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August 31, 2010

Relocation Expenses Not Compensable as "Mitigation" for Lost Goodwill

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Relocation Expenses Not Compensable as "Mitigation" for Lost Goodwill

By: F. Gale Connor
08/16/10

 

Is it rational to spend in excess of $1,000,000 to move and reestablish a business worth only $126,000?  Putting aside the rhetorical nature of this question, the owners of a catering truck supply company who spent more than $1.3 million to move and reestablish their business, learned the hard way that it is not. 

In Los Angeles Unified School District v. Rudy Casasola (opinion filed August 5, 2010), the Court of Appeal for the Second Appellate District waded into the murky relationship between the Eminent Domain Law (CCP §§1230.010, et seq.), which provides compensation for lost business goodwill in eminent domain actions, and the Relocation Assistance Act (Gov. Code §§7260, et seq.), which provides recovery for moving and reestablishment expenses caused by public projects in a separate administrative proceeding.  The Casasola decision expanded on the statutory distinctions between relocation expenses and loss of business goodwill.  As a result, despite the fact that many of the expenses incurred by the business owners were non-compensable under the Relocation Assistance Act, the Casasola court concluded that they were not recoverable in the eminent domain action either.

To understand how the Casasolas found themselves in this predicament, one must understand the interplay between the Eminent Domain Law and the Relocation Assistance Act.  Under the Eminent Domain Law, the owner of a business conducted on property taken must take such steps as a "reasonably prudent person" would take to mitigate the loss of goodwill (C.C.P. §1263.510(a)(2)).  This often involves a relocation of the business, for which compensation may be sought under the Relocation Assistance Act.  Such compensation is, however, "independent of the condemnation proceedings."  (Baldwin Park Redevelopment Agency v. Irvine (1984) 156 Cal.App.3d 428, 438.)  But a business owner's effort to mitigate the loss of goodwill – such as relocating the business – may also become part of the claim for lost goodwill.  (People Ex Rel. Dept. of Transportation v. Muller (1984) 36 Cal.3d 263, 271-272.) 

Whether the Eminent Domain Law (§1263.510(a)) requires that moving and related expenses be paid only under the Relocation Assistance Act, or whether it merely prohibits double payment for expenses that could potentially be recouped under either statute, was addressed by the Court in Redevelopment Agency of the City of Emerville v. Arvery Corporation (1992) 3 Cal.App.4th 1357.  The Arvery Court concluded that expenses which may be characterized as moving or reestablishment expenses under the Relocation Assistance Act are recoverable solely thereunder, and not in an eminent domain action.  Thus, a business owner seeking compensation for mitigation expenses as part of a loss of goodwill claim must prove that such expenses are not recoverable under the Relocation Assistance Act.  (Id. at 1364)

In Casasola, the business owners conceded that the expenses for which they claimed reimbursement were "relocation" expenses.  That is, they were expenses incurred to relocate their catering business from the condemned property to the relocation site.  A significant amount of these expenses were in the nature of "reestablishment expenses," meaning costs associated with setting up the new location to match the business' needs.  Under the Relocation Assistance Act, compensation for such expenses are capped at $10,000.  (Gov. Code §7260(a)(4).)  For this and other reasons, the School District disallowed the $1.3 million claim, while paying only $224,252 for relocation and reestablishment expenses. 

In an attempt to circumvent the Arvey decision, the Casasolas argued that since their $1.3 million in relocation expenses were not compensable under the Relocation Assistance Act, and were actually and reasonably incurred to mitigate loss of goodwill, they were compensable as mitigation expenses under Muller and §1263.510. 

The courts in both the Arvey and Casasola cases wrestled with the fact that although the goodwill code section and the Relocation Assistance Act were codified in separate codes, they concern related subject matters.  Both address compensation for a business forced to move when property is taken by eminent domain.  In an effort to harmonize these statutes, the Arvey court concluded that a displaced business owner could not recover under the Eminent Domain Law expenditures expressly recoverable under the Relocation Assistance Act.  The Casasola court took this analysis one step further.  It concluded that a displaced business owner may not recover under the Eminent Domain Law expenditures expressly deemed nonrecoverable under the Relocation Assistance Act, either because they are part of a class of nonrecoverable expenses or because they exceed the $10,000 cap on reestablishment expenses. 

The Casasola court acknowledged an apparent disconnect between the Legislature's decision to make moving expenses fully compensable while capping reestablishment expenses at $10,000.  However, the Court noted that it could not second guess the way in which the Legislature fashions a statutory remedy.  Thus, the Court concluded, the Casasolas' interpretation of the goodwill code section as permitting compensation for all actual and reasonably incurred, but otherwise uncompensated relocation expenses, "would render meaningless the carefully drawn statutory distinction between these categories of expenses." 

The Casasola court left the door open for recovery of expenses incurred to mitigate loss of goodwill.  However, if the "mitigation" expenses are in fact "relocation" expenses, they will either be compensable under the Relocation Assistance Act or not at all.

Gale Connor is a Partner in the Eminent Domain Practice Group. He has a distinguished practice encompassing many aspects of real property law and is experienced in eminent domain, commercial leasing, acquisition and disposition of improved and unimproved properties, real estate finance, and litigation of environmental, title, land use, construction, condemnation, and inverse condemnation cases. Gale can be reached at (415) 438-7240 or gconnor@nossaman.com.

 

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Appraisal Institute Busted for RACISM

Appraisal Institute Busted for RACISM 

LEXSEE 442 F SUPP 1072

UNITED STATES OF AMERICA, Plaintiff, v. THE AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS OF THE NATIONAL ASSOCIATION OF REALTORS, THE SOCIETY OF REAL ESTATE APPRAISERS, THE UNITED STATES LEAGUE OF SAVINGS ASSOCIATIONS, and THE MORTGAGE BANKERS ASSOCIATION OF AMERICA, Defendants

No. 76 C 1448

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

442 F. Supp. 1072; 1977 U.S. Dist. LEXIS 12760; 24 Fed. R. Serv. 2d (Callaghan) 880

; ;

 

November 23, 1977

CASE SUMMARY:

 

PROCEDURAL POSTURE: Defendants, institute and other organizations and individuals, filed a motion in the court for leave to intervene and oppose a proposed settlement agreement between plaintiff United States and the institute arising from a lawsuit under the Fair Housing Act (Act), 42 U.S.C.S. § 3601 et seq. The settling parties applied for entry of the proposed settlement order, approval of a settlement agreement, and a confidentiality order.

Defendants, institute and other organizations and individuals, filed a motion in the court for leave to intervene and oppose a proposed settlement agreement between plaintiff United States and the institute arising from a lawsuit under the Fair Housing Act (Act), The settling parties applied for entry of the proposed settlement order, approval of a settlement agreement, and a confidentiality order.

OVERVIEW: The United States filed a lawsuit against the institute and the other organizations pursuant to 42 U.S.C.S. § 3613, to secure relief from alleged violations of the Act, Title VIII of the Civil Rights Act of 1968. The institute's motion to intervene as of right under Fed. R. Civ. P. 24(a)(2) was before the court. The court denied the institute's motion to intervene, but granted an individual's motion for leave to intervene permissively under Fed. R. Civ. P. 24(b) solely for the purpose of contesting the legality of the settlement agreement insofar as it infringed his constitutional right to freedom of speech. The court approved the settlement order, the agreement, and the confidentiality order between the United States and the institute. The court found that the United States had stated a claim for relief under the terms of the Act. The court determined that the failure to submit the proposed settlement order to the membership for approval did not evidence inadequacy of representation, in light of the by-laws and a state statute. The court concluded that the institute's entry into the settlement agreement did not amount to a failure to fulfill its duty to represent its members.

The United States filed a lawsuit against the institute and the other organizations pursuant to , to secure relief from alleged violations of the Act, Title VIII of the Civil Rights Act of 1968. The institute's motion to intervene as of right under was before the court. The court denied the institute's motion to intervene, but granted an individual's motion for leave to intervene permissively under solely for the purpose of contesting the legality of the settlement agreement insofar as it infringed his constitutional right to freedom of speech. The court approved the settlement order, the agreement, and the confidentiality order between the United States and the institute. The court found that the United States had stated a claim for relief under the terms of the Act. The court determined that the failure to submit the proposed settlement order to the membership for approval did not evidence inadequacy of representation, in light of the by-laws and a state statute. The court concluded that the institute's entry into the settlement agreement did not amount to a failure to fulfill its duty to represent its members.

OUTCOME: The court denied the institute's motion to intervene and oppose a proposed settlement arising from the United States' lawsuit against the institute and the other organizations and individuals under the Act. The court approved the settlement order, the settlement agreement, and the confidentiality order between the United States and the institute and ordered their immediate entry.

The court denied the institute's motion to intervene and oppose a proposed settlement arising from the United States' lawsuit against the institute and the other organizations and individuals under the Act. The court approved the settlement order, the settlement agreement, and the confidentiality order between the United States and the institute and ordered their immediate entry.

 

JUDGES: [**1] George N. Leighton United States District Judge.

George N. Leighton United States District Judge.

OPINION BY: LEIGHTON

LEIGHTON

OPINION

[*1076] Memorandum

Before the Honorable George N. Leighton United States District Judge

This cause is before the court on the motion of F. Gregory Opelka and 71 other individuals for leave to intervene and oppose a proposed settlement agreement between plaintiff United States and defendant American Institute of Real Estate Appraisers (hereinafter "AIREA" or "Institute"). Also, the settling parties have applied for entry of the proposed settlement order, approval of the settlement agreement and a confidentiality order between the United States and AIREA. For the following reasons, the motion to intervene as of right under Rule 24(a)(2), F.R.Civ.P., is denied; but the court grants Opelka leave to intervene permissively under Rule 24(b), F.R.Civ.P., solely for the purpose of contesting the legality of the settlement agreement insofar as it may infringe his constitutional right to freedom of speech. Further, the settlement order, the agreement, and the confidentiality order between the United States and AIREA are approved; their immediate entry is ordered.

I.

On April 16, 1976, the United States filed [**2] this suit against four organizations: The American Institute of Real Estate Appraisers, the Society of Real Estate Appraisers, the United States League of Savings Associations, and the Mortgage Bankers Association of America, pursuant to 42 U.S.C. § 3613, to secure relief from alleged violations of the Fair Housing Act, Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3601, et seq. [hereinafter the "Fair Housing Act"]. The complaint alleges that since the effective date of the Fair Housing Act, defendants have engaged in unlawful discriminatory practices by promulgating standards which have caused appraisers and lenders to treat race and national origin as negative factors in determining the value of dwellings and in evaluating the soundness of home loans; and by failing to take adequate steps to correct the continuing effect of past discrimination and ensure non-discrimination by appraisers and lenders whose practices are subject to the influence or authority of the four organizations. Defendants' practices, it is alleged, have made dwellings unavailable to persons because of race and national origin; denied home loans to such persons; and have interfered with their [**3] exercise and enjoyment of rights secured by the Fair Housing Act in violation of 42 U.S.C. §§ 3604(a), 3605, and 3617. The United States seeks injunctive and declaratory relief from these alleged violations. Jurisdiction is invoked under 42 U.S.C. § 3613 and 28 U.S.C. § 1345.

After extensive negotiations, which included development of an affirmative action program, 1 the United States and AIREA have agreed not to seek a litigated resolution of their controversy. Instead, they have applied for entry of a settlement order which incorporates a proposed settlement agreement and affirmative action program. The agreement is divided into two parts: (1) the affirmative action program (Pts. I-VI); and (2) a plan for implementation [*1077] of the agreement and resolution of the litigation (Pts. VII-VIII).

1 The affirmative action program is, to a large extent, the product of negotiations between AIREA and the United States Department of Housing and Urban Development's Office of Fair Housing and Equal Opportunity, Office of Voluntary Compliance (hereinafter "OFHEO/OVC").

[**4] In the affirmative action section, it is agreed that AIREA will adopt three fundamental policy statements:

 

(1) It is improper to base a conclusion or opinion of value upon the premise that the racial, ethnic, or religious homogeneity of the inhabitants of an area or of a property is necessary for maximum value.

(2) Racial, religious or ethnic factors are deemed unreliable predictors of value trends or price variance.

(3) It is improper to base a conclusion or opinion of value, or a conclusion with respect to neighborhood trends, upon stereotyped or biased presumptions relating to race, color, religion, sex or national origin or upon unsupported presumptions relating to the effective age or remaining life of the property being appraised or the life expectancy of the neighborhood in which it is located.

 

AIREA is to implement these stated general policies through specific changes in its textbook, The Appraisal of Real Estate, through review and, if necessary, prompt revision of its other instructional materials, courses, and seminars to ensure that they reflect the policy statements. Further, AIREA is to prepare, for use in its courses, an educational memorandum [**5] which explains civil rights legislation pertinent to the real estate appraisal profession. It is to develop special seminars for its members and the general public concerning appraisal of real estate and explaining the general policies and educational memorandum. AIREA agrees to add new explanatory comments to Canon 4 of Regulation 10 of its Code of Professional Ethics and Standards of Professional Conduct. The comment is to clarify its position with respect to appraisal practices and its commitment to the stated general policies. In addition, it will add to the explanatory comments to Canon 5 a new reporting rule which provides, in part:

All written appraisal reports relating to residential real estate which state that a neighborhood is undergoing decline or is about to undergo decline must contain the specific facts or reasoning upon which the . . . conclusion . . . is based.

 

A similar provision is made requiring that the specific facts or reasoning upon which similar oral appraisal reports are based must be contained in the appraiser's files. AIREA will issue a new interpretation of Canon 6 which states that it is not improper for an appraiser to permit a government [**6] agency investigating alleged unlawful activity to have access to appraisal reports. The decision to permit or deny such access is reserved to the appraiser. AIREA agrees to maintain a procedure for review of the appraisal reports relating to residential real estate in order to ensure that members and candidates understand the general policies. It will also expand its recruitment and scholarship outreach program which is aimed at acquainting women and minority group members with opportunities in the real estate appraisal profession.

The implementation section of the settlement agreement provides a termination date at which time the parties will petition the court for dismissal of AIREA from the litigation. AIREA is to advise the OFHEO/OVC and the United States of each material step taken to implement the agreement. However, it is provided that no part of the agreement

 

shall be interpreted to limit AIREA's right to implement its plans or publish or distribute any materials which it has developed [pursuant to the affirmative action plan] without prior approval of Justice.

 

The United States will, however, be placed on AIREA's mailing list and, subject to the confidentiality [**7] order, will have access to AIREA's files which relate to the settlement obligation. AIREA may, at its sole option and discretion, obtain review and comments of the United States regarding any material it plans to distribute pursuant to the agreement.

