Court Opinion

ID: 3265969
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:34:43.464318+00
Date Added: 2024-06-11T14:00:00.183365
License: Public Domain

Roy L. Bilheimer Executive Secretary Arkansas Real Estate Commission One Riverfront Place, Suite 660 North Little Rock, AR  72114
Dear Mr. Bilheimer:
This is in response to your request for an opinion regarding Pub.L. 100-73, Title XI, 1101 et seq. (August 9, 1989) ("Title XI"), which is codified as 12 U.S.C. § 3310 and 3331 et seq.  This body of law amends the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. § 3301 et seq.) by adding provisions calling for the use of state certified and/or licensed real estate appraisers in connection with federally related transactions, and by establishing an Appraisal Subcommittee within the Federal Financial Institutions Examination Council, which will monitor state certification and licensing systems.
You have asked, with regard to this federal legislation, whether or not the Arkansas Real Estate Commission could be the state agency designated to exercise authority and responsibility for administering the appraisal certification and licensing program.
A review of Title XI, and the language of the House/Senate Conference Committee Report accompanying the bill, indicates that appraisal and real estate functions may be in the same department of state government.*  This was also the conclusion of counsel for the American Institute of Real Estate Appraisers, as reflected in the memo attached to your request.  (See August 29, 1989 memo from Staff Attorney to State and Regional Coordinators, pages 2 and 7.) ___________. * The conference committee report states that "(t)he Conferees do not intend to impose any particular organization upon the States and a State may choose to have appraisal and real estate functions in the same department." ___________.
A final determination with regard to the propriety of the Arkansas Real Estate Commission exercising authority and responsibility for administering the appraiser certification and licensing program will, however, depend upon the exact manner in which the various functions are organized.  The conference committee report speaks in terms of insuring that there are adequate safeguards against potential conflicts of interest between appraisal and real estate functions.  The report states that "(d)ecisions as to whether or not to license and certify or to discipline . . . appraisers should not be made by the same state officials whose responsibilities include licensing realtors, or engaging in real estate promotion activities, or financing real estate development."
Thus, in response to your specific question, administration of the appraiser certification and licensing program by the Arkansas Real Estate Commission will in all likelihood be subject to disapproval by the federal Appraisal Subcommittee if the same officials are responsible for administering programs and requirements pertaining to appraisers and realtors. While it appears that the officials may be located in the same agency, conflicts of interest must be avoided between these two functions.
The National Association of Real Estate License Law Officials has, according to correspondence attached to your request, developed a Model Act and is in the process of meeting with representatives of the federal Appraisal Foundation to discuss areas of interest and concern.  A review of the Model Act may be helpful in establishing a program in Arkansas which will avoid the noted conflicts of interest.  Consultation with the national association would be advisable as a means of determining what type of program will likely meet the federal requirements.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.