The Orange County Grand Jury Monday questioned a real estate policy in which a landowner seeking to swap property with the county is sometimes allowed to choose the appraiser who establishes the value of both parcels.
Under the policy, the landowner must choose the appraiser from a list provided by the county and must pay the appraiser's fee.
Robert Love, deputy director of the county General Services Agency, said the policy only applies to cases in which a single landowner is interested in the county property which cannot be sold on the open market. Love said those cases represent fewer than 5% of the county's property transactions.
The grand jury report said, however, that "this selection and payment process can lead to a loss of impartiality on the part of the appraiser." The report also said that property officials in San Diego and Riverside counties do not allow an outside party to choose the appraiser.
The grand jury's administration committee recommended that the county look into the practices of other counties "and develop a real estate appraisal procedure that ensures adequate appraiser independence and objectivity."
Bill B. Wills, chairman of the committee, also mitigated the findings, however, by saying he did not believe that the practice was as serious as he first believed.
"It seems to me the county has been well served by the process," Wills said. "We're recommending that they check other counties to see how they handle it, but I personally think they will find this is a good policy that they have."
Wills said there is an advantage because it deters people who aren't serious about a transaction by requiring them to pay the appraisal fee. And, he said, it can prevent disagreements over the appraisal.
Still, Wills said, there is "an appearance of a conflict of interest."
Love said he will respond to the grand jury's recommendation, which is only advisory, and check with other counties about their policies. He also defended the county's current procedures.
"We're only giving them a list of appraisers that we have confidence in," he said. "The list is developed based on our staff experiences."
"The advantage is also that the developer is paying the fee rather than the taxpayer," Love said. And, he said, it avoids disagreements that require the parties to seek a second appraisal.
"I'm not quite sure what the conflict is," he said.