The parties shall remain subject to the continuing jurisdiction of the court during the term of the agreement. The agreement is enforceable by court order, should the [*1078] parties disagree as to its interpretation following negotiations attempting to resolve the dispute. The settlement order specifically provides that it and the agreement

 

[do] not in any way affect any of the defendants to this action other than AIREA and shall not be deemed to limit or prejudice the rights of the United States or any of said other defendants to apply for any relief they deem appropriate whether or not such relief is different than or in addition to the remedies provided for herein.

 

Similarly, the agreement provides:

Except as expressly provided for herein and in the Settlement Order, this Settlement Agreement does not constitute a determination of the rights of any party to this litigation.

 

F. Gregory Opelka, [**8] an AIREA member, filed suit in the Circuit Court of Cook County, Illinois, against AIREA challenging its power to enter into the settlement agreement. On March 29, 1977, the circuit court issued an order restraining AIREA from executing the documents intended by the United States and AIREA to resolve the controversy between them. On March 31, 1977, this court entered a temporary order restraining Opelka from attacking the settlement agreement in any state or other federal court. The temporary restraining order was converted into a preliminary injunction on April 8, 1977. Shortly thereafter, Opelka moved for leave to intervene as a party defendant in this action.

Opelka's motion alleges that his interest as a member of AIREA is inadequately represented in this action because he and other AIREA members have not been given an opportunity to exercise their right to review and vote on the proposed settlement agreement. The complaint he seeks to file addresses itself solely to the propriety of the settlement. It alleges that the agreement has the effect of binding all AIREA members to its provisions in the practice of their profession and would violate their first amendment rights; [**9] that the governing council exceeded its authority under AIREA by-laws by entering into the agreement; that the agreement constitutes an amendment of the existing code of professional ethics; and that it constitutes a violation of the by-laws in that the agreement amounts to an amendment of the by-laws without proper notice to members. Therefore, Opelka seeks an order compelling AIREA to submit the settlement agreement to its members for their review and restraining AIREA from entering into it, prior to membership approval.

The United States and AIREA assert that Opelka cannot intervene as of right, but have no objection to his intervention, on a permissive basis, for the purpose of contesting the settlement agreement. 2 Opelka and the Society of Real Estate Appraisers (hereinafter "SREA" or "Society") oppose entry of the settlement order and agreement.

2 Both the United States and AIREA devote some attention in their briefs to opposing Opelka's intervention as a full party defendant. However, because Opelka's motion and proposed pleading indicate that he wishes to intervene only for the purpose of opposing the settlement agreement, the court finds intervention as a full party defendant is not proposed nor at issue here. See Rule 24(c), F.R.Civ.P.

[**10] II.

SREA's first, and fundamental, objection is that the court lacks jurisdiction to enter the settlement order because the Fair Housing Act does not apply to appraisers. While the court rejected that contention when it denied SREA's motion to dismiss, the court takes this opportunity to hold that the Fair Housing Act does apply to appraisers of real estate and that this court has jurisdiction over this action under 42 U.S.C. § 3613 and 28 U.S.C. § 1345. And having jurisdiction, it can grant declaratory judgment relief pursuant to 28 U.S.C. §§ 2201, 2202. SREA's principal argument is that because sections 804(a) and 817 of the Fair Housing Act, 42 U.S.C. §§ 3604(a), 3617, do not mention appraisers or the appraisal process, the Act does not reach the activities of appraisers. In pertinent part, these provisions declare:

 

[*1079] § 3604. Discrimination in sale or rental of housing

[It] shall be unlawful --

(a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, or national origin.

§ [**11] 3617. Interference, coercion, or intimidation; enforcement by civil action

. Interference, coercion, or intimidation; enforcement by civil action

It shall be unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed, or on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by section 3603, 3604, 3605, or 3606 of this title. This section may be enforced by appropriate civil action. (Emphasis added.)

 

It is clear from the plain language of the provisions that appraisers are not exempted from their coverage; both sections are unrestricted with respect to the class of persons subject to their prohibition. The "otherwise make unavailable or deny" language of section 804(a) has been applied to a variety of conduct to prohibit all practices which have the effect of denying dwellings on prohibited grounds. For example, section 804(a) applies to racially exclusionary land use practices by a municipality. United States v. City of Black Jack, Missouri, 508 F.2d 1179 (8th Cir. 1974), cert. denied, 422 U.S. 1042, 45 L. Ed. 2d 694, 95 S. Ct. 2656 (1975). It applies to "redlining" [**12] by financial institutions. Laufman v. Oakley Bldg. & Loan Co., 408 F. Supp. 489, 493 (S.D. Ohio 1976). It applies to delaying tactics and discouragement of rental applications used by resident managers and rental agents, and top management and owners who fail to set objective and reviewable procedures for rental applications. United States v. Youritan Construction Co., 370 F. Supp. 643, 648 (N.D.Cal. 1973), aff'd as modified, 509 F.2d 623 (9th Cir. 1975). Finally, it applies to racial "steering". Zuch v. Hussey, 366 F. Supp. 553, 556-57 (E.D. Mich. 1973).

The "or interferes with" language of section 817 has been similarly broadly applied to reach all practices which have the effect of interfering with the exercise of rights under the Act. See, e.g., Smith v. Stechel, 510 F.2d 1162 (9th Cir. 1975); United States v. City of Black Jack, Missouri, supra; Laufman v. Oakley Bldg. & Loan Co., supra at 497-98. The Act requires a liberal construction if the statute is to prohibit effectively "all forms of discrimination, sophisticated as well as simple-minded. . . ." Williams v. Matthews Co., 499 F.2d 819, 826 (8th Cir.), cert. denied, 419 U.S. 1027, 42 [**13] L. Ed. 2d 302, 95 S. Ct. 507 (1974). Given a broad interpretation of these provisions, it becomes clear that the United States has stated a claim for relief under their terms. The promulgation of standards which cause appraisers and lenders to treat race and national origin as a negative factor in determining the value of dwellings and in evaluating the soundness of home loans may effectively "make unavailable or deny" a "dwelling" and may "interfere" with persons in the exercise and enjoyment of rights guaranteed by the Act. When such denial or interference occurs as a result of considerations relating to race or national origin, sections 804(a) and 817 are transgressed. 3

3 The court further notes that it has jurisdiction to enter the settlement order and agreement under the teaching of Bell v. Hood, 327 U.S. 678, 681-82, 90 L. Ed. 939, 66 S. Ct. 773 (1946). As was stated in Grabinger v. Conlisk, 320 F. Supp. 1213, 1217 (N.D. Ill. 1970), aff'd, 455 F.2d 490 (7th Cir. 1972):

 

When a claim is alleged to arise under the Constitution or laws of the United States, the federal district court must entertain the suit except when the alleged claim appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where it is wholly insubstantial and frivolous.

 

[**14] III.

Absent a statutory right of intervention, Rule 24(a)(2) of the Federal Rules of Civil Procedure requires the applicant to establish three elements as a prerequisite to intervention as of right: (1) an interest in the subject matter of the lawsuit; (2) the potential [*1080] for impairment of that interest; and (3) the inadequate representation of that interest by existing parties. See 3B Moore's Federal Practice, para. 24.09-1[1] (2d ed. 1977); 7A C. Wright & A. Miller, Federal Practice & Procedure, Civil §§ 1902, 1908 (1972); Comment, Intervention in Government Enforcement Actions, 89 Harv. L. Rev. 1174 (1976). Opelka argues that he has an interest in the entry of the settlement agreement and order which may be impaired by this court's disposition of the matter in that his right to commercial free speech and the economic conditions of his practice may thereby be affected. The gist of his argument is that the settlement agreement and order, if approved by this court, will bar him from utilizing racial and ethnic factors in making appraisals of residential real estate and thereby force him to ignore socioeconomic realities. He also argues that because the agreement [**15] binds all individual AIREA members, those who are jointly designated members of both AIREA and SREA will be placed in the untenable position of either adhering to SREA practices or complying with the settlement order. These arguments misapprehend the "interest" and "practical impairment" requirements of Rule 24(a)(2) as well as the substance and reach of the proposed settlement before the court.

The "interest" requirement of Rule 24(a)(2) has been recognized as "primarily a practical guide to disposing of lawsuits by involving as many apparently concerned persons as is compatible with efficiency and due process." Nuesse v. Camp, 128 U.S. App. D.C. 172, 385 F.2d 694, 700 (1967). The requirement is satisfied by something less than a specific legal or equitable interest in the chose. See, e.g., Cascade Natural Gas Corp. v. El Paso Natural Gas Co., 386 U.S. 129, 132-36, 17 L. Ed. 2d 814, 87 S. Ct. 932 (1967); Johnson v. San Francisco Unified School Dist., 500 F.2d 349, 352-53 (9th Cir. 1974); Smuck v. Hobson, 132 U.S.App.D.C. 372, 408 F.2d 175 (1969); Nuesse v. Camp, supra. As one court has observed:

 

 

 

If barriers are needed to limit extension of the right [**16] to intervene, the criteria of practical harm to the applicant and the adequacy of representation by others are better suited to the task. Smuck v. Hobson, supra, 408 F.2d at 180.

 

In this case, however, the asserted interest and its impairment are intimately bound together. For Opelka's interest is no different from that of all members of AIREA or all jointly designated members of AIREA and SREA, a fact which is emphasized by the addition of 71 such individuals as proposed intervenors by amendment to the complaint for intervention. The interest asserted is one that involves not being bound by the terms of the proposed settlement agreement and order. However, the terms of the agreement and order make clear that no individual member of AIREA is bound as such. The agreement and order direct AIREA to take certain actions. But since these actions are to be taken by the organization as such, there is no apparent way in which Opelka, or any member of AIREA or SREA, could violate the agreement and order and thereby become subject to enforcement proceedings.

In Smuck v. Hobson, supra, the court rejected efforts by a former superintendent of schools and a member of the [**17] Board of Education of the District of Columbia to intervene as of right or to appeal a district court order which had found that the Board had, in a variety of ways, acted unconstitutionally in administering the school system. The court concluded that the ex-superintendent did not have an interest sufficient to allow intervention because:

 

The original decision was not a personal attack upon [him], nor did it bind him personally once he left office. Smuck v. Hobson, supra, 408 F.2d at 177.

 

The board member was found to have no appealable interest because the Board had been sued as a collective entity and the order was enforceable against the Board alone as such. Id. at 178. So too, here, Opelka has no separate interest as an individual in the [*1081] litigation which could be affected by the settlement order since the order cannot be enforced against him nor can he violate it. See also Rios v. Enterprise Ass'n Steamfitters Local U. 638, 520 F.2d 352 (2d Cir. 1975).

However, even assuming that Opelka satisfies the "interest" and "impairment" requirements, his application for intervention is legally insufficient because he does not show that his [**18] interest is one which may be inadequately represented by an existing party. The burden of establishing inadequacy of representation rests on the applicant. Trbovich v. United Mine Workers of America, 404 U.S. 528, 538 n.10, 30 L. Ed. 2d 686, 92 S. Ct. 630 (1972). And although that burden is minimal, it must nonetheless be met. Commonwealth of Virginia v. Westinghouse Electric Corp., 542 F.2d 214, 216 (4th Cir. 1976).

Opelka alleges that the governing council of AIREA is adverse to himself and to the Institute. He claims this inadequacy of representation is shown by the alleged "nonfeasance" of the governing council in failing to apprise him and other AIREA members of the litigation's development and to provide them with an opportunity to review or to vote on the proposed settlement agreement. 4 The United States argues that Opelka's interests, and that of all voluntary members of the Institute, are adequately represented by AIREA.

4 Opelka also alleges that the governing council lacked power to enter into the settlement agreement and hence its acts are ultra vires. There is no merit in this contention. See Ill. Rev. Stat. ch. 32, § 163a4(b), (p). The Institute's by-laws vest control of its affairs in the governing council, except that the membership elects the council and approves all amendments to the by-laws.

[**19] In United States v. Board of School Commissioners of Indianapolis, 466 F.2d 573 (7th Cir. 1972), the court of appeals affirmed a district court's denial of a petition to intervene in a school desegregation case by a corporation, Citizens of Indianapolis for Quality Schools ("CIQS"). CIQS sought to challenge the entry of a consent decree and stipulations between the government and the school board. The court conceded that requirements of interest and impairment had been met, but found the proposed intervenors had not demonstrated that their interest was inadequately represented by the school board. The court established a standard for determining the adequacy of representation:

 

 

 

[Representation] is adequate if no collusion is shown between the representative and an opposing party, if the representative does not have or represent an interest adverse to the proposed intervenor and if the representative does not fail in the fulfillment of his duty. Id. at 575.

 

The proposed intervenors' claims that the school board, by entering into the consent decree and stipulation, had "failed to assert [the proposed intervenors'] interests as vigorously and effectively [**20] as they would have had they been parties to the litigation" were insufficient to establish inadequacy of representation. Id. Opelka's claims are likewise insufficient.

Opelka does not allege directly that there is any collusion between the United States and AIREA; and it is clear that there is none. As United States v. Board of School Commissioners of Indianapolis, supra, demonstrates, entry into a proposed settlement does not constitute such collusion per se. Here, AIREA initially responded to the complaint by filing an answer which, in addition to denying the substantive allegations of the complaint, raised statutory and constitutional defenses. The proposed settlement agreement and order is the product of negotiations between AIREA and the United States Department of Housing and Urban Development, scheduled prior to this litigation and continued thereafter, with the Department of Justice joining the negotiations. The court cannot conclude that the decision to enter into the settlement order rather than engage in what promises to be, in light of proceedings thus far, extensive, costly and complex litigation, evidences in any way collusion on the part of AIREA and [**21] the United States.

