel or is refused assignment requests for appraisal services;

(2) Providing the appraiser with an opportunity to respond to that notification, in writing, within ten business days after the appraisal management company sends the removal notification.

(B) The notice described in division (A)(1) of this section shall be sent by a delivery system that deliver sletters, packages, and other materials in its ordinary course of business with traceable delivery and signature receipt. An appraisal management company that sends such notice shall keep a copy of the notice for at least five years from the date the notice is sent to the appraiser.

(C) Nothing in this section prohibits an appraisal management company from suspending an appraiser from receiving assignment requests during the period described in division (A) (2) of this section.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.10 Recordkeeping.

(A) Each appraisal management company licensed under this chapter shall maintain all of the following items for a period of at least five years from the date the appraisal report is submitted to the client:

(1) The original or true copy of every request relating to the report that the appraisal management company receives from the client;

(2) The original or true copy of each request sent to an appraiser who is considered for the assignment;

(3) Copies of the appraisal report and all versions of that report.

(B) An appraisal management company shall include all of the following information in each appraisal assignment file:

(1) The name and contact information of both the appraisal management company and the individual from the appraisal management company involved in ordering the appraisal or, if the assignment is generated by an automated system, the name of that system;

(2) The amount of any fee paid to the appraiser for each assignment included in the appraisal assignment file and the time and method of payment;

(3) Details of all communications between the appraisal management company, the appraiser, and the client for each appraisal assignment included in the appraisal assignment file.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.11 Improper influence; prohibited acts.

(A) No employee, director, officer, or agent of an appraisal management company licensed under this chapter shall recklessly influence or attempt to influence the development, reporting, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in any other manner, including the following:

(1) Withholding or threatening to withhold timely payment for appraisal services rendered when the appraisal report or services rendered are provided in accordance with a contract between the parties;

(2) Withholding or threatening to withhold future business for an appraiser, or demoting or threatening to demote an appraiser, or terminating the relationship with or threatening to terminate the relationship with an appraiser;

(3) Expressly or impliedly promising future business, promotions, or increased compensation for an appraiser;

(4) Conditioning the assignment of an appraisal or the payment of an appraisal fee, salary, or bonus, on the opinion, conclusion, or valuation to be reached by, or on a preliminary estimate or opinion requested from, an appraiser;

(5) Requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report, or provide estimated values or comparable sales at any time prior to the appraiser's completion of an appraisal;

(6) Providing to an appraiser an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that the employee, director, officer, or agent of an appraisal management company may provide the appraiser with a copy of the sales contract for purchase transactions;

(7) Providing stock or other financial or nonfinancial benefits to an appraiser or any person related to the appraiser;

(8) Any other act or practice that impairs, or attempts to impair, an appraiser's independence, objectivity, or impartiality;

(9) Obtaining, using, or paying for a second or subsequent appraisal or ordering an automated valuation model in connection with a mortgage financing transaction, unless any of the following are true:

(a) There is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the loan file.

(b) The appraisal or automated valuation model is done pursuant to a bona fide pre- or post-funding appraisal review or quality control process.

(c) A second appraisal is required under state or federal law.

(10) Allowing the removal of an appraiser from the appraisal management company's appraiser panel without prior written notice as required under section 4768.09 of the Revised Code;

(11) Requiring an appraiser to indemnify the appraisal management company against liability, damages, losses, or claims other than those liabilities, damages, losses, or claims arising out of the services performed by the appraiser, including performance or nonperformance of the appraiser's duties and obligation, whether as a result of negligence or willful misconduct;

(12) Requiring an appraiser to perform an appraisal assignment if the appraiser declines the assignment and informs the appraisal management company that the appraiser is not competent to perform the appraisal assignment and the appraiser declines to acquire the necessary competency to perform the assignment;

(13) Requiring an appraiser who has notified the appraisal management company and declined the assignment to prepare an appraisal under a time frame that the appraiser, in the appraiser's own professional judgment, believes does not afford the appraiser the ability to meet all the relevant legal and professional obligations.

(B) Nothing in division (A) of this section shall be construed as prohibiting an appraisal management company from requesting that an appraiser do any of the following:

(1) Consider additional, appropriate property information, including the consideration of additional comparable properties, to make or support an appraisal;

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

(3) Correct objective factual errors in an appraisal report.

(C) No appraisal management company shall recklessly alter, modify, or otherwise change a completed appraisal report submitted by an appraiser, except that the format of the appraisal report may be modified solely for the purpose of transmission.

