Fighting Appraisal Board Complaints. Presented By Bob Keith, MAA

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1 Fighting Appraisal Board Complaints Presented By Bob Keith, MAA 1

2 Why Are We Here? Inherent risk of appraisal profession USPAP violations Lawsuits/Civil liability Inconsistent application of USPAP and/or sanctions Appraisers have a distinct disadvantage Unique perspective on appraisal regulation/uspap enforcement 2

3 Thank You! Organization of Real Estate Professionals (OREP)/Working RE Magazine OREP specializes in Errors and Omissions and General Liability Insurance for real estate appraisers and others I provide a member benefit to OREP to its members 3

4 OREP Member Benefits ½ hour free consultation 20% discount on my hourly rate for consultation with OREP members Exclusive benefit to OREP members This webinar is free Please consider OREP membership Encourage others to consider OREP membership 4

5 Webinar Objectives Know when and how to hire an attorney and/or another expert Avoid harmful pitfalls Learn how to write an effective complaint response to your state board Learn how to prepare for an investigative interview/informal hearing by your state board 5

6 Complaint/Investigation Process Varies widely between states Complaint filed with state licensing board - notifies appraiser in writing Requires written response along with copy of appraisal report and/or workfile 14 to 30 day time period to respond 6

7 Complaint/Investigation Process Investigation ensues Required to look beyond the allegations in the complaint Appraisal Subcommittee (ASC) Policy Statement 7 page 31 Who will be investigating your complaint? Outside contract reviewer (Standard 3?) Staff investigator Board member 7

8 Complaint/Investigation Process Investigative report Offer to settle Give up now and Admit or deny charges Fine, education, probation, mentorship, suspension, surrender, revocation 8

9 Complaint/Investigation Process Board issues a charging document Hearing before the Board or Administrative Law Judge Final ruling issued Sanctions imposed State Board reports sanction to the Appraisal Subcommittee (ASC) 9

10 Here Are The Facts Dealing with your state Board is: Frightening and scary Uncomfortable Emotionally taxing Time consuming Expensive 10

11 First Things First When should you hire an attorney Immediately upon receiving a complaint notice Why? Complaint notice starts an administrative law process Unfamiliar process Appraisers are unprepared 11

12 First Things First Admission of violations in initial response Once the bell rings, you can t un-ring it Maybe you did commit a violation Let your attorney decide when and how to admit it Perhaps avoid admission, or Mitigate impact 12

13 How Should You Choose an Attorney Not My Cousin Vinny! Real estate vs. administrative law experience Good attorneys know when and how to obtain expertise Another appraiser AQB Certified USPAP Instructor Other outside expert in appraisal regulatory matters 13

14 How Should You Choose an Attorney Prefer experience with appraiser licensing board Talk to several attorneys Compare costs Comfort level ability to communicate Talk to other appraisers sanctioned by the state board 14

15 Why Do Most Appraisers Not Engage Attorney? Too expensive I can handle it myself or its not that serious Attorneys don t know USPAP or appraisal Some states allow the State to recover legal fees and hearing costs 15

16 Alternatives Represent yourself Old axiom He who represents himself Engage outside expertise in appraisal, USPAP or appraiser regulatory matters Ultimately you must decide what s best for you 16

17 Impact of Disciplinary Action E&O costs escalate Dropped from approved appraiser panels State reports to ASC Professional and personal embarrassment Credibility as expert witness Impact of Surrender-in-lieu-of disciplinary action 17

18 Three Important Pitfall to Avoid Don t panic Don t procrastinate Immediately begin seeking resources to assist you 18

19 Reason Not to Panic Roughly 50% of complaints nationwide are dismissed There are many steps you can take to bring a favorable result 19

20 Don t Procrastinate Get Busy Right Away Contact E&O insurance company Failure could cancel policy benefit Inquire about coverage for: attorney defense of complaint another outside USPAP/appraiser regulatory expert Ask them for input on your response 20

21 Available Resources State appraisal statutes (laws) and rules/regulations Understand the administrative process Determine whether deadline extension are available USPAP Index FAQs Advisory Opinions 21

22 Available Resources Another appraiser AQB Certified USPAP Instructor appraisalfoundation.org click on USPAP Instructors on left menu bar Past board member or another person knowledgeable in appraisal regulatory matters 22

23 Helpful Suggestions Start a separate file for all Board communications Carefully read all documents provided with complaint notice Identify deadlines Understand what is required of you Ask questions about what you don t understand 23

24 Helpful Suggestions Read appraisal report thoroughly, multiple times Carefully examine every document in your workfile Drive subject and comps Be observant take notes Don t corrupt your workfile Keep all subsequent research, data, etc. separate 24

25 Helpful Suggestions Don t retroactively add to your workfile MLS printouts have the date printed on them Check out Tim Andersen s OREP webinar concerning workfiles 25

26 How to Write an Effective Response Organize in a clear and logical manner Mirror the complaint Make it easy for the Board to understand that you have addressed the issues in the complaint 26

27 How to Write an Effective Response Be professional Avoid responding to disparaging remarks in the complaint Plan on writing multiple drafts over multiple days Have a trusted person read your response Clarity Error free 27

28 How to Write an Effective Response Avoid rambling paragraphs with multiple topics Paragraph structure and length Be concise Address the allegations Don t use appraisal software addendum writer Don t use ALL CAPS Avoid spelling errors 28

29 29

30 Preparing for Investigative Interview or Informal Hearing Follow your attorney s advice Following suggestion are general guidelines 30

31 Preparing for Investigative Interview or Informal Hearing Learn about the process beforehand Opening statement? Question about allegations only? Alone or in a group (of others) Who is the audience? How long will it last? 31

32 Preparing for Investigative Interview or Make a good first impression Attire No fragrances Firm handshake Eye contact Smile Be friendly Never say I m nervous Informal Hearing 32

33 Preparing for Investigative Interview or Informal Hearing What to bring with you Calculator Bottle of (room temperature) water Tissue Appraisal report Workfile 33

34 Preparing for Investigative Interview or Informal Hearing Before the interview/informal hearing Prepare, Prepare, Prepare Know where everything is in your report/workfile Organize workfile Highlight key components of your appraisal report Use sticky notes/tabs 34

35 Preparing for Investigative Interview or Informal Hearing Bullet point (outline) major points response to allegations Use the complaint (or investigative report) as a guide. 35

36 During Your Actual Testimony Be respectful not argumentative Try not to directly admit errors/failures Be truthful Ask for questions to be repeated or restated, or If I understand your question correctly, you re asking 36

37 During Your Actual Testimony Only answer the question that was asked Be concise Don t chatter Pausing (silence) is okay give me moment (then cough and take a drink of water) 37

38 During Your Actual Testimony Don t guess I do not recall is an acceptable answer And my personal favorite I respect your viewpoint. However, as you know appraising is a judgment business and I believe this is one of those circumstances where reasonable professionals can disagree. 38

39 Conclusion Don t panic Don t procrastinate Get busy! Immediately begin seeking resources to assist you 39

40 Thank You! Bob Keith, MAA, IFA Valuation Compliance Resource, LLC (503)

MAI Esq s on Appraiser Defense Appraisal Institute National Conference Nashville, TN Tuesday, July 31 st Afternoon Session

MAI Esq s on Appraiser Defense Appraisal Institute National Conference Nashville, TN Tuesday, July 31 st Afternoon Session Steven J. Geller, MAI, Esq. Law Office of Steven J. Geller 319 Diablo Road, Suite