[*1082] Equally clearly, AIREA does not have or represent an interest adverse to petitioner. The purpose of a professional organization is to further the interests of its members. Where a party litigant is charged with representing the proposed intervenor's interests, a compelling showing is required to demonstrate that this representation is inadequate. United States v. International Business Machines Corp., 62 F.R.D. 530, 536 (S.D.N.Y. 1974), citing 7A C. Wright & A. Miller, Federal Practice & Procedure Civil § 1909 (1972); Shapiro, Some Thoughts on Intervention Before Courts, Agencies, and Arbitrators, 81 Harv.L.Rev. 721, 748 (1964). In Stadin v. Union Electric Co., 309 F.2d 912 (8th Cir. 1962), cert. denied, 373 U.S. 915, 10 L. Ed. 2d 415, 83 S. Ct. 1298 (1963), a shareholder sought to intervene as a party plaintiff in two civil antitrust actions brought by his corporation. Following the refusal by the board of directors and shareholders to bring certain suits, the shareholder sought to intervene, alleging that the directors' refusal to bring suit and purchase of certain equipment on behalf of the corporation "at rigged prices" was [**22] not in good faith and was a breach of trust; and that the corporation's attorney and director inadequately represented the shareholder's interest because he was not on friendly terms with the shareholder and had voted against the shareholder's proposals. Noting that the allegations of the proposed intervenor were to be taken as true, the court nonetheless added the caveat that this

 

does not mean . . . all statements in pleadings of this kind are to be accepted as true irrespective of their nature or content. . . . [Only] matters well pleaded . . . are entitled to the preferential status of assumed truth. Conclusory statements are not. Id. at 917.

 

The court then examined the shareholder's allegations, finding:

[They] speak of management's voting against the Stadin resolution and they charge that this bespeaks condonation and bad faith. These latter characterizations are only the pleader's conclusions. . . . We cannot escape the conclusion that Stadin's complaint as to inadequacy of representation lies largely in the area of asserted disagreement between lawyers as to how litigation should be conducted. Mere difference of opinion among attorneys [**23] is not of itself inadequate representation within the meaning of the Rule. If it were, intervention as of right would become almost automatic. Id. at 919.

 

Piercing the allegations of Opelka's complaint, the court finds the asserted inadequacy of representation is only the pleader's conclusion based on a difference of opinion as to how this litigation should be conducted. Opelka points to the Institute's failure to keep members apprised of the litigation's progress and concludes that its failure to present the proposed settlement agreement to AIREA membership for approval demonstrates inadequacy of representation. But the governing council had no such obligation. The by-laws of the Institute vest control of its affairs in the governing council. Relevant state law confers on the Institute the power "[to] sue and be sued, complain and defend, in its corporate name." Ill. Rev. Stat. ch. 32, § 163a4(b). The failure to submit the proposed settlement order to the membership for approval does not evidence inadequacy of representation, in light of the by-laws and state statute. Opelka makes no allegation of bad faith, but only of bad judgment, in that he believes the governing [**24] council has not asserted the membership's interests as vigorously and effectively as he would have. That he would have utilized different litigation tactics does not mean that the governing council does not adequately represent his interests in this litigation as a member of AIREA.

AIREA's entry into the settlement agreement does not amount to a failure to fulfill its duty to represent its members, for much the same reasons as discussed above. In Alleghany Corp. v. Kirby, 344 F.2d 571 (2d Cir. 1965), writ of cert. vacated as improvidently granted, 384 U.S. 28, 86 S. Ct. 1250, 16 L. Ed. 2d 335 [*1083] (1966), shareholders sought to intervene in a derivative action following a decision by the board of directors not to petition for a writ of certiorari. The court declined to determine the issue of adequacy of representation on the basis of the soundness or improvidence of the board's decision to terminate the litigation. The court stated:

 

Adequacy of representation . . . depends not on our assessment of whether the Board should have authorized a certiorari petition, but rather on whether shareholder interests were fully and fairly considered when the Board reached [**25] its decision. Stated somewhat differently, the mere fact that a particular decision is adverse to certain interests does not necessarily mean those interests were not adequately represented in the decision-making process or in the decision itself. Id. at 574.

 

In this case, AIREA's entry into the proposed settlement agreement does not mean that it failed in its duty to represent membership interests. And, absent allegations of collusion or bad faith, the court will not delve into the decision-making process of the governing council nor into the soundness of its decision to terminate this litigation rather than pursue it to judgment on the merits. The fact that Opelka's opinions did not prevail in the governing council does not mean that those opinions were not fully and fairly considered. Accordingly, the court concludes that he is not entitled to intervene as of right to challenge the settlement agreement.

IV.

The court thus turns to a determination of whether Opelka should be permitted to intervene on a permissive basis. The court notes that the numerous objections to the settlement agreement and order raised by Opelka are also raised by the Society. Where the proposed [**26] intervenor merely underlines issues of law already raised by the primary parties, permissive intervention is rarely appropriate.

 

Additional parties always take additional time. Even if they have no witnesses of their own, they are the source of additional questions, objections, briefs, arguments, motions and the like which tend to make the proceeding a Donnybrook Fair. Crosby Steam Gage & Valve Co. v. Manning, Maxwell & Moore, Inc., 51 F. Supp. 972, 973 (D.Mass. 1943).

 

Therefore, the court declines to allow full-scale intervention which will inevitably bring about delay, repetition and the clouding of issues involved in the original cause of action. See Stadin v. Union Electric Co., supra at 920.

However, it is appropriate to allow Opelka to intervene to address the merits of the settlement agreement. The district court's discretion under Rule 24(b), F.R.Civ.P., includes the latitude to limit intervention to particular issues. Van Hoomissen v. Xerox Corp., 497 F.2d 180, 181 (9th Cir. 1974); Ionian Shipping Co. v. British Law Ins. Co., 426 F.2d 186, 191-92 (2d Cir. 1970). Opelka has indicated that, if granted leave to intervene, he will adopt the [**27] arguments made and authorities cited in his memorandum of law in support of his application for leave to intervene and in opposition to the proposed settlement order. The primary parties to this litigation have no objection to Opelka's permissive intervention so long as it is limited to challenges to the settlement he makes in his memorandum. Accordingly, the court grants Opelka leave to intervene on a permissive basis, limiting that intervention to the arguments raised by him that the settlement agreement and order infringe his first amendment rights.

V.

In many respects, a consent decree is a contract between the parties thereto. United States v. ITT Continental Baking Co., 420 U.S. 223, 236-37 n.10, 43 L. Ed. 2d 148, 95 S. Ct. 926 (1975). Although it must have judicial approval, a court reviewing such a decree does not inquire into the precise legal rights of the parties. See Florida Trailer & Equipment Co. v. Deal, [*1084] 284 F.2d 567, 571 (5th Cir. 1960). However, the court must be certain that "there has been valid consent by the concerned parties and that the terms of the decree are not unlawful, unreasonable, or inequitable." United States v. City of Jackson, [**28] Mississippi, 519 F.2d 1147, 1151 (5th Cir. 1975).

It has been recognized that consent decrees are "highly useful tools." Id. at 1151. While waiving their right to litigate the issues involved in the suit, parties "save themselves the time, expense, and inevitable risk of litigation." United States v. Armour & Co., 402 U.S. 673, 681, 29 L. Ed. 2d 256, 91 S. Ct. 1752 (1971). Most important, however, "the agreement reached . . . embodies a compromise; in exchange for the saving of cost and elimination of risk, the parties each give up something they might have won had they proceeded with the litigation." Id. "[The] inherent nature of a compromise is to give up certain rights or benefits in return for others." MacDonald v. Chicago Milwaukee Corp., 565 F.2d 416, 429 (7th Cir. 1977). Hence, a consent decree is not a precise delineation of legal rights.

With these principles in mind, the court turns to decide whether the proposed settlement agreement and order in this case are valid. First, the court finds that AIREA consented to the agreement and order. The agreement and order are the result of extensive negotiations not only between AIREA and the United States, but [**29] between AIREA and OFHEO/OVC. AIREA and HUD had agreed, prior to institution of this litigation, that possibilities of developing an affirmative action program for AIREA would be explored. After this suit was filed, the United States initially sought to terminate the discussions, but later consented to their continuance, provided government representatives could be present. As negotiations proceeded, the United States and AIREA found that settlement could be reached. AIREA agreed to adopt the statement of general policies which it had determined reflects sound appraisal practices; the United States determined to its own satisfaction that the policies satisfy the requirements of the Fair Housing Act. The court thus finds that there had been a valid consent by the concerned parties. Second, the court finds that, as to AIREA, the terms of the decree are not unlawful, unreasonable, nor inequitable. While it is true that the parties may have surrendered certain rights and benefits they might have vindicated or obtained through litigation, the surrender was in return for other rights and benefits.

The Society of Real Estate Appraisers raises several objections which, it argues, bar [**30] the court's approval of the settlement agreement and order. First, SREA argues that judicial approval of the settlement agreement and order places a judicial imprimatur on a specific theory of real estate appraisal, thereby stifling the exchange of ideas within the profession and condemning alternative theories. This argument overstates the effect of the settlement agreement and order. A consent decree is not a litigated judgment on the merits. The court's approval of the settlement agreement and order is not the judicial adoption of the real estate appraisal policies adopted by the parties therein. Rather, it is an approval of a compromise between the parties as validly consented to and not unlawful.

Second, SREA argues that the court's approval of the settlement agreement and order will irreparably prejudice SREA's defense to this action. In United States v. City of Jackson, Mississippi, supra, the United States and black municipal employees brought separate suits to remedy alleged racial discrimination in employment. The district court rendered judgment in the government's suit on a consent decree providing for injunctive relief and back pay to incumbent and former employees. [**31] In rejecting the employees' motion to intervene and to block the decree on the ground that its stare decisis effect would impair their efforts to obtain relief, the court stated:

 

This argument gives insufficient consideration . . . both to the significant differences between a consent decree and [*1085] a litigated judgment on the merits and to the good sense of the federal trial bench. . . . We cannot assume that courts will not recognize the special characteristics and purposes of consent decrees. To the contrary, we believe that courts fully understand that such decrees do not purport to be definitive statements of the parties' legal rights and will accord them little or no weight in the determination of the rights of persons not party to them. Id. at 1151-52.

 

Cf. Air Lines Stewards & Stewardesses Ass'n, Local 550 v. American Airlines, Inc., 455 F.2d 101, 106 (7th Cir. 1972). So too, here, the settlement agreement and order between the United States and AIREA should have no effect on the determination of SREA's rights.

. So too, here, the settlement agreement and order between the United States and AIREA should have no effect on the determination of SREA's rights.

Third, SREA argues that entry of the order will adversely affect SREA professionally. The Society argues that it will suffer [**32] lost business and diminished enrollment because potential clients and students will fear that by working with SREA they will be violating federal law. SREA also argues that appraisers who are joint members of AIREA and SREA will be placed in an untenable position and may resign from SREA to avoid violating federal law. Again, this argument overestimates the consequences of a consent decree. Moreover, it is speculative.

Opelka joins in SREA's objections, which this court rejects, and raises several of his own. He argues that, by the terms of the agreement and order, he may neither consider or communicate ideas pertaining to racial and ethnic factors which he believes to be relevant to the appraisal profession. Thus, he argues, the order impermissibly infringes on his first amendment rights. See Linmark Associates, Inc. v. Township of Willingboro, 431 U.S. 85, 97 S. Ct. 1614, 52 L. Ed. 2d 155 (1977). The short answer to this argument, as discussed in Part III, supra, is that the order does not bind him because he is not a party. It cannot be enforced against him nor can he violate it. Under these circumstances, it does not violate his first amendment rights.

The fact [**33] that Opelka, as a member of AIREA, is bound by its by-laws does not change this court's view for these reasons. First, there is nothing in the record to indicate the by-laws of the Institute have been altered by the settlement agreement and order. Second, without the force of governmental sanctions behind the by-laws, it is unclear that any first amendment problem is necessarily raised by the Institute's requirement that he comply with its by-laws or professional canons as a condition of continued membership. See Cannon v. University of Chicago, 559 F.2d 1063, 1068-71 (7th Cir. 1977); Driscoll v. International Union of Operating Engineers, Local 139, 484 F.2d 682, 690 (7th Cir. 1973), cert. denied, 415 U.S. 960, 39 L. Ed. 2d 575, 94 S. Ct. 1490 (1974); compare Jackson v. Metropolitan Edison Co., 419 U.S. 345, 42 L. Ed. 2d 477, 95 S. Ct. 449 (1974). Third, and most importantly, whether in the future Opelka may be adversely affected, and his legal rights infringed, by some AIREA action, either pursuant to the settlement agreement and order or otherwise, is a question that is not ripe for decision. We cannot adjudicate that issue on the basis of predictions about the [**34] possible conduct of either Opelka or AIREA; their behavior turns on contingencies and requires guesses about the future. In substance, Opelka requests this court "to provide [him] with guidance for the future rather than to resolve a pending or threatened controversy between adverse parties. [The court has] no power to render such advice . . . ." Hanover Township Federation of Teachers, Local 1954 v. Hanover Community School Corp., 457 F.2d 456, 463 (7th Cir. 1972). Therefore, whether, at some future date, AIREA might act in some way as to infringe Opelka's legal rights is a question this court cannot reach. For the reasons stated, the court hereby approves the settlement order, the agreement, and the confidentiality order between the United States and AIREA and orders their immediate entry.

George N. Leighton, United States District Judge

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Track performance of U.S. and global real estate markets

Track performance of U.S. and global real estate markets
Updated daily, the FTSE NAREIT U.S. Real Estate Index Returns and the FTSE EPRA/NAREIT Global Real Estate Index Returns provide index performance data, industry segment returns and comparisons against other major market benchmarks.
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Police Power Gives Cities Wide Discretion in Enforcing Billboard Bans

Abbott & Kindermann Land Use Law Blog

Police Power Gives Cities Wide Discretion in Enforcing Billboard Bans

By Katherine J. Hart

The City of Los Angeles generally prohibits freeway, supergraphic and off-site billboards, but has adopted a few exceptions to the rule. For instance, it permits freeway signs and supergraphic and off-site signs in areas where specific plans are adopted to govern such signs or pursuant to development agreements, in accordance with its police power (the power to control local land use). Numerous billboard companies erected freeway and supergraphic signs all over the city. In 2008, the city adopted a moratorium on new supergraphic and off-site signs.

In World Wide Rush, LLC, et al. v. City of Los Angeles (2010) 606 F.3d 676; the plaintiffs sued the city to enjoin enforcement of the freeway facing sign ban and the supergraphic and off-site sign bans. They argued that the freeway facing ban was unconstitutional because it restricted commercial speech since the city had permitted some freeway facing signs despite the ban (e.g., next to Staples Center). They argued the supergraphic and off-site sign bans were unconstitutional on their face because the exceptions to the bans gave the city council direction to favor certain speech, depending upon the content of the proposed signage.

Freeway Billboard Ban

The Ninth Circuit first addressed the freeway facing sign ban. The Court held that the city’s exception to permit freeway facing billboards at the Staples Center and in the Fifteenth Street special use district did not undermine the city’s interests in aesthetics and safety. Instead it reasoned the city’s exception was reasonable in light of the benefits of redevelopment of blighted areas in downtown Los Angeles, and a reduction of overall billboards in the special use district.

