Tex.
Occ. Code Section 1104.203
Prohibited Practices
(a)
An appraisal management company or an employee, director, officer, or agent of an appraisal management company may not:(1)
cause or attempt to cause the appraised value of a property assigned under an appraisal to be based on any factor other than the independent judgment of the appraiser;(2)
cause or attempt to cause the mischaracterization of the appraised value of a property in conjunction with a consumer credit transaction;(3)
seek to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of a consumer credit transaction;(4)
alter, modify, or otherwise change a completed appraisal report submitted by an appraiser by:(A)
altering or removing the appraiser’s signature or seal; or(B)
adding information to, removing information from, or changing information contained in the appraisal report, including any disclosure submitted by an appraiser in or with the report;(5)
condition the request for an appraisal or the payment of an appraisal fee, salary, or bonus on the opinion, conclusion, or valuation to be reached, or on a preliminary estimate or opinion requested from an appraiser;(6)
request that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report, or provide estimated values or comparable sales at any time before the appraiser’s completion of an appraisal;(7)
provide 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 a copy of the sales contract for a purchase transaction may be provided;(8)
make any part of the appraiser’s fee or the appraisal management company’s fee contingent on a favorable outcome, including:(A)
a loan closing; or(B)
a specific valuation being achieved by the appraiser in the appraisal report;(9)
withhold or threaten to withhold timely payment for an appraisal report or appraisal services rendered when the appraisal report or services are provided in accordance with the contract between the parties;(10)
withhold or threaten to withhold future business from an appraiser;(11)
demote or terminate or threaten to demote or terminate an appraiser;(12)
expressly or impliedly promise future business, promotions, or increased compensation for an appraiser;(13)
provide to an appraiser, or any person related to the appraiser, stock or other financial or nonfinancial benefits;(14)
allow the removal of an appraiser from an appraisal panel, without prior written notice to the appraiser;(15)
obtain, use, or pay for a second or subsequent appraisal or order an automated valuation model in connection with a mortgage financing transaction unless:(A)
there is a reasonable basis to believe that the initial appraisal was flawed or tainted and that basis is clearly and appropriately noted in the loan file;(B)
the subsequent appraisal or automated valuation model is done under a bona fide pre-funding or post-funding appraisal review or quality control process; or(C)
the subsequent appraisal or automated valuation model is otherwise required or permitted by federal or state law;(16)
prohibit legal and allowable communication between the appraiser and:(A)
the lender;(B)
a real estate license holder; or(C)
any other person from whom the appraiser, in the appraiser’s own professional judgment, believes information would be relevant;(17)
refuse to accept an appraisal report prepared by more than one appraiser if an appraiser provides substantial assistance to another appraiser in the preparation of the report, unless the appraisal assignment names an individual appraiser or the statement of work requires an unassisted report; or(18)
require an appraiser to:(A)
prepare an appraisal report if the appraiser, in the appraiser’s own professional judgment, believes the appraiser does not have the necessary expertise for the specific geographic area and the appraiser has notified the company of this belief;(B)
prepare an appraisal report under a schedule 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 if the appraiser has notified the company of this belief;(C)
provide the appraisal management company with the appraiser’s digital signature or seal;(D)
modify any aspect of an appraisal report without the appraiser’s agreement that the modification is appropriate;(E)
engage in any act or practice that does not comply with:(i)
the Uniform Standards of Professional Appraisal Practice; or(ii)
any assignment conditions and certifications required by the client;(F)
engage in any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality;(G)
enter into an agreement to not serve on the panel of another appraisal management company;(H)
indemnify or hold harmless the appraisal management company against liability except liability for errors and omissions by the appraiser; or(I)
pay a fee imposed on the appraisal management company under Section 1104.052 (Fees).(a-1)
For purposes of Subsection (a), a fee paid by an appraisal management company to an appraiser for appraisal services is not a financial benefit.(b)
Subsection (a) may not be construed to prohibit:(1)
an appraiser from reimbursing an appraisal management company for the actual cost of discretionary services provided to the appraiser;(2)
an appraiser from voluntarily providing the appraiser’s digital signature to another person;(3)
an appraisal management company from asking an appraiser, after a report is delivered, to:(A)
consider additional appropriate property information, including the consideration of additional comparable properties to make or support an appraisal;(B)
provide further detail, substantiation, or explanation for the appraiser’s value conclusion; or(C)
correct errors in the appraisal report;(4)
an appraisal management company from requiring an appraiser to provide advance notice of and an opportunity for the appraisal management company to participate in any legal and allowable communications between the appraiser and a lender; or(5)
a copy of an executed contract for a purchase transaction being provided to an appraiser.(c)
The board may institute a disciplinary action or impose an administrative penalty under Chapter 1103 (Real Estate Appraisers) against an appraiser who, while acting as an employee, officer, or agent of an appraisal management company, engages in conduct prohibited by Subsection (a).
Source:
Section 1104.203 — Prohibited Practices, https://statutes.capitol.texas.gov/Docs/OC/htm/OC.1104.htm#1104.203 (accessed Jun. 5, 2024).
