Program was implemented July 1, 1990, pursuant to enactment of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) by Congress. The mission of the Program is to certify, license and register appraisers to perform real estate appraisals in the state of South Dakota pursuant to Title XI (FIRREA). The purpose of the Program is to examine candidates, issue certificates, investigate and administer disciplinary actions to persons in violation of the rules, statutes and uniform standards, and approve qualifying and continuing education courses. Title XI intends that States supervise all of the activities and practices of persons who are certified or licensed to perform real estate appraisals through effective regulation, supervision and discipline to assure their professional competence.
Council members provide recommendations to the Secretary of the Department of Labor and Regulation in the areas of program administration in order to sustain a program that is consistent with Title XI. The Council meets quarterly in public forum. See our Advisory Council Web page for meeting information.
Fred M. Preator, State-Registered â€“ Sioux Falls, SD
Jennifer M. Pedersen, State-Certified Residential â€“ Rock Rapids, IA
Carrie A. Mann, State-Certified General â€“ Bismarck, ND
Lisa D. Stratmeyer, State-Registered â€“ Worthing, SD
Public information regarding disciplinary action taken against an appraiser is available upon written request to:
Department of Labor and Regulation
Appraiser Certification Program
445 East Capitol Avenue
Pierre, SD 57501
or email Sherry.Bren@state.sd.us.
Include in the request for information the name of the appraiser and the appraiser's city and state of residence. (Disciplinary action may include denial, suspension, censure, reprimand, or revocation of a certificate by the department.) (Administrative Rule of South Dakota (ARSD) 20:14:11:03)
The following disciplinary action has been taken by the Department of Labor and Regulation, Appraiser Certification Program:
Kim M. Doney, Box Elder, South Dakota â€“ Complaint Case # 10-378. The Department of Labor and Regulation entered an Order revoking the State-Licensed Appraiser Certificate of Kim M. Doney effective November 29, 2011 for violations of ARSD 20:14:06:01 (violation of the Uniform Standards of Professional Appraisal Practice, Standard 1 and 2).
ARSD 20:14:11:01.01. Anonymous complaints. Initiation of an investigation may be commenced upon receipt of an anonymous complaint if it meets the following criteria:
For the period January 1, 2011 through December 8, 2011, the Department has received six upgrade applications and initiated 21 complaint investigations.
Upgrades â€“ Four upgrades issued and two upgrades pending.
Complaints â€“ Three complaints dismissed, one temporary permit application withdrawn, one temporary permit application denied, and sixteen complaints pending.
Craig Steinley, State-Certified General
Pursuant to Administrative Rule of South Dakota (ARSD) 20:14:13:01 an applicant for renewal of a certificate or license must successfully complete the most current edition seven-hour National Uniform Standards of Professional Appraisal Practice Update course prior to June 30 of each even-numbered year.
South Dakota state-registered, state-licensed, state-certified residential and state-certified general appraisers must complete the 2012-2013 Edition of the 7-Hour National USPAP Update Course prior to June 30, 2012. (Certified or licensed appraisers by reciprocity should review the administrative rules regarding continuing education requirements for reciprocal appraisers found in ARSD 20:14:13:01.01(3)).
After the publication of the 2010-11 edition of USPAP, a series of five exposure drafts were released to obtain feedback on possible modifications for the 2012-13 edition. On April 8, 2011, the Appraisal Standards Board (ASB) approved and adopted modifications to the 2012-13 edition of the Uniform Standards of Professional Appraisal Practice (USPAP). These modifications include:
Administrative edits were also made to USPAP and all guidance material, including the USPAP Advisory Opinions and USPAP Frequently Asked Questions, for conformity and consistency. The details of the changes to the 2012-13 edition of USPAP can be read on the Appraisal Foundationâ€™s website, www.appraisalfoundation.org in a document entitled 2011 Summary of Actions Related to Proposed USPAP Changes.
Pursuant to South Dakota Codified Law (SDCL) 36-21D Appraisal Management Companies are to be registered in the State of South Dakota. There are currently 51 Appraisal Management Companies (AMCs) registered with the Appraiser Certification Program. The roster of registered AMCs is now available online in Adobe .pdf format*.
An AMC is required by Administrative Rule of South Dakota (ARSD) 20:77 to disclose its certificate of registration number within its engagement document with each utilized appraiser. Effective in January, an appraiser is required, pursuant to ARSD 20:14 to assure that the AMC is properly registered before accepting an appraisal assignment and include the companyâ€™s registration number in the appraisal report.
If an appraiser is unable to verify an AMC requesting appraisal services on the AMC Roster available on the website, the appraiser is advised to report the Company to the Appraiser Certification Program.
Department of Labor and Regulation
Appraiser Certification Program
445 East Capitol Avenue
Pierre, SD 57501
or email Sherry.Bren@state.sd.us.
