Bill Introduced in New Jersey to Amend Appraiser and AMC Laws to Include Prohibitions Against Discrimination

Update: A new bill (A-5185) has been introduced in NJ on this same subject with more detailed requirements. A new article has been posted here.

New Jersey has become the second state in which legislation has been introduced this year to address current allegations of discrimination in residential appraising. Introduced on December 14, the bill (A-5146) would establish jurisdiction for the New Jersey State Real Estate Appraiser Board to revoke, suspend or fine appraisers and appraisal management companies who knowingly engage in discriminatory appraisal practices regarding residential property based on the property buyer’s or owner’s race, religion or national origin.

This is the full text of the New Jersey bill:

1. a. A holder of a license or certification under [the Real Estate Appraisers Act] or registration under [the Appraisal Management Company Registration and Regulation Act] shall not discriminate in the appraisal of a residential property on the basis of the race, creed, color, or national origin of the property buyer or property seller.

b. If the board determines, after appropriate investigation, that the holder of a license, certification, or registration has knowingly engaged in the discriminatory appraisal of a residential property on the basis of the property buyer’s or property holder’s race, creed, color, or national origin, the board may suspend or revoke the license, certification or registration, levy a fine, or impose a civil penalty.

2. Whenever the board finds cause to fine or suspend or revoke the license, certification or registration of a holder, the board shall notify the holder of the reasons therefor, in writing, and provide opportunity for a hearing in accordance with the “Administrative Procedure Act,” . . . .

3. This act shall take effect immediately.

A press release regarding the bill indicated that the legislation would also include a requirement that home buyer’s be given a pamphlet by their agent or broker about how and where to file a discrimination complaint against an appraiser or AMC. Specifically, the press release stated the bill would require: “upon first interaction with a property buyer, a licensed real estate broker, broker-salesperson, or salesperson must make available to the property buyer a document, prescribed by the New Jersey Real Estate Appraiser Board, informing the property buyer of the opportunity to report, through the Division of Consumer Affairs’ website or telephone number, any suspicion of a discriminatory appraisal by the holder of a license, certification or registration based on a property buyer or seller’s race, creed, color, or national origin.” However, this proposal does not appear in the current text of the bill.

Unlike the recent similar bill introduced in Illinois, the New Jersey bill does not expressly provide for “a private right of action” – in other words, it does not create a specific right for property owners or buyers to sue for damages in court based on alleged violations of the discrimination prohibitions. However, it’s important for appraisers to understand that the right to sue for such damages does exist under the federal Fair Housing Act. What this bill creates is the specific jurisdiction of the appraiser board to pursue disciplinary actions based on complaints of discrimination.