Minnesota Statutes 82C.17 – Reasonable and Customary Fees
Subdivision 1.Fees.
An appraisal management company shall compensate appraisers with fees that are reasonable and customary for appraisal services performed in the market area of the property being appraised.
Subd. 2.Evidence.
Terms Used In Minnesota Statutes 82C.17
- Appraisal: A determination of property value.
- Appraisal assignment: means an engagement for which an appraiser is retained to act, as a disinterested third party in giving an unbiased analysis, opinion, or conclusion relating to the nature, quality, value, or utility of named interests in, or aspects of, identified real estate. See Minnesota Statutes 82C.02
- Appraisal management company: means a corporation, partnership, sole proprietorship, subsidiary, unit, or other business entity that directly or indirectly performs the following appraisal management services:
(1) within a given 12-month period, as defined in section 82C. See Minnesota Statutes 82C.02
- Appraisal management services: means the process of directly or indirectly performing any of the following functions on behalf of a lender, financial institution, client, or any other person to:
(1) administer an appraiser panel;
(2) recruit, qualify, verify licensing or certification, and negotiate fees and service level expectations with persons who are part of an appraiser panel;
(3) receive an order for an appraisal from one person, and deliver the order for the appraisal to an appraiser that is part of an appraiser panel for completion;
(4) track and determine the status of orders for appraisals;
(5) conduct quality control of a completed appraisal prior to the delivery of the appraisal to the person that ordered the appraisal; or
(6) provide a completed appraisal performed by an appraiser to one or more clients. See Minnesota Statutes 82C.02
- Appraisal review: means the act of developing and communicating an opinion about the quality of another appraiser's work that was performed as part of an appraisal assignment, except that an examination of an appraisal for grammatical, typographical, or other similar errors that do not make a substantive valuation change shall not be an appraisal review. See Minnesota Statutes 82C.02
- Appraiser: means a person who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective, and who is licensed under chapter 82B. See Minnesota Statutes 82C.02
- Appraiser panel: means a network of licensed or certified appraisers who are independent contractors to the appraisal management company that have:
(1) responded to an invitation, request, or solicitation from an appraisal management company, in any form, to perform appraisals for persons that have ordered appraisals through the appraisal management company, or to perform appraisals for the appraisal management company directly, on a periodic basis, as requested and assigned by the appraisal management company; and
(2) been selected and approved by an appraisal management company to perform appraisals for any client of the appraisal management company that has ordered an appraisal through the appraisal management company, or to perform appraisals for the appraisal management company directly, on a periodic basis, as assigned by the appraisal management company. See Minnesota Statutes 82C.02
- Client: means any person or entity that contracts with, or otherwise enters into an agreement with, an appraisal management company for the performance of real estate appraisal services or appraisal management services. See Minnesota Statutes 82C.02
- Contract: A legal written agreement that becomes binding when signed.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- state: extends to and includes the District of Columbia and the several territories. See Minnesota Statutes 645.44
Terms Used In Minnesota Statutes 82C.17
- Appraisal: A determination of property value.
- Appraisal assignment: means an engagement for which an appraiser is retained to act, as a disinterested third party in giving an unbiased analysis, opinion, or conclusion relating to the nature, quality, value, or utility of named interests in, or aspects of, identified real estate. See Minnesota Statutes 82C.02
- Appraisal management company: means a corporation, partnership, sole proprietorship, subsidiary, unit, or other business entity that directly or indirectly performs the following appraisal management services:
(1) within a given 12-month period, as defined in section 82C. See Minnesota Statutes 82C.02
- Appraisal management services: means the process of directly or indirectly performing any of the following functions on behalf of a lender, financial institution, client, or any other person to:
(1) administer an appraiser panel;
(2) recruit, qualify, verify licensing or certification, and negotiate fees and service level expectations with persons who are part of an appraiser panel;
(3) receive an order for an appraisal from one person, and deliver the order for the appraisal to an appraiser that is part of an appraiser panel for completion;
(4) track and determine the status of orders for appraisals;
(5) conduct quality control of a completed appraisal prior to the delivery of the appraisal to the person that ordered the appraisal; or
(6) provide a completed appraisal performed by an appraiser to one or more clients. See Minnesota Statutes 82C.02
- Appraisal review: means the act of developing and communicating an opinion about the quality of another appraiser's work that was performed as part of an appraisal assignment, except that an examination of an appraisal for grammatical, typographical, or other similar errors that do not make a substantive valuation change shall not be an appraisal review. See Minnesota Statutes 82C.02
- Appraiser: means a person who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective, and who is licensed under chapter 82B. See Minnesota Statutes 82C.02
- Appraiser panel: means a network of licensed or certified appraisers who are independent contractors to the appraisal management company that have:
(1) responded to an invitation, request, or solicitation from an appraisal management company, in any form, to perform appraisals for persons that have ordered appraisals through the appraisal management company, or to perform appraisals for the appraisal management company directly, on a periodic basis, as requested and assigned by the appraisal management company; and
(2) been selected and approved by an appraisal management company to perform appraisals for any client of the appraisal management company that has ordered an appraisal through the appraisal management company, or to perform appraisals for the appraisal management company directly, on a periodic basis, as assigned by the appraisal management company. See Minnesota Statutes 82C.02
- Client: means any person or entity that contracts with, or otherwise enters into an agreement with, an appraisal management company for the performance of real estate appraisal services or appraisal management services. See Minnesota Statutes 82C.02
- Contract: A legal written agreement that becomes binding when signed.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- state: extends to and includes the District of Columbia and the several territories. See Minnesota Statutes 645.44
(a) An appraisal management company can evidence that the fees paid to an appraiser were reasonable and customary through:
(1) objective third-party information, including, but not limited to, government agency fee schedules or academic studies. An academic study used must exclude appraisal assignments ordered by an appraisal management company; or
(2) reviewing each of the following factors and making adjustments to recent fees paid for appraisal services performed in the market area:
(i) the type of property appraised;
(ii) the scope of the appraisal work;
(iii) the time in which the appraisal service must be performed;
(iv) appraiser qualifications;
(v) appraiser experience and professional record; and
(vi) appraiser work quality.
(b) The fees paid for a complex appraisal assignment shall reflect the increased time, difficulty, and scope of work required.
(c) An appraisal management company shall maintain written documentation describing and substantiating all methods and information used to determine the customary and reasonable fees required by this section.
Subd. 3.Reporting.
(a) An appraisal management company shall separately state to the client the following:
(1) the fees paid to an appraiser for appraisal services; and
(2) the fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser’s services.
(b) An appraisal management company shall not prohibit an appraiser who is part of an appraiser panel from recording the fee that the appraiser was paid by the appraisal management company for the appraisal within the appraisal report that is submitted by the appraiser to the appraisal management company.
(c) An appraisal management company shall not include fees for appraisal management services performed by the company in the amount the company reports as charges for the appraisal by the appraiser.
Subd. 4.Timely payment.
Except in the case of breach of contract or an appraisal that contains one or more documented errors of law, regulation, appraisal standards, or reasonable requirements of the appraisal management company that have not been corrected by an appraiser, an appraisal management company shall pay an independent contractor appraiser for the completion of an appraisal or appraisal review:
(1) within 30 days of the appraiser providing the appraisal report to the appraisal management company or within 30 days of the date the appraisal report is transmitted to the client by an appraisal management company, whichever is sooner; or
(2) in accordance with a payment schedule agreed to in writing by the appraiser and the appraisal management company.