On April 28, Tennessee Gov. Bill Haslam signed into law HB 376 that will establish a new statute of limitations regarding civil lawsuits and disciplinary actions against real estate appraisers.
As enacted, any action to recover damages against a real estate appraiser must be brought within one year from the discovery of the act of omission giving rise to the action. However, in no event can an action be brought more than five years after the date the appraisal was performed.
Additionally, the Tennessee Real Estate Appraiser Commission cannot consider a complaint for a disciplinary acting that relates to an appraisal that was completed more than three years before the complaint was submitted. The new law will take effect July 1, and will apply to appraisals performed after that date.
This legislation is the result of lawsuits and administrative complaints that have been filed against appraisers in relation to appraisals performed many years ago. Many of these suits and complaints have been filed by receivers of failed financial institutions, and other entities that have purchased the rights to sue an appraiser. Most of the appraisals in question were performed 7-10 years ago during the real estate boom in the early to mid-2000's and have now defaulted.
In accordance with USPAP's five-year record keeping requirement, the appraisers against whom these suits have been filed often have very little, if any, ability to adequately defend themselves. In many cases, the appraisers have disposed of all the contents of their work file in relation to the appraisals in question. Appraisers will now have the certainty of knowing that they cannot be subject to civil suit or disciplinary action beyond the recordkeeping requirements contained in USPAP.
The Tennessee chapters of the Appraisal Institute, along with other coalition partners, proposed and advocated extensively for this legislation which passed the General Assembly unanimously.