Because this case revolves around restrictions on commercial speech, the Central Hudson Gas & Electric Corporation v. Public Service Utilities Commission (1980) 447 U.S. 557 case applies. There, the Supreme Court applied a four-part test to determine the constitutionality of a restriction on commercial speech. In applying the test, the Ninth Circuit court framed the question as follows: do the ban exemptions granted by the city defeat the city’s argument that it has a substantial interest in regulating billboards for the safety of its citizens and the beauty of the city? Holding the ban exemptions did not undermine the city’s substantial interests in safety and aesthetics, the Court reasoned that allowing the freeway signs near the Staples Center was a key part of eliminating blight in the area, and that permitting the sign district on Fifteenth Street in Santa Monica actually resulted in the elimination of multiple existing billboards in the area.

Supergraphic and Off-Site Sign Ban

In addressing the second issue – whether the city could employ various exceptions in the ordinance to the ban of supergraphic and off-site billboards - the Ninth Circuit held that the city was well within its discretion to grant exemptions to its ordinance as the prior restraint doctrine did not apply. The Court reasoned that since the city council’s power to authorize the exceptions to the sign bans arises out of the police power as opposed to the bans themselves, the city council had the authority to exercise discretion.

Katherine J. Hart is a senior associate at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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August 30, 2010

Protect Land Use Permits to Guard Value

Protect Land Use Permits to Guard Value 

SAN FRANCISCO-Distressed real estate is about the only real estate game in town these days. And there’s lots of it. One of the keys to knowing whether to take it back or invest in it is assessing its value. And according to Howard Ellman, an attorney in the San Francisco office of Buchalter Nemer, when the real estate is a broken development project, the project’s value depends entirely on how it can be used. How it can be used, in turn, depends on what government agencies have permitted. And according to Ellman, those permits are not simple, static or free.

GlobeSt.com: What is the status of the entitlements? Are some at risk of expiring? What will it take to get an extension? Is one possible, legally and politically?

http://www.globest.com/news/1736_1736/sanfrancisco/302089-1.html?ET=globest:e23274:371504a:&st=email

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August 26, 2010

STUDIES AND ARTICLES

http://www.fmv.com/index.php?C=Articles&RequestArticles=1&article_id=DDZJUU8LD9
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Article & Studies

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Fifth Circuit advises Tax Court on conservation easement valuation

Fifth Circuit advises Tax Court on conservation easement valuation

Real estate easement cases before the tax court can offer some interesting guidance to BV professionals. Whitehouse Hotel Limited Partnership et al. v. Commissioner (August 12, 2010) is a good example. Lance Hall (FMV Opinions) has prepared a summary of the valuation issues from this case. Hall says “on appeal, the issues before the Fifth Circuit were:

  • whether the Maison Blanche property should be valued alone or combined with the Kress building (and related properties)
  • the highest and best use of the property, (c) the valuation approaches that should be utilized
  • whether the IRS’s expert was qualified
  • whether a deviation from Uniform Standards of Professional Appraisal Practice (USPAP) would render the IRS’s expert’s valuation report unreliable
  • whether the burden of proof should be shifted to the IRS, and
  • whether the Taxpayer had shown sufficient reasonable cause to rely on experts and, thus, avoid any gross undervaluation penalty.”
From BVWire, 25 August 2010, Issue 95-4
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August 25, 2010

Construction, Contracts, Remedies

Construction, Contracts, Remedies
Ted Jacob Eng'g Group, Inc. v. Ratcliff Architects
In a subcontractor's suit against defendant-architects for breach of contract and other causes of action in connection with a city hospital renovation and expansion project, judgment of the trial court is affirmed where: 1) in the absence of a negotiated agreement upon price, and assuming no contrary contractual provision applies, a subcontractor may still pursue a claim seeking a judicial determination of additional fees when it performs work demanded of it by the general contractor constituting a material change in the scope of work defined under the contract; and 2) if good faith negotiation between the parties fails to result in agreement on price, the subcontractor is not required to elect between the job and forfeiting its right of recovery if it elects to perform the required work. Read more...
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August 25, 2010

HousingOnline Weekly Newsletter

See something you like? Let us know what you think! Contact Thom Amdur with questions, comments or suggestions.

NH&RA Members OnlyTax Credit Advisor Content Tax Credit Advisor Content

Top Story

FHA Issues Final Rule on Escrowing Tax Credit Equity

HUD's Federal Housing Administration has issued final regulations for its multifamily mortgage insurance program that prohibits a requirement that tax credit sales proceeds be placed into escrow at the time of initial endorsement for assurance of project completion, and to pay the initial service charge, carrying charges, and legal & organizational expenses incident to the construction of the project. The rule extends the same treatment to the historic and New Markets Tax Credits, and does not prohibit HUD from requiring escrows of funds for other purposes, such as working capital.

Summer Institute

NH&RA Events

Fall Forum Registration Now Open!

NH&RA is pleased to announce that online registration for the 2010 Fall Developers Forum is now open. Attendees may also register to attend the J. Timothy Anderson Awards for Excellence in Historic Rehabilitation Luncheon (October 19) and the Affordable Housing Vision Awards Reception (October 18).

Who?

Developers, Owners, Managers, Investors, Syndicators, Lenders, State & Local Governments, Attorneys, Accountants, Consultants

What?

2010 NH&RA Fall Developers Forum

Where?

100 Federal Street Auditorium (Bank of America Bldg.), Boston, MA

When?

October 18-19, 2010

Why?

Innovative Case-Studies, Transaction-Oriented Information, New Opportunities, Outstanding Networking

How?

Click HERE to Register Online Today!

Questions?

Contact Thom Amdur, (202) 939-1753

Additional information about the Fall Developers Forum is available through our website. Interested in participating as a speaker? Contact Thom Amdur via at (202) 939-1753.

NMTC

NCAHMA Early Registration Ends Friday

Early registration for the National Council of Affordable Housing Market Analysts' 2010 Affordable Housing Underwriting Conference & Annual Meeting expires this Friday, August 27. Don't delay - register now and save!

Tax Credit Advisor

NMTC

NCSHA Reviewing Recommended Practices for LIHTC Underwriting, Allocation

Tax Credit Advisor Content Tax Credit Advisor Preview

August 2010 – The National Council of State Housing Agencies is moving forward with a review, for possible changes, of its existing recommended practices for state housing credit agencies for low-income housing tax credit underwriting and allocations. Initiated earlier this year, the review is being carried out by NCSHA’s Housing Credit Task Force, which discussed the project again at the organization’s June housing credit conference in Chicago. NCSHA’s recommended practices, last revised in late 2003, are voluntary standards that state HFAs are urged to incorporate in their standards and procedures for underwriting proposed projects seeking housing credits, and in deciding how much credit to award. These so-called “best practices” include recommendations in 17 areas...

Learn more about Tax Credit Advisor.

NMTC

Preventive Medicine: Preparing a Tax Credit Property for the State Agency’s Physical Inspection

Tax Credit Advisor Content Tax Credit Advisor Preview

August 2010 – Federal low-income housing tax credit properties must ensure compliance in three major areas – affordability, eligibility, and habitability – to prevent the loss of tax credits. Rents must be properly restricted, residents must be eligible, and buildings and units must be suitable for occupancy. State housing credit agencies must inspect each LIHTC property at least once every three years. During this inspection, the HCA must review at least 20% of the tenant files, physically inspect the same 20% of units, and inspect all common and public use areas. The agency must report incidents of noncompliance to the Internal Revenue Service, which may lead to a loss of tax credits for the property. In a comprehensive way, LIHTC compliance expert A. J. Johnson provide advice to LIHTC property owners and managers on the steps that they should take to prepare for the state agency’s inspection visit, to minimize their chances of being reported for noncompliance...

Learn more about Tax Credit Advisor.

HUD News

NMTC

HUD Issues LIHTC Mortgagee Letter & Notice

The U.S. Department of Housing and Urban Development has issued a new mortgagee letter and Housing Notice to all FHA-approved multifamily mortgagees announcing further guidance to defer submission of final architectural plans and specifications, titled "Streamlined Processing of Multifamily Mortgage Insurance Applications Involving Low Income Housing Tax Credits (LIHTC)". The letter authorizes owners associated with a MAP application for one of the FHA mortgage insurance programs to defer the submission of final architectural drawings and specifications until 30 days before the date scheduled for initial endorsement of the loan.

NMTC

Urban Institute Publishes Paper on Housing Choice and Mobility

The Urban Institute, a non-partisan research think-tank, has published a new paper entitled "Why Housing Choice and Mobility Matter." The paper explores HUD's proposal for transforming federal rental assistance and summarizes research evidence concluding that:

  • Project-based housing programs limit families' choices about where to live;
  • Families benefit when they move with vouchers;
  • Assisted mobility programs further expand families' options; and
  • "Opportunity moves" can improve families' life chances.

Multifamily Finance

NMTC

FHFA Solicits Comments on Proposed Rule for Oversight of GSEs

The Federal Housing Finance Agency (FHFA) has issued a notice soliciting public comments regarding the implementation of a proposed rule in the Housing & Economic Recovery Act (HERA) that authorizes FHFA to initiate enforcement over Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks. The notice also provides background and synopsis of the proposed rule, a section-by-section analysis and an overview of regulatory impact. Comments on the proposed rule must be received on or before October 12, 2010.

New Markets Tax Credits
NMTC

Ohio Launches State New Markets Tax Credit Program

Governor Ted Strickland and Department of Development Director Lisa Patt-McDaniel recently announced the launch of the Ohio New Markets Tax Credit program. The program is modeled after the Federal New Markets Tax Credit program and provides a 39 percent tax credit over seven years for qualified investments in low-income community businesses. Only Community Development Entities (CDE) serving Ohio that have already received an allocation of Federal New Markets Tax Credits are eligible to apply. A total allocation of $10 million in tax credits is available in the first round of funding. Applications are due on September 20 and awards will be announced by October 31, 2010.

NMTC

CDFI Fund Seeks Comments on New Markets Allocation Application

The Community Development Financial Institutions Fund is seeking comments on the electronic application used to apply for an allocation of federal new markets tax credits. Comments are due by October 25.

Historic Rehabilitation

NMTC

New York State Budget Defers Rehabilitation Tax Credits

Earlier this month, the New York State Legislature passed the final bill needed to authorize the 2010 state budget. Among other things, the final budget defers New York State Rehabilitation Tax Credits earned between 2010 and 2012 exceeding $2 million. The tax credits will be deferred per the following schedule:

  • In 2013, 50% of the balance of credit value over $2 million will be available;
  • In 2014, 75% of the remaining balance of credit value will be available;
  • In 2015, 100% of the remaining balance of credit value will be available.

Summer Institute

Low Income Housing Tax Credits

NMTC

Connecticut Incorporates Very Low-Income Construction Employment Policy Into Draft 2011 QAP

The Connecticut Housing Finance Authority (CHFA) Board of Directors recently approved the Authority’s Very Low-Income Construction Employment Policy and incorporated the policy into the 2011 Low-Income Housing Tax Credit Draft Qualified Allocation Plan (QAP). Under the policy, CHFA requires that applicants for LIHTCs commit to undertaking good faith efforts to hire or train very low-income persons from the area of the housing constructed or rehabilitated with CHFA funding. The draft 2011 QAP is available through CHFA’s website. CHFA is soliciting public comments on the draft through September 8, 2010 and a public hearing will be held August 26, 2010 at 999 West Street, Rocky Hill, CT.

NMTC

Indiana Releases 2011 QAP

The Indiana Housing & Community Development Authority has released its 2011 qualified allocation plan. The 2011 QAP contains significant changes that promote IHCDA's four priorities:

  • Comprehensive Development
  • Aging-In-Place
  • Ending Homelessness
  • High Performance Building

Applications for funding through the 2011 round are due by November 1. A public forum will be held on September 16 in Indianapolis.

NMTC

Maryland Releases Draft 2011 Multifamily Rental Program Guide

The Maryland Department of Housing and Community Development (DHCD) has begun the process of revising the 2011 qualified allocation plan (QAP), and has released its draft 2011 Multifamily Rental Financing Program Guide. Proposed revisions to the 2011 QAP will be released by the end of August. DHCD is soliciting public comments on the 2011 Guide and QAP by September 13, and will hold a public hearing on September 8 at DHCD offices in Crownsville, MD. The draft 2011 Multifamily Rental Financing Program Guide incorporates changes to the threshold criteria, scoring schedule and program fees, including...

Continue reading at HousingOnline.com.

NMTC

Utah Releases 2011 Draft Qualified Allocation Plan

The Utah Housing Corporation has released its 2011 draft qualified allocation plan (QAP). Proposed changes to the 2011 QAP include:

  • Requires that rehabilitation projects with tenants in place must submit a relocation plan describing the extent to which current tenants will be relocated or displaced;
  • Considers the deferred developer fee a firm source of financing. If the project reduces the developer fee, UHC may reduce the credit amount;
  • Establishes deadlines and late fees for failure to pay the required reservation fee;
  • Implements criteria and point scoring structure for Enterprise Green Communities certification;
  • Reduces available point totals for 3- and 4- bedroom units;
  • Adds points available for project amenities, such as bike rack, garden, wellness room, on-site storage and proximity to parks, etc.
  • Reduces available point totals for 501(c)(3), CDHOs and/or PHAs.

NMTC

Sustainable Development

NMTC

New Publication on Smart Growth and Rural Communities

The International City/County Management Association has issued a new publication, Putting Smart Growth to Work in Rural Communities. Funded by the U.S. Environmental Protection Agency (EPA), the report is designed to provide rural decision-makers with a resource for balancing competing goals while creating more vibrant, sustainable communities. Historic preservation, tourism and the Main Street approach to community revitalization are highlighted strategies.

Market Analysis

NMTC

HUD Solicits Public Comment on 2011 AHS

The U.S. Department of Housing and Urban Development is soliciting comments from the public on the data collection process for the 2011 American Housing Survey (AHS). The AHS provides a periodic measure of the size and composition of the country’s housing inventory and includes data on topics such as the amount and types of changes in the inventory, the physical condition of the inventory, the characteristics of the occupants, housing costs, the persons eligible for and beneficiaries of assisted housing, and the number and characteristics of vacancies.

NMTC

HUD Releases Preview of U.S. Housing Market Conditions for Second Quarter 2010

The U.S. Department of Housing and Urban Development has released a preview of its U.S. Housing Market Conditions report for the second quarter of 2010. The report, released quarterly, provides statistical data and written reports on the nation’s housing markets. Each report includes overviews of economic and housing market trends for ten geographical regions, as well as a summary of the overall trends in national housing.

