Measure Approved to Set Standards for Appraisers : Bill Passed by Legislature Would Give the State Regulatory Powers Over Field for First Time

California’s more than 7,000 real estate appraisers, who have been expecting some type of state regulation, are about to get it.

Assembly Bill 3746 which defines standards for “certified” appraisals has passed the Legislature and is awaiting Gov. Deukmejian’s signature. Up to now, there have been no California regulatory outlines for property appraisal, nor has there been any state regulation for appraisers.

Last fall, Sen. Joseph Montoya (D-Whittier) introduced a spot bill--one that could receive additions or refinements--on appraisal methods because data from the Office of Senate Research indicated a need to standardize state appraisal procedures.

AB 3746, introduced by Assemblyman Bill Lancaster (R-Covina), a compromise of former SB 1601 and AB 3746, represents the first state effort to correct overvaluation and abuses in this field. Standards outlined in the bill are those now followed by reputable private firms in the business; these are expected eventually to be required by all lenders.

The current legislation dropped some contents of the original Montoya bill, which called for educational requirements for appraisers, for the testing of those entering the profession and for enforcement of the legislation by a state agency.

Although these more stringent requirements have been deleted, the amended bill would still make California appraisers vulnerable to civil damages if they produce “certified” appraisals not in compliance with the new legislated standards.

The California Assn. of Realtors, as well as the state’s Department of Real Estate, are expected to endorse the amended bill, according to Amiel Jaramillo, legislative assistant to Montoya.