BLOG VIEW: The beginning of 2018 brought changes for real estate appraisers in South Carolina. As of February, to operate as an appraiser in the state, one needs to register with the Real Estate Appraisers Board at the South Carolina Department of Labor, Licensing and Regulation. The amendments were set in the Appraisal Management Company Registration Act, which was signed in May 2017.
The registration process entails meeting a number of requirements. Another new bill, which has passed the senate but is not yet enacted, may additionally alter the criteria set by the board. Senate Bill 877 would allow real estate appraisal management companies (AMCs) to provide a financial security in the form of a surety bond.
What follows are the main regulatory changes AMCs face in South Carolina.
The New Registration Process
According to the new rules, all AMCs need to undergo the registration process with the Real Estate Appraisers Board. That means each AMC will need to complete the official registration form.
The AMC also must submit the following documents, so that its candidature is considered complete:
- The corporate resolution setting the authority for the controlling person if the business is incorporated;
- A copy of the personal documents of the controlling person;
- Verification of Lawful Presence (should be completed by the controlling person);
- Attachment A – for all persons with a 10% or more ownership in the company; and
- Attachment B – a detailed financial statement of the company.
In the registration form, the AMC must present information, such as details about the controlling person and the business entity.
Registration renewal should have been done via the board before June 30. The procedure set is available via the online renewal form.
The Bonding Changes
Senate Bill 877 was enrolled on May 4. It amends Section 40-60-330(B)(11) of the 1976 South Carolina Code that pertains to appraisers. It replaces the requirement for real estate appraisal management companies to provide a detailed financial statement with posting a surety bond instead. The bond must be in the amount of $50,000.
Surety bonds function as an extra layer of protection for the state and for the general public. A bond can provide a financial reimbursement to harmed parties in case they suffer damages as a result of illegal actions by an appraiser. They can seek a compensation up to the bond amount.
In order to get bonded, an AMC has to cover only a small percentage of the required bond. If its finances are in good shape, the premium is between 1% and 5%. This means that if the AMC’s credit score is good, and its overall bond application is stable, it can pay as little as $500 to $2,500 for the bond.
Vic Lance is the founder and president of Lance Surety Bond Associates.