NH&RA Products
NMTC

Audio Recordings Available From Summer Institute, New Markets Tax Credit Symposium

NH&RA is pleased to offer digital audio recordings of ten select panel sessions exhibited during the 2010 Summer Institute & Pre-Conference Symposium on New Markets Tax Credits. Available recordings include:

  • Structuring Transactions Around the New Related Party Rules
  • Using NMTCs to Achieve Comprehensive Neighborhood Redevelopment
  • Getting CDEs & Investors Comfortable with Alternative Leveraged Lending Sources
  • State-of-the-Industry: Developers Roundtable
  • Mind-the-Gap: Successful Strategies for Procuring Gap Financing
  • Disposition Opportunities: The Developers Perspective
  • Strategies for Preserving & Recapitalizing Older Properties
  • Condo Conversion Redux: Converting Distressed Properties into Affordable Housing
  • The Evolving Tax-Exempt Bond Market: Utilizing the NIBP & BAB Programs
  • Maximizing the Value of State Tax Credits

Get the "full package" or mix-and-match! All orders include a digital copy of the conference book and PowerPoint presentations.

Click here for pricing and the order form.
Click here to view a list of speakers.

Upcoming State & Local Events

NMTC

NEW! NMTC Compliance & Asset Management Conference (August 30)

2010 Kansas Housing Conference (September 8-10)

Arizona Announces 2010 Housing Forum (September 15-17)

North Carolina Affordable Housing Conference (September 16-17)

NEW! CityScape Schedules Conference on Historic Preservation (October 19)

Housing Washington 2010 Conference (October 19-20)

WHEDA 2010 Multifamily Housing Conference (October 21)

New Hampshire Announces Statewide Housing Conference (October 25)

New Mexico 2010 Governor's Housing Summit (November 3-5)

South Dakota Annual Housing Conference (November 9-10)

Click here to view Event Details

NMTC

Conference Agenda

October 5, 2010

11:00 am

NCAHMA Executive Committee Meeting

Executive Session

1:30 pm

Welcome & Introductions

2:00 pm

Affordable Housing & Tax Credit Policy Update

This Spring was one of the busiest on record for affordable housing and tax credit policy advocates. This session will convene industry experts to update our members on critical policy developments from Congress and HUD. Highlights include:

  • FHA Underwriting Changes
  • Securing the Future of the LIHTC
  • Expanding Opportunities to Preserve Affordable Housing Through Transformation of Rental Assistance and Preservation Legislation
  • Taxation of Carried Interest: What Does It Mean For Developers & Investors?
  • ...and more

Glenn Graff, Applegate & Thorne-Thomsen LLP, Chicago, IL
Ronne Thielen, Centerline Capital Group, Irvine, CA
Peter Bell, NH&RA, Washington, DC
Thom Amdur, NH&RA, Washington, DC

3:15 pm

State-of-the States: Tax Credit Allocators Roundtable

Executives from housing finance agencies discuss trends and issues in their qualified allocation plans. Special focus on policy impacting the allocation of 9% LIHTCs, Tax Exempt Bonds and 1602/Exchange funds.

David Allen, Michigan State Housing Development Authority
Jacob Sipe, Indiana Housing & Community Development Authority
Additional speakers TBA

4:30 pm

Investor Issues

This panel brings key leaders from the Affordable Housing Investors Councils to discuss key developments in underwriting, risk rating, asset management and more...

Gina Bender, Bank of America Merrill Lynch
Doug Koch, Advisory Affiliates, Boston, MA
Additional speakers TBA

5:30 pm

Underwriting Tax Credit Equity

In the wake of the financial downturn, developers, syndicators and housing finance agencies continue to seek a workable equilibrium in the equity market. This panel will bring together active syndicators and investors to discuss key issues impacting the access to tax credit equity including:

  • The Effect of Recapitalization and Deconsolidation On Equity Providers
  • New LIHTC Fund Structures
  • Attracting New Tax Credit Investors
  • Tax Credit Portfolio Trends
  • State of the Market Place, Pricing & Terms

John Simon, Sidley Austin LLP, Chicago, IL
Ronne Thielen, Centerline Capital Group, Irvine, CA
Pat Nash, JP Morgan Chase, Chicago, IL
Mandy Kozminske, US Bank, St. Louis, MO
Joe Hagan, National Equity Fund, Chicago, IL

6:30 pm

Networking Reception

October 6, 2010

8:00 am

Committee Meetings and Networking Breakfast

All participants welcome!

9:30 am

Committee Reports

10:00 am

Understanding The Implication of New Area Median Incomes & Fair Market Rents On Affordable Housing Development & Market Analysis

Bud Clarke, Boston Financial Investment Management, Boston, MA
Brad Weinberg, Novogradac & Company, Bethesda, MD

11:15 am

Demographic & Census Update

This panel will explore the transition that data producers and analysts will be making the 2010 Census and the American Community Survey.

Julia Lavigne, Ribbon Demographics, Newcastle, CO
Ken Hodges, Nielson Claritas, Ithaca, NY

12:00 pm

Networking Lunch & Regional Market Updates

1:30 pm

Measuring and Projecting Absorption: Reconciling Conflicting Economic, Construction & Demographic Data

John Prior, Prior & Associates, Denver, CO
Tad Scepaniak, Real Property Research Group, Woodstock, GA
Additional speakers TBA

2:45 pm

Key Issues & Developments In Market Analysis Part II

This session will explore key issues in affordable housing market analysis including defining scope of work, MAP market study guidelines and best practices. A can't miss session for analysts and users of market studies. This session is a follow-up from the Part I session held at NCAHMA 2010 Spring Underwriting Forum.

3:45 pm

Alternative Field Work Business Opportunities: Site Inspections and Asset Management Inspection

Linda Cargill, Cargill Investment Group, Boston, MA
Doug Koch, Douglas P. Koch, MAI, AICP, Newton, MA
Lolita Sereleas, Fund Consulting, Chicago, IL

4:30 pm

End of Meeting

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North Dakota SCT: Gov't Seizure A Function Of Police And Tax Power, Not Eminent Domain

Posted: 25 Aug 2010 12:01 AM PDT

We like creative lawyering. We really, really do. After all, we like to think of ourselves as creative lawyers. But sometimes, you wish your colleagues would keep their ardor for seeing a "taking" in every situation in check, because by raising -- and losing, badly -- these marginal claims, they lessen tolerance for more serious takings challenges, and make proving substantial claims more difficult.
So appears to us the case of Bala v. North Dakota, No. 20090312 (Aug. 23, 2010), in which the North Dakota Supreme Court affirmed the dismissal for failure to state a claim of a number of takings challenges to the state and federal governments' enforcement actions against a horse racing enterprise that -- oops! -- missed about 10 million in excise tax payments. Here's the fact summary from the opinion:
In 2003, state and federal authorities began investigating RSI’s account wagering activities. The State, through the North Dakota Racing Commission, determined nearly $9 million from approximately $99 million in account wagering bets was owed as excise taxes and brought a civil lawsuit against Bala and RSI to collect the taxes, and a receiver was appointed to manage RSI.  RSI paid almost $2 million of the taxes, and after Bala filed for bankruptcy on behalf of RSI, the State made a priority claim for the remainder of the excise taxes in the bankruptcy court. State and federal criminal charges were also brought against Bala, RSI, and others involved. After Bala was convicted of numerous federal law violations by a federal court jury, the state criminal proceedings were dismissed. Bala’s federal court convictions were ultimately overturned based on insufficiency of the evidence. See United States v. Bala, 489 F.3d 334 (8th Cir. 2007). However, Bala and RSI’s subsequent petition for a certificate of innocence, a prerequisite to seeking damages against the United States for wrongful imprisonment, was denied.  See United States v. Racing Services, Inc., 580 F.3d 710, 714 (8th Cir. 2009) ("RSI and Bala secretly collected and distributed $99,000,000 of parimutuel account wagers without paying one penny to charities, to the Racing Commission, or to the state treasurer, as North Dakota’s gambling laws required.").
Slip op. at 1-2. Rather than be thankful to be not spending time in the federal and/or North Dakota pokey, "[i]n April 2009, Bala and RSI brought this action against the State, claiming the State took RSI’s property without just compensation in violation of the takings clauses of the state and federal constitutions." Slip op. at 2. Their "interests" were property taken in violation of both the U.S. and the N.D. constitutions, in that they collected cash and took excise taxes, the plaintiffs asserted. The state moved to dismiss for failure to state a claim, which the trial court granted.
The N.D. Supremes, made short work of each of the takings claims and affirmed the dismissal. First, the court correctly noted that the government was not exercising its eminent domain power, but rather its police power. See slip op. at 4. Unfortunately, the court stopped there, as if that conclusion was the end of its analysis. Id. ("Assuming for purposes of argument that the State "took" anything from Bala and RSI in this case, we conclude the State was exercising its police power rather than its eminent domain power."). Problem is, that is always the case where the plaintiff alleges a regulatory taking; by definition, it is the de facto taking of property by the government exercising some power other than the eminent domain power. See Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005).The court needed to explain why it was not a regulatory taking for the government to try and obtain the $10 milion the plaintiff was obligated by law to pay, but did not.
On the second point, the court's analysis was more on the mark. It concluded that the plaintiff did not possess "property" protected by the takings clause because "gambling in North Dakota is a 'highly regulated' industry." Slip op. at 4. You can hardly claim to have unfettered rights to property when the property itself depends on the state for its existence, or is subject to such heavy regulation that you have no reasonable expectation of doing whatever you please with it.
The court also dealt with two other "takings" claims -- see slip op. at 4-6 -- but we will leave those for you to review. Bottom line: no viable takings claim was asserted.
Barista's note: this case was no Amerisource, where the government seized the property of an innocent witness to a crime, only returning it (unusued in the prosecution) after the property became worthless. Even there, the innocent property owner lost what was a much closer call, in our opinion, than the Bala case.
The N.D. court's analysis of the plaintiff's takings claims was really not necessary, and this opinion only made it harder for courts to address substantial and genuine claims that government has regulated property so far as to be the equivalent of a taking.

This posting includes an audio/video/photo media file: Download Now

CJ-Appointee Recktenwald's ICA Opinions

Posted: 24 Aug 2010 06:02 PM PDT

Barista's note: This post, like our earlier post on Justice Recktenwald's Supreme Court opinions, is by our Damon Key colleague Rebecca A. Copeland. For those of you who have been following the process, Rebecca is familiar: she was present at the Judiciary Committee hearings when we live-blogged the Katherine Leonard confirmation. Her last post prior to joining Damon Key was as a Deputy Solicitor General for the State of Hawaii, where she argued important appeals for the State. If you are on Twitter, follow her at @rcopelandhi.

Reminder: we will be live blogging the Senate Judiciary hearings on Justice Recktenwald's appointment starting at 9:50 a.m. on Wednesday, August 25, 2010.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++

In the second edition of opinions by Hawaii Supreme Court Chief Justice appointee Mark E. Recktenwald (currently serving as an Associate Justice on the court), we review the opinions he authored during his tenure on the Intermediate Court of Appeals where Justice Recktenwald served as Chief Judge from April 30, 2007 until he moved to the Hawaii Supreme Court in May 2009.

Disclaimer: The following does not include any summary disposition orders, orders dismissing appeal, or other court orders – only opinions authored by then Chief Judge Recktenwald or opinions in which he concurred.  I did not find any published opinions in which he dissented.

  • State v. Mark, No. 26784 &  No. 26785, May 8, 2009. Recktenwald authored a panel opinion that affirmed defendant’s convictions for murder, attempted murder, and attempted assault charges stemming from the Baskin Robbins incident where one police officer was killed, but vacated the extended term sentences. On May 12, 2010, the Hawaii Supreme Court in an opinion authored by Justice Acoba affirmed concluding that (1) jury instruction related to the defense of use of force in defense of others was erroneous but harmless error because there was no evidence the defendant was justified in using force in the defense of others; (2) concurrent representation of defendant and a hostile witness ended before actual conflict arose; (3) defendant was not denied a fair trial; and (4) on remand the court could empanel a jury to consider extended term sentencing.
  • State v. Espinosa, No. 29094, April 30, 2009. Recktenwald concurred in an opinion authored by Judge Watanabe and joined by Judge Fujise. The panel’s opinion reversed the conviction of the defendant for street solicitation of prostitution because the statute excludes a patron of a prostitute – like defendant – from criminal liability.  Recktenwald concurred, noting that the statute is ambiguous with regard to whether it applies to a patron who offers to pay the fee.
  • Liberty Mutual Ins. Co. v. Sentinel Ins. Co., Ltd., No. 27429, March 31, 2009.  Judge Watanabe authored a partial opinion of the court and Judge Recktenwald authored a partial opinion of the court (from which Judge Watanabe dissented).  The third judge on the panel (Judge Foley) joined both partial opinions.  In her partial opinion, Judge Watanabe concluded that joint and several liability applies to contractual UIM and UM claims, Liberty Mutual was obligated to pay UM benefits, attorneys’ fees award was not error, and there was no error in prejudgment interest.  In his partial opinion, Recktenwald concluded that the “other insurance” clause did not limit or reduce liability for UM payments.
  • Barbee v. Queen’s Medical Ctr., No. 28084, Oct. 31, 2008.  The court affirmed the circuit court’s judgment notwithstanding the jury’s verdict in a medical negligence case due to lack of expert medical testimony to establish causation.
  • In re Guardianship of Doe, No. 28139, Oct. 31, 2008.  In a case where an individual was appointed guardian of his incapacitated mother, he could not recover attorneys’ fees form his brother and sister-in-law because they were not parties to the proceeding.
  • Carlisle v. One (1) Boat/Tran, No. 26995, February 27, 2008.  In this forfeiture proceeding, Recktenwald authored the opinion for the court holding that the ICA had jurisdiction because the appeal was not time barred and the circuit court erred in dismissing the State’s petition for forfeiture. On November 17, 2008 in an opinion authored by Chief Justice Moon, the Hawaii Supreme Court reversed the ICA’s opinion inasmuch as the relevant statutes and regulations do not provide the required specific authorization for the State’s forfeiture claims (after agreeing that the ICA had jurisdiction).
  • Inoue v. Inoue, No. 28028, January 31, 2008.  In this divorce case, Recktenwald’s opinion for the court affirmed the family court’s holding that Wife was equitably estopped from denying Husband was the father of one of her children for purposes of determining custody where the amended birth certificate showed Husband and the father and Wife and Husband treated the child as a daughter of Husband.
  • State v. Yamada, No. 27778, Dec. 12, 2007.  The court affirmed conviction for robbery and assault because (1) there was no error in the introduction of another apprehension with a baseball bat, photo lineup that included defendant, or photo of bat; (2) sufficient evidence supported the convictions; (3) there was no prosecutorial misconduct; and (4) there was no justification nor authority to revisiting prior Hawaii Supreme Court rulings in the case.
  • State v. Fagaragan, No. 27938, Sept. 10, 2007.  Recktenwald’s opinion for the court affirmed convictions for promoting a dangerous drug and prohibited acts related to drug paraphernalia, but reversed conviction for attempted promoting a dangerous drug because the legislature did not intend for multiple punishments to be imposed in cases involving possession and attempted distribution under HRS 712-1241 where the convictions rest on evidence of possession by a defendant of the same drugs at the same moment in time.
  • State v. Mars, No. 27977, Aug. 16, 2007.  The court affirmed conviction on three counts of sexual assault involving two different minors because (1) there was no error in precluding the defendant from introducing certain evidence of one of the minor’s sexual orientation or sexual history; (2) no error in permitting doctor testimony; (3) evidence of defendant’s improper comments regarding the same minor and certain incidents concerning the minor were admissible; and (4) no prosecutorial misconduct in closing argument.
  • State v. Kolia, No. 28071, Aug. 16, 2007.  Recktenwald’s opinion for the court affirmed in part and vacated in part conviction because defendant relinquished any expectation of privacy he had in a fanny pack he wore (that contained the drugs and drug paraphernalia that were the basis for the charges) where he voluntarily discarded the fanny pack while fleeing from police.  However, the police should have advised defendant of his Miranda rights before questioning him.
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August 23, 2010