(D) Each appraisal management company shall require that appraisals be conducted independently and free from inappropriate influence and coercion pursuant to the appraisal independence standards established under section 129e of the "Truth in Lending Act," 82 Stat. 146, 15 U.S.C. 1639e.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.12 Compensation of appraisers.

(A) An appraisal management company licensed under this chapter shall compensate an appraiser for the completion of an appraisal within sixty days of the date on which the appraiser transmits or otherwise provides the completed appraisal to the appraisal management company or its assignees, except in cases of breach of contract or substandard performance of services.

(B)

(1) An appraisal management company licensed under this chapter shall compensate each appraiser who performs appraisal services for the appraisal management company in accordance with the appraisal independence standards established under section 129e of the "Truth in Lending Act," 82 Stat. 146, 15 U.S.C. 1639e.

(2) In the case of an appraisal involving a complex assignment, the customary and reasonable fee may reflect the increased time, difficulty, and scope of the work required for the appraisal, and may include an amount over and above the customary and reasonable fee for noncomplex assignments.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.13 Disciplinary actions.

(A) Within ten business days after a person files with the division of real estate and professional licensing a written complaint against a person licensed under this chapter or any other person, the superintendent of real estate and professional licensing shall acknowledge receipt of the complaint by sending notice to the person against whom the complaint is filed that includes a copy of the complaint. That notice and the acknowledgment to the complainant may state that an informal mediation meeting will be held with the complainant, the person against whom the complaint is filed, and an investigator from the investigation and audit section of the division, if the complainant and person both file a request for such a meeting within twenty calendar days after the acknowledgment and notice are mailed.

(B) If the complainant and the person against whom the complaint is filed both file with the division requests for an informal mediation meeting, the superintendent shall notify the complainant and the person of the date, time, and place of the meeting by regular mail. If the complainant and the person reach an accommodation at an informal mediation meeting, the investigator shall report the accommodation to the superintendent, the complainant, and the person against whom the complaint is filed and the file shall be closed upon the superintendent receiving satisfactory notice that the accommodation agreement has been fulfilled.

(C) If the complainant and the person against whom the complaint is filed fail to agree to an informal mediation meeting, fail to reach an accommodation agreement, or fail to fulfill an accommodation agreement, the superintendent shall assign the complaint to an investigator for an investigation into the conduct of the person against whom the complaint is filed.

(D) Upon the conclusion of the investigation, the investigator shall file a written report of the results of the investigation with the superintendent. The superintendent shall review the report and determine whether there exists reasonable and substantial evidence to justify disciplinary action against the person on a ground described in division (K) of this section.

(E) If the superintendent finds that reasonable and substantial evidence to justify disciplinary action against the person on a ground described in division (K) of this section does not exist, the superintendent shall notify that person and the complainant of that determination and the basis for the determination. Within fifteen business days after the superintendent notifies the complainant and the person against whom the complaint is filed of that determination, the complainant may file with the division a request that the real estate appraiser board review the determination. If the complainant files such request, the board shall review the superintendent's determination at the next regularly scheduled meeting held at least fifteen business days after the request is filed but not longer than six months after the request is filed. The board may hear the testimony of the complainant or the person against whom the complaint is filed at the meeting upon the request of that party. If the board affirms the determination of the superintendent, the superintendent shall notify the complainant and the person against whom the complaint is filed within ten business days thereafter. If the board reverses the determination of the superintendent, a hearing before a hearing examiner shall be held, and the complainant and the person against whom the complaint is filed shall be notified as provided in division (N) of this section.

(F) If the superintendent finds that reasonable and substantial evidence to justify disciplinary action against the person on a ground described in division (K) of this section does exist, the superintendent shall notify that person and the complainant of the determination. The person against whom the complaint is filed may request a hearing pursuant to Chapter 119. of the Revised Code. If a formal hearing is to be conducted, the superintendent shall appoint a hearing examiner to conduct the hearing in accordance with that chapter.

(G) In accordance with section 119.09 of the Revised Code, after conducting a hearing, the hearing examiner shall submit a report of findings of fact and conclusions of law with the superintendent, the board, the complainant, and the person against whom the complaint is filed. Within ten calendar days of receipt of the copy of the hearing examiner's report, the person against whom the complaint is filed and the division may file with the board objections to the hearing examiner's report, which shall be considered by the board before approving, modifying, or rejecting the hearing examiner's report. The board may hear the testimony of the complainant and the person against whom the complaint is filed upon request of those parties.

