2010 California Code :: Civil Code :: Article 7. Unlawful Influence Of Appraisers (2024)

1090.5. (a) No person with an interest in a real estate transactioninvolving an appraisal shall improperly influence or attempt toimproperly influence, through coercion, extortion, or bribery, thedevelopment, reporting, result, or review of a real estate appraisalsought in connection with a mortgage loan. Prohibited acts include,but are not limited to, the following: (1) Withholding or threatening to withhold timely payment for anappraisal. (2) Withholding or threatening to withhold future business for anindependent appraiser, including removal from approved panels ofappraisers. (3) Expressly or impliedly promising future business, promotions,or increased compensation for an independent appraiser. (4) Conditioning the request for an appraisal service or thepayment of an appraisal fee or salary or bonus on the opinion,conclusion, or valuation in an appraisal report, or on a preliminaryestimate or opinion requested from an independent appraiser. (5) Requesting the payment of compensation to achieve higherpriority in the assignment of appraisal business. (6) Requesting that an appraiser provide an estimated,predetermined, or desired valuation in an appraisal report, providingto an appraiser an anticipated, estimated, encouraged, or desiredvaluation in an appraisal report, or requesting that an appraiserprovide estimated values of comparable sales at any time before theappraiser completes an appraisal report. (b) Subdivision (a) does not prohibit a person with an interest ina real estate transaction from asking an appraiser to do any of thefollowing: (1) Consider additional, appropriate property information. (2) Provide further detail, substantiation, or explanation for theappraiser's value conclusion. (3) Correct errors in the appraisal report. (c) If a person who violates this section is licensed orregistered under any state licensing or registration law and theviolation occurs within the course and scope of the person's dutiesas a licensee or registrant, the violation shall be deemed aviolation of that law. (d) Nothing in this section shall be construed to authorizecommunications that are otherwise prohibited under existing law.

As an expert in real estate transactions and the legal nuances surrounding them, I can confidently delve into the intricacies of the California Civil Code, specifically Article 7, which pertains to the Unlawful Influence of Appraisers. My expertise stems from an in-depth understanding of the relevant legal codes, practical experience in the field, and a commitment to staying abreast of the latest developments in real estate law.

The California Civil Code Section 1090.5(a) is a crucial provision aimed at preventing improper influence in real estate transactions involving appraisals for mortgage loans. The statute explicitly prohibits various acts of coercion, extortion, or bribery that may compromise the development, reporting, result, or review of a real estate appraisal. These prohibited acts include withholding payment for an appraisal, threatening future business repercussions for independent appraisers, promising future business, promotions, or increased compensation, and conditioning payment on the opinion or valuation in an appraisal report.

The comprehensive list in Section 1090.5(a) encompasses actions that could undermine the independence and objectivity of appraisers, safeguarding the integrity of the appraisal process in mortgage transactions. The legislature has wisely anticipated potential pitfalls in real estate dealings and crafted a statute to curb such unethical practices.

It is noteworthy that Section 1090.5(b) provides exceptions, allowing individuals with an interest in a real estate transaction to make specific requests to appraisers. These requests include asking the appraiser to consider additional property information, provide further details for the value conclusion, or correct errors in the appraisal report. These exceptions strike a balance, permitting legitimate communication without compromising the appraiser's independence.

Moreover, the code establishes consequences for violations. Section 1090.5(c) specifies that if a person violating this section is licensed or registered under any state licensing or registration law, the violation is deemed a violation of that law. This underscores the seriousness with which the legal system regards attempts to exert improper influence in real estate transactions.

In conclusion, the California Civil Code Section 1090.5 is a pivotal piece of legislation designed to maintain the integrity of real estate appraisals in the context of mortgage transactions. Its detailed provisions, exceptions, and enforcement mechanisms collectively contribute to a robust legal framework that upholds ethical standards and ensures fair dealings in the real estate industry.