LAW FOR DUMMIES, RICHARD DICK HOFFMAN, MAI APPRAISAL INSTITUTE

Posted by Cochise on August 23, 2010 at 10:42:42:

In Reply to: Re: Richard Dick Hoffman MAI, UnExpert Witness posted by Cochise on April 08, 2008 at 10:27:57:

Re: Richard Dick Hoffman MAI, "LAW FOR DUMMIES"  ( richard h hoffman is a member of the appraisal instute and author of "revaluation for dummies" busted for praqcticing law without a licence.)

[Cite as Ohio State Bar Assn. v. Appraisal Research Corp., (MAI, APPRAISAL INSTITUTE) 125 Ohio St.3d 508, 2010-Ohio-
2204.]
OHIO STATE BAR ASSOCIATION v. APPRAISAL
RESEARCH CORPORATION ET AL.
[Cite as Ohio State Bar Assn. v. Appraisal Research Corp., (mai APPRAISAL INSTITUTE)
125 Ohio St.3d 508, 2010-Ohio-2204.]
Unauthorized practice of law — Defended corporation’s appraisals at board-ofrevision
hearings — Consent decree accepted — Injunction imposed.
(No. 2010-0151 — Submitted February 17, 2010 — Decided May 25, 2010.)
ON FINAL REPORT by the Board on the Unauthorized Practice of Law of the
Supreme Court, No. UPL 09-04.
__________________
Per Curiam.
{¶ 1} Pursuant to Gov.Bar R. VII(5b), the Board on the Unauthorized
Practice of Law has recommended our approval of a consent decree proposed by
relator, Ohio State Bar Association, and respondents, Appraisal Research
Corporation (“ARC”), Sue Maag, and Richard H. Hoffman. (MAI APPRAISAL INSTITUTE) We accept the
board’s recommendation and approve the proposed consent decree submitted by
the parties as follows:
{¶ 2} “1. Respondent, ARC provides appraisal services to counties
throughout Ohio, specifically to County auditors.
{¶ 3} “2. In addition to [those appraisal duties], Respondents ARC,
Hoffman, and Maag assumed, with the consent of the Boards of Revision, duties
to ‘defend’ ARC’s appraisals at hearings of the Boards of Revision, to examine
witnesses at such hearings, and to render advice concerning the conduct of such
hearings.
{¶ 4} “3. Respondents admit [that they defended ARC’s appraisals at
hearings of the Boards of Revision, examined witnesses at such hearings, and
SUPREME COURT OF OHIO
2
rendered advice concerning the conduct of such hearings], and that [that conduct]
constitutes the unauthorized practice of law. Respondents state that they acted
with a good faith belief that this conduct was proper pursuant to the provisions of
[Ohio Adm.Code] 5703-25-08 * * *.
{¶ 5} “4. Respondents have ceased the conduct [that constitutes the
unauthorized practice of law], have agreed not to engage in such conduct in the
future, and have consented to the imposition of an injunction against future
unauthorized practice of law.
{¶ 6} “5. Relator’s position is that no penalty be imposed, and the Board
so recommends.
{¶ 7} “6. Respondents, and their respective successors and assigns,
agents, members, officers, representatives and employees are permanently
enjoined from defending their appraisals at hearings, examining witnesses at such
hearings, rendering legal advice, and otherwise engaging in the unauthorized
practice of law.
{¶ 8} “7. Respondents are ordered to notify in writing the auditor of
each of the counties in Ohio that employed one or more of Respondents to
provide services to its Board of Revision that, by engaging in the prohibited
conduct, Respondents engaged in the unauthorized practice of law and to deliver
to Relator’s counsel a copy of each such notice.
{¶ 9} “8. Respondents are hereby ordered to reimburse the Board and
Relator their costs and expenses in this matter.
{¶ 10} “9. Respondents are hereby ordered to pay costs.
{¶ 11} “10. No civil penalty is imposed.”
Judgment accordingly.
PFEIFER, LUNDBERG STRATTON, O’CONNOR, O’DONNELL, LANZINGER, and
CUPP, JJ., concur.
BROWN, C.J., not participating.
Re: Richard Dick Hoffman MAI, "LAW FOR DUMMIES"

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August 20, 2010

Issue Number: IRS Summertime Tax Tip 2010-20

Issue Number:    IRS Summertime Tax Tip 2010-20
Inside This Issue

--------------------------------------------------------------------------------

Employee vs. Independent Contractor – Seven Tips for Business Owners 

As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.

Here are seven things every business owner should know about hiring people as independent contractors versus hiring them as employees.

1. The IRS uses three characteristics to determine the relationship between businesses and workers:

Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job.
Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
2. If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
 
3. If you can direct or control only the result of the work done -- and not the means and methods of accomplishing the result -- then your workers are probably independent contractors.
  
4. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.

5. Workers can avoid higher tax bills and lost benefits if they know their proper status.
 
6. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.

7. You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link.  Additional resources include IRS Publication 15-A, Employer's Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).


Links:

Publication 15-A, Employer's Supplemental Tax Guide (PDF)
Publication 1779, Independent Contractor or Employee (PDF)
Publication 1976, Do You Qualify for Relief under Section 530? (PDF)
Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF)
 

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August 19, 2010

SCE Energy Centers Help You Make Smart Energy Choices

SCE Energy Centers Help You Make Smart Energy Choices http://www.sce.com/b-sb/energy-centers/workshops-classes.htm

At SCE's energy centers, AGTAC and CTAC, you'll find the information, training, and support you need to make important energy management and energy efficiency choices.

Both facilities offer basic and advanced classes on lighting, HVAC (heating, ventilation, and air conditioning), motors, and refrigeration. These courses are available throughout SCE's service territory. Additionally, there are classes offered focusing on power quality, demand response, electrical safety, and food service technologies. CTAC and AGTAC offerings are tailored to commercial and industrial customers, while AGTAC also includes classes that meet the needs of its agricultural customers.

In addition, both facilities serve as high-quality special events and training venues, offering the best in conference center design, audiovisual support, and catering services.

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August 18, 2010

Book flying
Shop the big summer sale at APAPlanningBooks.com!
Dear Curtis:

As a valued customer, you are being offered 15% off 100 of our best selling books and training CD-ROMs. APA members get even greater savings with 15% off the discounted member price.
There’s more! In recognition of the fifth anniversary of Hurricane Katrina this month, APAPlanningBooks.com is taking 30% off the price of some of APA’s newest publications: Delta Urbanism: New Orleans, Hazard Mitigation: Integrating Best Practices, and other top books on disaster-related planning.
While you're shopping the sale, browse through our best sellers and new releases. To receive your discount, enter code "BIGSALE10" in the space for "Promotional Code" at checkout. Don't delay — this special discount is available only through August 31!

Want more savings on planning books? Sign up today to receive a monthly e-newsletter with more special offers from APAPlanningBooks.com.

Happy summer shopping from APAPlanningBooks.com!


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August 17, 2010

8/17/2010www.LandAndFarm.comNews and property listingsspacer
spacer
TABLE OF CONTENTS:

1. Deadline Approaching for USDA Conservation Reserve Program
2. Get Unlimited LandAndFarm.com Listings
3. Farmland Values Continue to Rise
4. Wyoming Pressures Feds to Value Grand Teton Lands
5. Recent Properties


 Deadline Approaching for USDA Conservation Reserve Program

Farmers and ranchers wishing to receive financial aid for helping establish and protect wildlife habitats on their land have until close of business on August 27, 2010 to apply for the USDA's Conservation Reserve Program (CRP).

The government-backed program offers landowners financial incentives to establish wildlife habitats and offers rental payments to help offset lost income from forgone agricultural production. Cropland that is labeled as "highly erodible" or is within a national or state Conservation Priority Area is generally eligible to enroll in the program. Landowners with property that is currently covered under an existing CRP are also encouraged to apply.

The 10-15 year contracts awarded during this sign up period will become effective on October 1, 2010.


Find out more about the CRP and how to apply on the USDA Website.



 Get Unlimited LandAndFarm.com Listings

Earlier this summer, we here at LandAndFarm.com had a crazy idea - Let our customers list all the properties they want at a price below any we've ever offered. So far, it's been a success.

With a LandAndFarm.com Unlimited Plan you can list all the properties you want. It's an all-you-can-eat land for sale buffet and we're inviting you to the table!

To start listing your properties, visit LandAndFarm.com today. 



 Farmland Values Continue to Rise

On Friday, August 13, 2010, The Federal Reserve Bank of Kansas City announced that farmland values continued to rise during the second quarter.

In a survey of banks in the 10th Federal Reserve District, the Feds showed a 5.6% annual increase in the value of irrigated cropland and a 4.8% increase in non-irrigated land. Kansas showed the largest increases with irrigated land values jumping 9.2%. Nebraska's 6.4% spike represents the next biggest increase.

The 10th Federal Reserve District, a barometer for farmland values nationwide, includes Kansas, Nebraska, Oklahoma, Wyoming, Colorado, northern New Mexico and western Missouri. 

Source:
http://www.businessweek.com/ap/financialnews/D9HIPG800.htm




 Wyoming Pressures Feds to Value Grand Teton Lands

Dave Freudenthal may be on the last few months of his term as Wyoming's governor, but he's trying to go out with a multi-million dollar bang.

For over a decade, Wyoming has struggled to get a fair value out of two parcels of state-owned land within the Grand Teton National Park. The state's goal has been to trade the park land for property of equal value, ideally land that could be developed for commercial purposes. Though the roughly 2 square miles of land are worth over $100 million, the state is currently only getting around $3,000 a year from cattle ranching grazing leases.

Now Governor Freudenthal is stepping up pressure on the federal government by threatening to auction the land off to private developers. Though experts don't expect such a sale to take place, the state's tactics have led the federal government to agree to a joint appraisal to determine the property's value.

Source:
http://www.npr.org/templates/story/story.php?storyId=129007236



Sample of Recent Properties

Greenway Tract (land - recreational, timberland - planted) 33 acres. Georgia
Tn River Here We Come. (agriculture - vineyard, land - recreational, land - residential) 15 acres. Linden, Tennessee
03 Fm 1885 (agriculture - pasture/ranch) 74 acres. Weatherford, Texas
27 Acres In A Good Community (land - hunting, land - recreational, timberland - natural) 27 acres. Regan, Tennessee
Great Small Farm Ne Ga. (agriculture - organic, agriculture - pasture/ranch, land - residential) 23 acres. Hull, Georgia
325 Stanfill Rd (agriculture - agribusiness, land - recreational, land - residential) 4 acres. Lexington, Tennessee
Trigger Would Be Happy Here (agriculture - agribusiness, agriculture - horse, agriculture - pasture/ranch) 8 acres. Regan, Tennessee
GP Tract (land - hunting, land - recreational, timberland - planted) 117 acres. Georgia
176 Beech Cove (land - recreational, land - residential, other - waterfront) Lexington, Tennessee
County Line 11.49 Acres (agriculture - agribusiness, land - recreational, land - residential) 11 acres. Jackson, Tennessee
3.8 Acres No Retrictions (land - recreational, land - residential, timberland - natural) 4 acres. Tennessee
Notice Of Trustee Auction (land - residential) 9 acres. Forest Hill, West Virginia
Farm With Timber (agriculture - farm, land - hunting, timberland - natural) 100 acres. Mineral wells, West Virginia
Lot 20 Pine Lake (land - recreational, land - residential, other - waterfront) 1 acres. Lexington, Tennessee
Livable Hunting Cabin (land - hunting, land - recreational, land - residential) 83 acres. West Virginia
Lender Owned Property (land - residential) 6 acres. Lewisburg, West Virginia
Unrestricted Acreage (land - hunting, land - recreational, land - undeveloped) 11 acres. Green Spring, West Virginia
Quail Valley (land - residential) Keyser, West Virginia
Multiple Use Property (land - commercial/other, land - industrial, land - residential) 1 acre. san bernardino, California
S. Rice Ave. (agriculture - agribusiness) 24 acres. Oxnard, California
Foothill Rd/lLinden Ave. (agriculture - agribusiness) 6 acres. California
S. Rice Ave (agriculture - agribusiness) 27 acres. Oxnard, California
Recreational Timber Acreage (land - recreational, timberland - natural) 140 acres. Round O, South Carolina
American Land 2058 (land - residential) 2 acres. Texas
Santa Ynez Gardens Inc. (agriculture - agribusiness) 5 acres. Santa Ynez, California
Piedmont Acreage Tract 3 (land - commercial/other, land - hunting, land - industrial) 167 acres. Piedmont, South Carolina
164 acre Farm (agriculture - farm, land - hunting, land - recreational) 164 acres. Salem, Missouri
Home On 18 Ac Pasture Land (agriculture - pasture/ranch, land - hunting, land - residential) 18 acres. McComb, Mississippi
23 Ac W Lake Woods Pasture (agriculture - horse, land - hunting, other - golf-related) 23 acres. Martinsville, Illinois
310 Acre Preserved Farm (agriculture - farm, agriculture - horse, land - residential) 310 acres. North Hanover, New Jersey
2 Acre Pecan Farm And Home (agriculture - farm, agriculture - orchard, land - residential) 2 acres. Huntsville, Alabama
31 Acres In 3 Tracts (agriculture - pasture/ranch, land - recreational, land - residential) 31 acres. Stuart, Virginia
Prime Commercial Real Estate (land - commercial/other, land - undeveloped) 2 acres. Norwalk, Ohio
Gorgeous Private Lot (land - recreational, land - residential) 5 acres. Oneonta, New York
American Land 2063 (land - residential) Texas
Pristine Building Site (land - residential) 3 acres. Duck River, Tennessee
52.74 Acres (land - recreational, land - residential) 53 acres. Cairo, West Virginia
263 Acres (land - recreational) 263 acres. Mineral Wells, West Virginia
58.56 Acres (land - hunting, land - recreational) 59 acres. Harrisville, West Virginia
40 Acres Roane County WV (land - recreational, land - residential) 40 acres. Gandeeville, West Virginia
Beautiful Location (land - residential) 6 acres. Arcanum, Ohio
Prime Land (agriculture - farm, agriculture - horse, agriculture - vegetable) 22 acres. Arcanum, Ohio
Hughes County Grey Goose Farm (agriculture - farm, agriculture - pasture/ranch, land - hunting) 2 acres. Pierre, South Dakota
American Land 2060 (land - residential) New Mexico
Improved Lots (land - residential) 1 acres. Miamisburg, Ohio
20.67 Acres (land - hunting, land - recreational) 21 acres. Harrisville, West Virginia
Great Hunting&Recreation Farm (land - hunting, land - recreational, land - residential) 195 acres. Taft, Tennessee
Organic Dairyhobbylivestock (agriculture - dairy, agriculture - farm, agriculture - pasture/ranch) 68 acres. New York
Building Lots (land - residential) 5 acres. Union City, Ohio
Lakeside Lodge (land - recreational, other - hospitality, other - waterfront) Waubay, South Dakota
33 acres. 15 acres. 74 acres. 27 acres. 23 acres. 4 acres. 8 acres. 117 acres. 11 acres. 4 acres. 9 acres. 100 acres. 1 acres. 83 acres. 6 acres. 11 acres. 1 acre. 24 acres. 6 acres. 27 acres. 140 acres. 2 acres. 5 acres. 167 acres. 164 acres. 18 acres. 23 acres. 310 acres. 2 acres. 31 acres. 2 acres. 5 acres. 3 acres. 53 acres. 263 acres. 59 acres. 40 acres. 6 acres. 22 acres. 2 acres. 1 acres. 21 acres. 195 acres. 68 acres. 5 acres.
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CLTA News

