For appraisers, the 87th legislature was an immense success. Both FACT legislative priority bills passed and have been signed into law.
HB 1939 Smith
– Relating to the limitations periods for certain suits against real estate appraisers and appraisal firms.
HB 2533 Darby
- Texas appraisers have been facing lawsuits alleging defects in appraisals performed for mortgage transactions from 10-15+ years ago. Under current law, the filing limit does not commence until the claimant discovers or should have discovered the alleged defect. This results in an almost infinite statute of limitations for claims against appraisers. HB 1939 implements a 5-year outer statute of limitations that will allow Texas appraisers the certainty that they will not be subjected to improper litigation years or even decades after the fact. The bill takes effect on September 1, 2021, and applies to a cause of action that accrues after that date. The bill has been signed by the Governor and will be effective September 1st, 2021.
– Relating to performance of an evaluation of real property for use by a financial institution.
- Federal lending regulators have recently raised the financials thresholds for when lenders can rely on “evaluations” in lieu of appraisals. Evaluations can be performed by non-appraisers and do not have to comply with stringent Uniform Standards of Professional Appraisal Practice (USPAP) requirements. However, under Texas law, and according to a recent Texas Attorney General’s opinion, licensed appraisers are obligated to make their evaluations USPAP compliant, creating an uneven playing field for licensed appraisers, and driving up costs for both lenders and borrowers. HB 2533 was signed by the Governor and took effect on June 14th – meaning that appraiser can immediately begin performing these evaluations. [Please make a note that evaluations performed by licensed appraisers must include must contain on the first page of the document the following notice: "This is not an appraisal performed in accordance with the Uniform Standards of Professional Appraisal Practice."] The bill has been signed by the Governor and will be effective immediately.