South Dakota Governor Signs Bill Regarding Real Estate Appraisal

On February 20, South Dakota Governor M. Michael Rounds signed H.B. 1124, a bill that prohibits real estate appraisers and licensed mortgage lenders, mortgage brokers, and mortgage loan originators from “improperly influencing” a real estate appraisal involving a property in which the appraiser or licensee has an interest with regard to (i) a real estate transaction or (ii) the financing of a loan secured by the real estate. The bill defines “improper influence” as (i) the use of coercion, extortion, bribery, (ii) withholding or threatening to withhold an appraisal fee, (iii) conditioning payment of an appraisal fee on the conclusion or valuation to be reached, (iv) requesting that the appraiser provide a predetermined conclusion or valuation, or (v) otherwise impairing the appraiser’s independence and objectivity in creating the appraisal. The bill provides that a real estate appraiser is not improperly influenced by, among other provisions, asking the appraiser to consider additional information in evaluating the conclusion on the appraisal or in requesting additional information about the conclusion reached on an appraisal. The bill becomes effective May 19, 2009.