(H) At any time after the superintendent notifies a person against whom the complaint is filed of the superintendent's determination in accordance with division (F) of this section but before a hearing is held on the matter, the person may apply to the superintendent to enter into a settlement agreement regarding the alleged violation. The superintendent and the person shall comply with the requirements for settlement agreements established by rules adopted by the board under division (A) (3) of section 4768.03 of the Revised Code. If the parties enter into the settlement agreement, the hearing before the hearing examiner shall be postponed, and the board shall review the settlement agreement at its next regularly scheduled meeting. If the board disapproves the settlement agreement, the hearing before the hearing examiner shall be rescheduled.

(I) If, after review of the hearing examiner's report or the settlement agreement, the board determines that a ground for disciplinary action that is described in division (K) of this section exists against a person, the board shall order the disciplinary action the board considers appropriate, which may include any of the following:

(1) Reprimand of the person, if licensed under this chapter;

(2) Imposition of a fine, not exceeding twenty-five thousand dollars per violation;

(3) Suspension of a license issued under this chapter for a specific period of time;

(4) Revocation of a license issued under this chapter.

If the board approved a settlement agreement entered into pursuant to division (H) of this section in relation to the ground for disciplinary action, the disciplinary action shall not be inconsistent with that settlement agreement.

(J) The decision and order of the board is final, subject to review in the manner provided for in Chapter 119. of the Revised Code and appeal to the court of common pleas of Franklin county.

(K) The board may take any disciplinary action authorized by division (I) of this section against any person, including an appraisal management company licensed under this chapter, to which any of the following grounds apply:

(1) The person procured or attempted to procure a license under this chapter by knowingly making a false statement, submitting false information, refusing to provide complete information in response to a question in an application for licensure, or by any means of fraud or misrepresentation.

(2) The person paid, or attempted to pay, anything of value, other than the fees or assessments required by this chapter, to any member or employee of the board for the purpose of procuring a license under this chapter.

(3) The person offered, performed, or otherwise provided appraisal management services, without a license issued under this chapter, under a business structure that was designed to circumvent the requirements and prohibitions of this chapter.

(4) The person violated section 4768.09 of the Revised Code.

(5) The person violated section 4768.11 of the Revised Code.

(6) The person violated section 4768.12 of the Revised Code.

(7) The person failed to provide copies of records to the superintendent as required under this chapter or failed to maintain records, or include certain information in the appraisal assignment file, as required under section 4768.10 of the Revised Code.

(8) Entry of final judgment exists against a person licensed under this chapter on the grounds of fraud, deceit, misrepresentation, or coercion in the making of any appraisal of real estate.

(9) The person failed to provide notice to the board as required in division (M) of this section.

(10) The person failed to assist the superintendent in the investigation of complaints under division (A)(8) of section 4768.04 of the Revised Code.

(11) The license, certificate, or registration of the appraisal management company that was issued by another state was revoked or surrendered for a substantive reason. An appraisal management company may have had a license, certificate, or registration refused, denied, canceled, revoked, or surrendered in lieu of revocation in a state for a nonsubstantive reason if the license, certificate, or registration was subsequently granted or reinstated.

(12) If the person is an appraisal management company licensed under this chapter, the person failed to provide written notice to the division within fifteen days of changing the controlling person who is designated as the appraisal management company's main contact under division (A)(2) of section 4768.06 of the Revised Code.

(13) If the person is an appraisal management company licensed under this chapter, the person entered into a contractor an agreement with an appraiser who is not licensed or certified under Chapter 4763. of the Revised Code for the performance of real estate appraisal services.

(14) If the person is an appraisal management company licensed under this chapter, the person failed to verify that an appraiser added to the appraisal management company's appraiser panel is a licensed or certified appraiser under Chapter 4763. of the Revised Code who is in good standing with this state.

(15) If the person is an appraisal management company licensed under this chapter, the person failed to require that appraisals coordinated by the appraisal management company comply with the uniform standards of professional appraisal practice.

(16) An owner or controlling person of an appraisal management company was convicted of or pleaded guilty to a felony.

(L) Failure of a person, including a licensee under this chapter, to comply with a subpoena issued under division (B)(1) of section 4768.04 of the Revised Code is prima facie evidence of a violation of division (K)(7) of this section.

(M) A licensee shall notify the board within thirty days of any state agency's issuance of an order revoking or permanently surrendering any professional appraisal management company license, certificate, or registration issued by any public entity other than the division.

(N) Except as otherwise provided, all notices, written reports, and determinations issued pursuant to this section shall be mailed via certified mail, return receipt requested. If the notice, written report, or determination is returned because of failure of delivery or was unclaimed, the notice, written report, or determination shall be deemed served if the superintendent sends the notice, written report, or determination via regular mail and obtains a certificate of mailing of the notice, written report, or determination. Refusal of delivery by personal service or by mail is not failure of delivery and service is deemed to be complete.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.14 Investigations.