South Dakota will, effective in January, begin requiring any individual applying for a State-Licensed Appraiser Certificate to verify 2,000 hours of acceptable appraisal experience. The Appraisal Subcommittee issued Bulletin No. 2011-01 on March 18, 2011, advising State Appraiser Regulatory Officials on compliance of certain provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
One of the provisions that affects appraisers under the jurisdiction of the South Dakota Appraiser Certification Program concerns mandatory Appraiser Qualifications Board (AQB) Criteria for credentialing of State licensed appraisers. Specifically, the requirement that only AQB-compliant appraisers are eligible to perform appraisals for federally related transactions (FRTs).
Pursuant to the Bulletin, for a State licensed appraiser to be eligible to perform appraisals for FRTs and remain on the National Registry with an active status, the appraiser must satisfy the minimum 2,000 hours of appraisal experience. The administrative rules regarding appraisers have been amended to require an applicant for State-Licensed Appraiser classification to verify 2,000 hours of appraisal experience.
If you have any questions, please feel free to contact the Appraiser Certification Program at 605.773.4608.
(Reprinted with permission from the Appraisal Institute. The article was originally published in the Third Quarter 2011 issue of Valuation magazine.)
By Morgan McDowell
Earthquakes, hurricanes, floods and fires can destroy homes and businesses in a matter of seconds, forcing appraisers to work under extraordinary circumstances for months or years to help communities rebuild. Three appraisers share their experiences working in the aftermath of some of the countryâ€™s worst disasters.
You Can Say 2011 Started with a Bang
First, a record-breaking blizzard blanketed the Midwest in early February; then a spate of tornadoes wreaked havoc across the Midwest and the Southeast in April and May, followed by massive flooding along the Mississippi River. More recently, an outbreak of wildfires devastated parts of the Southwest and California.
And those catastrophes are limited to the U.S.; worldwide weâ€™ve seen a volcanic eruption in Chile; a major earthquake and subsequent tsunami in Japan; and earthquakes in South America, Iran and New Zealand, to name a few. The turbulent first half of 2011 begs the question: How does the aftermath of natural disasters affect the appraisal world?
Large geographic areas are impacted, and the number of properties that suffer damage quickly add up. Property owners, mortgage lenders, insurance agencies â€“ basically anyone with an economic stake â€“ all depend on real estate appraisers to give them a number, and to give it quickly.
But itâ€™s not that simple.
It can take several years for appraisers to assess the impact of large-scale events, so while we donâ€™t yet know how appraisers will be affected by this yearâ€™s calamities, we can learn from appraisers who had assignments following such disasters as the Northridge, Calif., earthquake (1994), Hurricane Katrina (2005), the California Station Fire (2009) and the Nashville flood (2010).
Appraisers often see both positive and negative effects on their businesses following a natural disaster. Immediately afterward, appraisers typically see their business drop off because potential clients are trying to get their bearings and decide next steps. After the initial chaos and confusion settles down, appraisers often see a dramatic increase in business.
When Nashville experienced more than 13 inches of rain over two very wet days in 2010, the areaâ€™s lakes overflowed dams and the rivers exceeded a 500-year floodplain. The massive Gaylord Opryland Resort and Convention Center and nearby Opry Mills shopping mall were under several feet of water, and up to five blocks of the cityâ€™s downtown historic district flooded.
â€œThere were over 11,000 properties affected by the floods, and all had become potential appraisal assignments,â€ says James Atwood, SRA, of Nashville-based appraisal firm James B. Atwood, Inc. He personally appraised dozens of homes and condominiums while they still had several feet of standing water inside.
â€œThe initial response for all of us was shock and sorrow for all those affected,â€ Atwood says. â€œHowever, as time passed, members of the Nashville community rallied to help one another, shock gave way to productivity and the community moved to restore itself. Appraisers can contribute to the rebuilding of lives, homes and businesses while simultaneously increasing their own professional productivity.â€
However, the uptick in business is usually temporary, which, due to the circumstances, appraisers are generally happy about. â€œEventually, and thankfully, life gets back to normal and the need for specialized disaster appraisal services goes away,â€ Atwood says.
The Volatility of Aftermath Appraisals
An area that has experienced the upheaval of a natural disaster has diverse appraisal needs. In some cases, appraisers are called on to determine buyout prices for properties located in designated floodways that are being purchased with government funds, which is what occurred in Nashville and along the Gulf shore following Hurricane Katrina. Other times, appraisers offer forecasts and market research. In all situations, their work following destructive events can be highly volatile.
When appraisers work on behalf of property owners, their jobs often involve determining assessed value just prior to and just after an event in order to prove property loss for tax and insurance purposes. Unfortunately, in instances of widespread damage involving numerous cases, tax and insurance disputes can be commonplace.