CLTA News
Wednesday, September 15, 2010 | 11:00am – 12:30pm (PST)
This is your chance to be educated on the issues surrounding California real property foreclosure. ...

The CLTA filed a new 2010 Homeowners Policy of Title Insurance and 2010 ALTA Expanded Coverage Residential Loan Policy. Both now contain ...

The CLTA this month filed a friend of court (amicus curiae) brief jointly with First American, Stewart and North American. The brief was filed ...

The CLTA is proud to welcome North Coast Title Company as a California Land Title Association member. ...

> Sacramento Report
A bill touted as an easy alternative to probates and trusts for seniors, AB 724 (DeVore) failed to ...

Assembly Bill 1718 (Blumenfield), modifying the senior citizen property tax postponement program, is now on the Senate floor. ...

The Buyer’s Choice Act was passed by the Legislature last year to prohibit a mortgagee or beneficiary under a residential ...

> Industry News
The Department of Veterans Affairs announced new requirements concerning closing costs on the HUD-1 for loan applications taken ...

The Environmental Protection Agency has declared the Los Angeles River to be a navigable waterway. This designation means ...

The NAIC is looking at changing the Model Insurance Holding Company System Regulatory Act and its regulations. Any recommended changes ...

In a misguided attempt to raise revenue, the new Health Care Bill enacted sweeping new 1099 reporting with a dramatic increase in penalties. ...

The City of Los Angeles now requires a lender to register property with the City Housing Department or MERS within 30 days of ...

Bulletin 10/11-13 - August 6, 2010
The Franchise Tax Board (FTB) announced today that it will stop accepting applications for the First-Time Buyer Credit at ...

Bulletin 10/11-8 - July 21, 2010
California State Attorney General Jerry Brown is suing the federal housing agencies, asking a judge to stop government-sponsored entities from ...

> Court Cases
In re: Hastie (Weinkauf v. Florez) (A127069)
An administrator of decedent's estate sought to set aside two deeds on the basis that ...

Bank of America v. Stonehaven Manor, LLC (C060089)
The property of a guarantor of a debt--a debt which is secured by the real property of the principal debtor and also that of ...
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Proposed Fiscal Year 2011 Fair Market Rents

Proposed Fiscal Year 2011 Fair Market Rents

Proposed Fiscal Year 2011 Fair Market RentsThe proposed Fiscal Year (FY) 2011 Fair Market Rents (FMRs) were published in the Federal Register on Wednesday, August 4, 2010. A 30-day comment period has been provided to ensure that final FMRs are published by October 1. Subject to public comment, the proposed FMRs are used in the Housing Choice Voucher, the Moderate Rehabilitation, the project-based voucher, and other programs that require location-specific economic data.

The FMRs are estimated at 40th and 50th percentile rent levels. Some areas are granted higher FMRs (based on the 50th percentile rather than the 40th percentile of the local rent distribution) to achieve deconcentration of units in high poverty areas by voucher holders. An area that qualifies for a 50th percentile is set at that level for three years, after which deconcentration progress is evaluated. For the proposed FY 2011 FMRs, 18 FMR areas are eligible for the 50th percentile.

In addition to announcing the period for public comments on all published FMRs, the Federal Register notice announces the FMRs for the small area FMR demonstration project in Dallas, TX (provided in an addendum to the Schedule B table). These FMRs will be used to operate the Section 8 voucher program in the Dallas HMFA (HUD Metro FMR area); for all other programs, the area-wide FMR listed in Schedule B should be used. Comments on the small area FMR demonstration project that were collected under a notice published May 18, 2010 will be discussed in a forthcoming notice specifically on the small area FMRs.

Section 8(c)(1) of the United States Housing Act of 1937 requires the Secretary to publish FMRs periodically, but not less than annually, to be effective on October 1 of each year. The tables, documentation system, and a copy of the preamble are available from HUD USER at www.huduser.org/datasets/fmr.html.

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August 16, 2010

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August 15, 2010

EPA To Hold Public Hearings on Proposed Rule to Reduce Interstate Transport of Ozone and Fine Particle Pollution

CONTACT:
Enesta Jones
jones.enesta@epa.gov
202-564-7873
202-564-4355

FOR IMMEDIATE RELEASE
August 13, 2010

EPA To Hold Public Hearings on Proposed Rule to Reduce Interstate Transport of Ozone and Fine Particle Pollution
WASHINGTON The U.S. Environmental Protection Agency (EPA) will hold three public hearings on its proposed “transport rule,” which would cut power plant pollution that drifts across the borders of 31 eastern states and the District of Columbia. The proposed rule, along with local and state air pollution controls, is designed to help areas in the eastern United States meet existing national air quality health standards.
Each hearing will begin at 9 a.m. and continue until 8 p.m. local time, or later if necessary. The public may pre-register to speak at the hearings at a specific time. People also may register in person on the day of the hearing, but cannot be guaranteed a specific time slot.


The hearing dates and pre-registration deadlines are:

Aug. 19 - Chicago
Wyndham Chicago
633 North St. Clair
Pre-registration deadline: 5 p.m., Aug. 17


Aug. 26 - Philadelphia
Radisson Plaza – Warwick Hotel
1701 Locust St.
Pre-registration deadline: 5 p.m., Aug. 24

Sept. 1 - Atlanta
Renaissance Downtown Atlanta
590 West Peachtree St., NW
Pre-registration deadline: 5 p.m., Aug 30

To pre-register to speak at the hearings, please contact Pam Long at long.pam@epa.gov, or 919-541-0641.
R276

Note: If a link above doesn't work, please copy and paste the URL into a browser. 

 

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understand the FHAA

A publication from the United Spinal Association to help both persons with disabilities and advocates better <a href="http://www.disability.gov/housing/laws_%26_regulations ">understand the FHAA</a>. This document explains the law and how to make it work for people with disabilities.  This law is intended to increase housing opportunities for people with disabilities. However, individual citizens must come forward with concerns or file complaints if they believe their rights have been violated.  

You are subscribed to Fair Housing Act Laws & Regulations for Disability.gov. For more information visit this link:  http://www.disability.gov/housing/laws_%26_regulations

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August 09, 2010

Glendale Redevelopment Agency v. County of Los Angeles

Non-lawyers enjoy chastising lawyers by noting that the law is simple.  Non-lawyers will often quip, for example, “possession is nine-tenths of the law.”  A California Court of Appeal in the Second Appellate District, however, disagreed with that popular “principle.”

 

      On May 25, 2010, Division Five of the Second Appellate District issued its published opinion in Glendale Redevelopment Agency v. County of Los Angeles (109 Cal.Rptr.3d 815; 2nd Civil No. B212718; 2010 WL 2046929).  The opinion became final on July 27, 2010.

 

      In a case of “whose money is it,” the appellate court agreed with arguments made by Doug Evertz and Gillian van Muyden on behalf of the Glendale Redevelopment Agency (“Agency”).  The issue presented was whether the Auditor - Controller of the County of Los Angeles may refuse to allocate and pay property tax revenue rightfully belonging to the Agency.  The Agency made a clerical error, but later corrected a form documenting the amount of property tax revenue the County is required to pay the Agency.

 

Background:  The Statutory Tax Increment System

 

      The Agency is a community redevelopment agency authorized to implement redevelopment projects for the purpose of eliminating blight, under the Community Redevelopment Law (Health and Safety Code section 33000, et seq.).

 

      Redevelopment is designed to pay for itself.  In essence:

 

·         A redevelopment agency is not empowered to levy taxes, but it may acquire  debt through loans or the sale of bonds.

 

 

 

·         A redevelopment agency, therefore, finances its redevelopment project through borrowing.

 

 

 

·         The redevelopment agency repays its debt with the property tax attributable to the increase in value, which the local county taxing authority distributes to the redevelopment agency.

 

      The amount of tax increment to which a redevelopment agency is entitled each year is calculated through an annual “statement of indebtedness” (“SOI”).  Under Section 33675 (b):

 

Not later than October 1 of each year, for each redevelopment project for which the redevelopment plan provides for the division of taxes pursuant to Section 33670, the agency shall file, with the county auditor or officer described in subdivision (a), a statement of indebtedness and a reconciliation statement certified by the Chief Financial Officer of the Agency.

 

The statute specifies the information about debt and revenue which must be included in the SOI.

 

 

 

Facts of the Glendale Case

 

The facts of the case were not in dispute:

 

 

 

·         The Agency timely submitted an SOI to the County Auditor/Controller of the County of Los Angeles (“County”) for fiscal year 2006/07 before October 1, 2006.

 

 

 

·         The Agency’s SOI inadvertently underreported its debt.

 

 

 

·         In May 2007, the Agency realized the underreporting.  It immediately submitted a revised SOI to the County to reflect its actual debt and the full amount of the tax increment that the Agency should receive for the fiscal year.

 

 

 

·         The County refused to accept the Agency’s revised SOI.  The County stated, the County “has no discretion to accept an amended statement of indebtedness (SOI), after the statutory (October 1) deadline, much less to reallocate property tax revenues on that basis.”

 

 

 

·         The net result:  the County distributed $2.2 million of the Agency’s tax increment to other taxing entities, including over $1 million to the County’s general fund.

 

 

 

         At trial, the Agency submitted evidence that the County, in the past, reallocated property tax revenues to correct mistakes in the allocation of tax increments.

 

 

 

         The trial court, however, sided with the County.  The court found that Section 33675 was unambiguous in that nothing within that section expressly provides for the filing of amended SOIs.  The trial court’s decision effectively resulted in the Agency forfeiting its rights to receive “all” its tax increment guaranteed by the Constitution.

 

 

 

Appellate Court Declines to Elevate Form Over Substance

 

        The appellate court agreed with the Agency, and found that Section 33675 is ambiguous.  While that section does say that an SOI “shall” be filed by October 1, the appellate court noted that there is nothing in Section 33675 providing a redevelopment agency can never amend an SOI even if an error is discovered.

 

Key to the court’s ruling were the following:

 

·         The statutory scheme found in the Community Redevelopment Law and the California Constitution both provide that the tax increment “shall be allocated to and when collected shall be paid into a special fund of the redevelopment agency to pay the principal of and interest on loans” and other indebtedness.

 

 

 

·         Section 33675 is a procedural statute to assist in the distribution of property tax revenue -- it is not intended to limit a county’s duty to distribute all tax increment to which a redevelopment agency is constitutionally entitled.

 

 

 

·         Redevelopment agencies sell bonds to finance their projects.  The marketability of bonds is based upon an agency’s ability to repay the bonds.  Section 33675 should not be interpreted in a manner that impacts an agency’s ability to repay its lenders and bond holders.

 

 

 

·         Other taxing entities received property tax revenue to which they were not entitled.  Section 33675 should not be interpreted in a way that results in a redevelopment agency forfeiting its constitutionally guaranteed revenue, and other taxing entities receiving a windfall simply due to a clerical error.

 

The best way to sum this case up is to repeat what our parents taught us as children -- you cannot keep what does not belong to you.

 

 

 

 

 

 
 Murphy Evertz bank logo.jpg

 


   650 Town Center Drive, Ste. 550, Costa Mesa, CA  92626

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Leaders for Communities

Leaders for Communities

A message to all members of Leaders for Communities

If you're going to be in Philadelphia next week, please join us for a casual Networking/Happy Hour mixer with your Leaders for Communities peers!

Details:

When: Monday, August 16, 6:00 - 8:00pm

Where: SoleFood Lounge, Loews Philadelphia Hotel (lobby level)

1200 Market Street, Philadelphia, PA 19107

Food and drink will be available for purchase!

Meet and mingle with other LeadersforCommunties.org members, NeighborWorks staff, and other Community Development professionals from across the region!

Please wear your conference badge to help facilitate networking and look for fellow LeadersforCommunities.org members with special ribbons you can pick up on site at Registration!
 