(A) Upon receipt of a written complaint or upon the superintendent of real estate and professional licensing's own motion, the superintendent may investigate any person that allegedly violated division (A)(1) of section 4768.02 of the Revised Code.

(B) If, after investigation, the superintendent determines there exists reasonable evidence of aviolation of division (A) (1) of section 4768.02 of the Revised Code, within fourteen business days after that determination, the superintendent shall send the party who is the subject of the investigation a written notice, by regular mail, that includes all of the following in formation:

(1) A description of the activity in which the party allegedly is engaging or has engaged that is a violation of division (A)(1) of section 4768.02 of the Revised Code;

(2) The applicable law allegedly violated;

(3) A statement informing the party that a hearing concerning the alleged violation will beheld before a hearing examiner, and a statement giving the date and place of that hearing;

(4) A statement informing the party that the party or the party's attorney may appear in person at the hearing and present evidence and examine witnesses appearing for and against the party, or the party may submit written testimony stating any positions, arguments, or contentions.

(C) At any time after the superintendent notifies a person of the superintendent's determination in accordance with division (B) of this section but before a hearing is held on the matter, the person may apply to the superintendent to enter into a settlement agreement regarding the alleged violation. The superintendent and the person shall comply with the requirements for settlement agreements established by rules adopted by the board under division (A)(3) of section 4768.03 of the Revised Code. If the parties enter into the settlement agreement, the hearing before the hearing examiner shall be postponed and the board shall review the settlement agreement at its next regularly scheduled meeting. If the board disapproves the settlement agreement, the hearing before the hearing examiner shall be rescheduled.

(D) The hearing examiner shall hear the testimony of all parties present at the hearing and consider any written testimony submitted pursuant to division (B)(4) of this section. At the conclusion of the hearing, the hearing examiner shall determine if there has been a violation of division (A)(1) of section 4768.02 of the Revised Code.

(E) After the conclusion of formal hearings, the hearing examiner shall file with the superintendent, the real estate appraiser board, the complainant, and the parties a written report setting forth the examiner's findings of fact and conclusions of law and a recommendation of the action to be taken by the superintendent. Within ten days of receiving a copy of that report, the parties and the division of real estate and professional licensing may file with the board written objections to the report. The board shall consider the objections before approving, modifying, or disapproving the report.

The board shall review the hearing examiner's report at the next regularly scheduled board meeting held at least fifteen business days after receipt of the hearing examiner's report. The board shall hear the testimony of the complainant or the parties.

(F) After reviewing the hearing examiner's report pursuant to division (E) of this section, or after reviewing the settlement agreement pursuant to division (C) of this section, the board shall decide whether to impose sanctions upon a party for a violation of division (A)(1) of section 4768.02 of the Revised Code. The board may assess a civil penalty in an amount it determines, not to exceed one thousand dollars per violation, not to exceed ten thousand dollars in aggregate. Each day aviolation occurs or continues is a separate violation. The board shall determine the terms of payment. The board shall maintain a transcript of the proceedings of the hearing and issue a written opinion to all parties, citing its findings and grounds for any action taken. If the board approved a settlement agreement entered into pursuant to division (C) of this section in relation to the violation, the civil penalty shall not be inconsistent with that settlement agreement.

(G) Civil penalties collected under this section shall be deposited in the real estate appraiser operating fund created under section 4763.15 of the Revised Code.

(H) If a party fails to pay a civil penalty assessed pursuant to this section within the time prescribed by the board, the superintendent shall forward to the attorney general the name of the party and the amount of the civil penalty, for the purpose of collecting that civil penalty. The party shall pay the fee assessed by the attorney general for collection of the civil penalty in addition to the civil penalty assessed pursuant to this section in an amount not to exceed ten thousand dollars.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.15 Deposits to real estate appraiser operating fund.

The superintendent of real estate and professional licensing shall deposit all moneys collected under this chapter into the state treasury to the credit of the real estate appraiser operating fund created under section 4763.15 of the Revised Code.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.

4768.99 Violations; penalties.

(A) Whoever violates division (A)(1), (2), (3), (4), (5), (6), (7), (8), or (9) or division (C) of section 4768.11 of the Revised Code is guilty of a felony of the fifth degree.

(B) Whoever violates division (A)(10), (11), (12), or (13) of section 4768.11 of the Revised Code is guilty of a misdemeanor of the first degree.

Added by 132nd General Assembly File No. TBD, HB 213, §1, eff. 12/14/2018.