‘Customary and Reasonable’ fee’s required in North Carolina

North Carolina has passed legislation that appraisal management companies must pay customary and reasonable fees to appraisers. Active enforcement is in place now. North Carolina is joining the growing list of states that are being proactive on the Dodd Frank requirement of Customary and Reasonable. Kentucky, Texas, and North Carolina are just a few.

Below is the email and guidance document issued from the North Carolina Board.

To all appraisers, appraisal management companies, and interested persons:

As you may know, as of January 1, 2017, pursuant to SL 2016-61, appraisal management companies will be required to pay customary and reasonable fees to appraisers. The North Carolina Appraisal Board plans to undergo rulemaking regarding the enforcement of this law. Until rulemaking is completed, the Board has adopted a Guidance Document to implement the law on an interim basis.

The Guidance Document sets out two presumptions of compliance with the law.  One of those ways is to pay a fee based on a government fee schedule. The Appraisal Board takes the position that the VA fee schedule is a government fee schedule, and paying the VA fee results in a presumption of compliance with the law.

It is important to note that the Board does not require appraisal management companies to pay the VA fee for every assignment. The VA fee is simply one method of compliance for an AMC. An AMC may pay a fee that is higher or lower, but must be able to show compliance with the law if a complaint is filed regarding the fee.

Below is the Guidance Document that was unanimously approved at the Board’s December 13, 2016 meeting.

If you have any questions, please feel free to contact staff.

Charles McGill, Chairman

 

Donald Rodgers, Executive Director

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