Marcia Hultman

Cabinet Secretary

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Appraiser Certification Program

Appraisal Management Companies to Maintain Surety Bond

or Irrevocable Letter of Credit

The Department of Labor and Regulation, Appraiser Certification Program, pursuant to South Dakota Codified Law (SDCL) 36-21D, requires an applicant for issuance or renewal of an appraisal management company registration to file a surety bond with one or more corporate sureties authorized to do business in this state or an irrevocable letter of credit issued by an insured institution authorized to do business in this state in the amount of $25,000.

In accordance with SDCL 36-21D the following conditions apply for surety bond or irrevocable letter of credit:

  1. The appraisal management company shall pay all amounts owed to a person who performs a real estate appraisal service for the company and pay all amounts adjudged against the company by reason of a negligent or improper real estate appraisal, a negligent or improper appraisal management service, or breach of contract in performing a real estate appraisal or appraisal management service.
  2. The surety company or insured institution provides written notice to the department, by registered or certified mail, at least thirty days before the following occurs:
    1. Cancels or revokes a surety bond or irrevocable letter of credit, or
    2. Pays for a loss under the surety bond or irrevocable letter of credit.
  3. The appraisal management company shall continuously maintain the surety bond or irrevocable letter of credit on file with the department in the amount of $25,000.
  4. The appraisal management company shall file a replacement surety bond or irrevocable letter of credit within the specified time period or surrender the company’s registration to the department if the surety bond or irrevocable letter of credit is terminated, cancelled, or reduced to less than $25,000.

Renewal: In order to renew an appraisal management company registration, the appraisal management company is required to file a surety bond or irrevocable letter of credit with the renewal application. The surety bond's effective dates must be from Jan. 1, 2016 through Dec. 31, 2016 or "continuous." If the ending date of the surety bond is "continuous," proof of continuation of the bond must be submitted for subsequent renewals. Renewal applications will be mailed on or before Oct. 1, 2015 and are required to be completed and submitted along with the renewal fee and surety bond or irrevocable letter of credit to the department no later than Nov. 15, 2015.

New Applicants: In order to obtain an appraisal management company registration, the appraisal management company is required to file a surety bond or irrevocable letter of credit in the amount of $25,000. Applications for appraisal management company registration must include the application fee, surety bond or irrevocable letter of credit, and the Secretary of State of South Dakota certification for authority to conduct business in this state.

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