Doug Singletary, Jr., SRA, of Gulfport, Miss.-based appraisal firm Doug Singletary & Associates, says that this issue â€œwas common after Katrina as insurance companies tried to get out of paying claims, asserting that the flood caused the damage, when, in fact, it was wind-driven water from a hurricane, which are two different issues.â€
Singletary personally witnessed complete property destruction, mostly the result of the massive rush of water driven almost a quarter mile inland by Hurricane Katrinaâ€™s 175-mph winds. Itâ€™s estimated the hurricane destroyed more than 300,000 homes and business and accounted for $96 billion in damage.
Steve Norris, MAI, of Pasadena, Calif.-based appraisal firm Norris Realty Advisors, also witnessed massive destruction â€“ and squabbling â€“ following the Northridge earthquake in 1994. The 6.7-magnitude quake caused an estimated $20 billion in damage, making it one of the costliest natural disasters in U.S. history.
Norris appraised many commercial properties following the earthquake and saw instances in which the owners/lenders of damaged properties tried to get out of paying for repairs, or tried to write off buildings as total losses because they were unable to rent them out. He often appeared in court to provide opinions during trials about the future income of properties.
â€œThe physical damage that occurs after an earthquake is immediate. The long-term damage happens in litigation,â€ Norris says.
The sheer mass of land and property affected by natural disasters, and the level of destruction they cause, have created many obstacles for appraisers. Often, the data and processes they typically use in the course of their jobs are unavailable or not applicable following a devastating event.
â€œOne of the greatest challenges is providing an â€˜as isâ€™ or â€˜afterâ€™ disaster value because of the lack of comparable sales,â€ Atwood says. â€œThe appraiser must become more proficient in developing an opinion of value that depends on measuring the costs to repair the property, measuring any loss of utility, and measuring a risk incentive that would account for all uncertainties involved in purchasing a property damaged by a disaster.â€ This can be tricky because it relies on what is essentially hypothetical data.
Another very real obstacle is simply gaining access to the property. Norris recalls the numerous collapsed freeways around Southern California following the Northridge earthquake that made travel difficult, if not impossible. Similarly, Singletary faced road blocks and razor wire around some of the hardest hit areas following Hurricane Katrina. Additionally, he faced martial law in some areas, as well as widespread criminal activity.
Another obstacle that appraisers face is in effect being asked to cut corners. When appraisers are retained by lenders to assess property damage, the assignments often require deep investigation, but time for that amount of due diligence is usually painfully short. In some cases, in the interest of time or a desire for a report of â€œno damage,â€ appraisers are pressured by lenders to do a â€œdrive-byâ€ appraisal to gauge surface damage, which, in most cases, does not tell the whole story.
Stephanie Coleman, MAI, SRA, senior manager, ethics and standards counseling at the Appraisal Institute, says, â€œAppraisers need to be sure they have the competency level required to assess damage, if that is what they are being asked to do.â€ Appraisers who report on damage without the necessary background knowledge could be in violation of the Uniform Standards of Professional Appraisal Practice, and would then be liable in any disputes. The Appraisal Institute has issued a Guide Note, offering advice on best practices for appraisers in this situation.
Norris echoes Colemanâ€™s warning: â€œIt is helpful to create a network of trained professionals to accompany you to provide additional professional opinions, such as engineers to conduct structural analysis or attorneys who understand the effects of structural defects on litigation issues. Youâ€™re not serving your client if you do not get a full picture of the impact on value.â€
Norris says that following the 2009 Station Fire that burned 160,577 acres and destroyed 209 structures â€“ making it the largest and deadliest of the 2009 California wildfires â€“ he received several calls from people claiming to be â€œinsurance specialistsâ€ who were engaging individual homeowners to file mass claims on fire damage. They were looking for an appraisal firm to do anywhere from 10,000 to 20,000 â€œbefore and afterâ€ appraisals in a short period of time, simply to validate their claims that the damage was real. Norris declined the offer and recommends that when appraisers engage with a company they donâ€™t know, they should get qualifications, ask the right questions and pay attention to warnings from law enforcement.
Appraising in the aftermath of a natural disaster often takes a personal toll. By nature of the profession, appraisers themselves are usually part of the community in which theyâ€™re assessing disaster damage and have often suffered their own losses. â€œMany local appraisers, myself included, as well as banks and mortgage companies, personally experienced damage or had their offices and computers and files destroyed,â€ Singletary says.
Often, clients â€“ who can very well be friends â€“ have not only lost homes and buildings but entire livelihoods. Others have lost loved ones. As such, itâ€™s important for the appraisers to respect the emotional state and needs of their clients and to keep their own emotions in check.
â€œThe most disturbing aftermath of a natural disaster of this magnitude, other than the loss from the storm, is that many people never recovered from their personal loss, and subsequently died, either directly or indirectly from the disruption of life,â€ Singletary says. â€œFor example, many older people lost homes that they had lived in their entire adult lives, and essentially gave up after losing everything. Although there is almost always more work for the appraiser after a disaster, from a personal standpoint, there is no amount of financial gain that is worth the personal loss in such a setting.â€