Visit Leaders for Communities at: http://www.leadersforcommunities.org/?xg_source=msg_mes_network


 

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August 08, 2010

SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.

Subtitle F—Appraisal Activities
SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.
Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.)
is amended by inserting after 129G (as added by section 1464(b))
the following new section:
‘‘§ 129H. Property appraisal requirements
‘‘(a) IN GENERAL.—A creditor may not extend credit in the form
of a higher-risk mortgage to any consumer without first obtaining
a written appraisal of the property to be mortgaged prepared in accordance
with the requirements of this section.
‘‘(b) APPRAISAL REQUIREMENTS.—
‘‘(1) PHYSICAL PROPERTY VISIT.—Subject to the rules prescribed
under paragraph (4), an appraisal of property to be secured
by a higher-risk mortgage does not meet the requirement
of this section unless it is performed by a certified or licensed
appraiser who conducts a physical property visit of the interior
of the mortgaged property.
‘‘(2) SECOND APPRAISAL UNDER CERTAIN CIRCUMSTANCES.—
‘‘(A) IN GENERAL.—If the purpose of a higher-risk mortgage
is to finance the purchase or acquisition of the mortgaged
property from a person within 180 days of the purchase
or acquisition of such property by that person at a
price that was lower than the current sale price of the prop-
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erty, the creditor shall obtain a second appraisal from a
different certified or licensed appraiser. The second appraisal
shall include an analysis of the difference in sale
prices, changes in market conditions, and any improvements
made to the property between the date of the previous
sale and the current sale.
‘‘(B) NO COST TO APPLICANT.—The cost of any second
appraisal required under subparagraph (A) may not be
charged to the applicant.
‘‘(3) CERTIFIED OR LICENSED APPRAISER DEFINED.—For purposes
of this section, the term ‘certified or licensed appraiser’
means a person who—
‘‘(A) is, at a minimum, certified or licensed by the State
in which the property to be appraised is located; and
‘‘(B) performs each appraisal in conformity with the
Uniform Standards of Professional Appraisal Practice and
title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, and the regulations prescribed
under such title, as in effect on the date of the appraisal.
‘‘(4) REGULATIONS.—
‘‘(A) IN GENERAL.—The Board, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the
National Credit Union Administration Board, the Federal
Housing Finance Agency, and the Bureau shall jointly prescribe
regulations to implement this section.
‘‘(B) EXEMPTION.—The agencies listed in subparagraph
(A) may jointly exempt, by rule, a class of loans from the
requirements of this subsection or subsection (a) if the agencies
determine that the exemption is in the public interest
and promotes the safety and soundness of creditors.
‘‘(c) FREE COPY OF APPRAISAL.—A creditor shall provide 1 copy
of each appraisal conducted in accordance with this section in connection
with a higher-risk mortgage to the applicant without charge,
and at least 3 days prior to the transaction closing date.
‘‘(d) CONSUMER NOTIFICATION.—At the time of the initial mortgage
application, the applicant shall be provided with a statement
by the creditor that any appraisal prepared for the mortgage is for
the sole use of the creditor, and that the applicant may choose to
have a separate appraisal conducted at the expense of the applicant.
‘‘(e) VIOLATIONS.—In addition to any other liability to any person
under this title, a creditor found to have willfully failed to obtain
an appraisal as required in this section shall be liable to the
applicant or borrower for the sum of $2,000.
‘‘(f) HIGHER-RISK MORTGAGE DEFINED.—For purposes of this
section, the term ‘higher-risk mortgage’ means a residential mortgage
loan, other than a reverse mortgage loan that is a qualified
mortgage, as defined in section 129C, secured by a principal dwelling—
‘‘(1) that is not a qualified mortgage, as defined in section
129C; and
‘‘(2) with an annual percentage rate that exceeds the average
prime offer rate for a comparable transaction, as defined in
section 129C, as of the date the interest rate is set—
‘‘(A) by 1.5 or more percentage points, in the case of a
first lien residential mortgage loan having an original
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principal obligation amount that does not exceed the
amount of the maximum limitation on the original principal
obligation of mortgage in effect for a residence of the
applicable size, as of the date of such interest rate set, pursuant
to the sixth sentence of section 305(a)(2) the Federal
Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2));
‘‘(B) by 2.5 or more percentage points, in the case of a
first lien residential mortgage loan having an original
principal obligation amount that exceeds the amount of the
maximum limitation on the original principal obligation of
mortgage in effect for a residence of the applicable size, as
of the date of such interest rate set, pursuant to the sixth
sentence of section 305(a)(2) the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a)(2)); and
‘‘(C) by 3.5 or more percentage points for a subordinate
lien residential mortgage loan.’’.
SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.
(a) IN GENERAL.—Chapter 2 of the Truth in Lending Act (15
U.S.C. 1631 et seq.) is amended by inserting after section 129D (as
added by section 1461(a)) the following new section:
‘‘§ 129E. Appraisal independence requirements
‘‘(a) IN GENERAL.—It shall be unlawful, in extending credit or
in providing any services for a consumer credit transaction secured
by the principal dwelling of the consumer, to engage in any act or
practice that violates appraisal independence as described in or pursuant
to regulations prescribed under this section.
‘‘(b) APPRAISAL INDEPENDENCE.—For purposes of subsection (a),
acts or practices that violate appraisal independence shall include—
‘‘(1) any appraisal of a property offered as security for repayment
of the consumer credit transaction that is conducted in
connection with such transaction in which a person with an interest
in the underlying transaction compensates, coerces, extorts,
colludes, instructs, induces, bribes, or intimidates a person,
appraisal management company, firm, or other entity conducting
or involved in an appraisal, or attempts, to compensate,
coerce, extort, collude, instruct, induce, bribe, or intimidate such
a person, for the purpose of causing the appraised value assigned,
under the appraisal, to the property to be based on any
factor other than the independent judgment of the appraiser;
‘‘(2) mischaracterizing, or suborning any mischaracterization
of, the appraised value of the property securing the extension
of the credit;
‘‘(3) seeking to influence an appraiser or otherwise to encourage
a targeted value in order to facilitate the making or
pricing of the transaction; and
‘‘(4) withholding or threatening to withhold timely payment
for an appraisal report or for appraisal services rendered when
the appraisal report or services are provided for in accordance
with the contract between the parties.
‘‘(c) EXCEPTIONS.—The requirements of subsection (b) shall not
be construed as prohibiting a mortgage lender, mortgage broker,
mortgage banker, real estate broker, appraisal management company,
employee of an appraisal management company, consumer, or
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any other person with an interest in a real estate transaction from
asking an appraiser to undertake 1 or more of the following:
‘‘(1) Consider additional, appropriate property information,
including the consideration of additional comparable properties
to make or support an appraisal.
‘‘(2) Provide further detail, substantiation, or explanation
for the appraiser’s value conclusion.
‘‘(3) Correct errors in the appraisal report.
‘‘(d) PROHIBITIONS ON CONFLICTS OF INTEREST.—No certified or
licensed appraiser conducting, and no appraisal management company
procuring or facilitating, an appraisal in connection with a
consumer credit transaction secured by the principal dwelling of a
consumer may have a direct or indirect interest, financial or otherwise,
in the property or transaction involving the appraisal.
‘‘(e) MANDATORY REPORTING.—Any mortgage lender, mortgage
broker, mortgage banker, real estate broker, appraisal management
company, employee of an appraisal management company, or any
other person involved in a real estate transaction involving an appraisal
in connection with a consumer credit transaction secured by
the principal dwelling of a consumer who has a reasonable basis to
believe an appraiser is failing to comply with the Uniform Standards
of Professional Appraisal Practice, is violating applicable laws,
or is otherwise engaging in unethical or unprofessional conduct,
shall refer the matter to the applicable State appraiser certifying
and licensing agency.
‘‘(f) NO EXTENSION OF CREDIT.—In connection with a consumer
credit transaction secured by a consumer’s principal dwelling, a
creditor who knows, at or before loan consummation, of a violation
of the appraisal independence standards established in subsections
(b) or (d) shall not extend credit based on such appraisal unless the
creditor documents that the creditor has acted with reasonable diligence
to determine that the appraisal does not materially misstate
or misrepresent the value of such dwelling.
‘‘(g) RULES AND INTERPRETIVE GUIDELINES.—
‘‘(1) IN GENERAL.—Except as provided under paragraph (2),
the Board, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, the National Credit Union Administration
Board, the Federal Housing Finance Agency, and the Bureau
may jointly issue rules, interpretive guidelines, and general
statements of policy with respect to acts or practices that
violate appraisal independence in the provision of mortgage
lending services for a consumer credit transaction secured by
the principal dwelling of the consumer and mortgage brokerage
services for such a transaction, within the meaning of subsections
(a), (b), (c), (d), (e), (f), (h), and (i).
‘‘(2) INTERIM FINAL REGULATIONS.—The Board shall, for
purposes of this section, prescribe interim final regulations no
later than 90 days after the date of enactment of this section defining
with specificity acts or practices that violate appraisal
independence in the provision of mortgage lending services for
a consumer credit transaction secured by the principal dwelling
of the consumer or mortgage brokerage services for such a
transaction and defining any terms in this section or such regulations.
Rules prescribed by the Board under this paragraph
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shall be deemed to be rules prescribed by the agencies jointly
under paragraph (1).
‘‘(h) APPRAISAL REPORT PORTABILITY.—Consistent with the requirements
of this section, the Board, the Comptroller of the Currency,
the Federal Deposit Insurance Corporation, the National
Credit Union Administration Board, the Federal Housing Finance
Agency, and the Bureau may jointly issue regulations that address
the issue of appraisal report portability, including regulations that
ensure the portability of the appraisal report between lenders for a
consumer credit transaction secured by a 1–4 unit single family residence
that is the principal dwelling of the consumer, or mortgage
brokerage services for such a transaction.
‘‘(i) CUSTOMARY AND REASONABLE FEE.—
‘‘(1) IN GENERAL.—Lenders and their agents shall compensate
fee appraisers at a rate that is customary and reasonable
for appraisal services performed in the market area of the
property being appraised. Evidence for such fees may be established
by objective third-party information, such as government
agency fee schedules, academic studies, and independent private
sector surveys. Fee studies shall exclude assignments ordered
by known appraisal management companies.
‘‘(2) FEE APPRAISER DEFINITION.—For purposes of this section,
the term ‘fee appraiser’ means a person who is not an employee
of the mortgage loan originator or appraisal management
company engaging the appraiser and is—
‘‘(A) a State licensed or certified appraiser who receives
a fee for performing an appraisal and certifies that the appraisal
has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice; or
‘‘(B) a company not subject to the requirements of section
1124 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) that
utilizes the services of State licensed or certified appraisers
and receives a fee for performing appraisals in accordance
with the Uniform Standards of Professional Appraisal
Practice.
‘‘(3) EXCEPTION FOR COMPLEX ASSIGNMENTS.—In the case of
an appraisal involving a complex assignment, the customary
and reasonable fee may reflect the increased time, difficulty,
and scope of the work required for such an appraisal and include
an amount over and above the customary and reasonable
fee for non-complex assignments.
‘‘(j) SUNSET.—Effective on the date the interim final regulations
are promulgated pursuant to subsection (g), the Home Valuation
Code of Conduct announced by the Federal Housing Finance Agency
on December 23, 2008, shall have no force or effect.
‘‘(k) PENALTIES.—
‘‘(1) FIRST VIOLATION.—In addition to the enforcement provisions
referred to in section 130, each person who violates this
section shall forfeit and pay a civil penalty of not more than
$10,000 for each day any such violation continues.
‘‘(2) SUBSEQUENT VIOLATIONS.—In the case of any person
on whom a civil penalty has been imposed under paragraph (1),
paragraph (1) shall be applied by substituting ‘$20,000’ for
‘$10,000’ with respect to all subsequent violations.
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‘‘(3) ASSESSMENT.—The agency referred to in subsection (a)
or (c) of section 108 with respect to any person described in
paragraph (1) shall assess any penalty under this subsection to
which such person is subject.’’.
(b) CLERICAL AMENDMENT.—The table of sections for chapter 2
of the Truth in Lending Act is amended by inserting after the item
relating to section 129D (as added by section 1461(c)) the following
new items:
‘‘129E. Appraisal independence requirements.
‘‘129F. Requirements for prompt crediting of home loan payments.
‘‘129G. Requests for payoff amounts of home loan.
‘‘129H. Property appraisal requirements.’’.
(c) DEFERENCE.—Section 105 of the Truth in Lending Act (15
U.S.C. 1604) is amended by adding at the end the following:
‘‘(h) DEFERENCE.—Notwithstanding any power granted to any
Federal agency under this title, the deference that a court affords to
the Bureau with respect to a determination made by the Bureau relating
to the meaning or interpretation of any provision of this title,
other than section 129E or 129H, shall be applied as if the Bureau
were the only agency authorized to apply, enforce, interpret, or administer
the provisions of this title.’’.
(d) CONFORMING AMENDMENTS IN TITLE X NOT APPLICABLE TO
SECTIONS 129E AND 129H.—Notwithstanding section 1099A, the
term ‘‘Board’’ in sections 129E and 129H, as added by this subtitle,
shall not be substituted by the term ‘‘Bureau’’.
SEC. 1473. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE
OF FFIEC, APPRAISER INDEPENDENCE MONITORING, APPROVED
APPRAISER EDUCATION, APPRAISAL MANAGEMENT
COMPANIES, APPRAISER COMPLAINT HOTLINE,
AUTOMATED VALUATION MODELS, AND BROKER PRICE
OPINIONS.
(a) THRESHOLD LEVELS.—Section 1112(b) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3341(b)) is amended by inserting before the period the following: ‘‘,
and receives concurrence from the Bureau of Consumer Financial
Protection that such threshold level provides reasonable protection
for consumers who purchase 1–4 unit single-family residences’’.
(b) ANNUAL REPORT OF APPRAISAL SUBCOMMITTEE.—Section
1103(a) of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 3332(a)) is amended at the end by inserting
the following new paragraph:
‘‘(5) transmit an annual report to the Congress not later
than June 15 of each year that describes the manner in which
each function assigned to the Appraisal Subcommittee has been
carried out during the preceding year. The report shall also detail
the activities of the Appraisal Subcommittee, including the
results of all audits of State appraiser regulatory agencies, and
provide an accounting of disapproved actions and warnings
taken in the previous year, including a description of the conditions
causing the disapproval and actions taken to achieve compliance.’’.
(c) OPEN MEETINGS.—Section 1104(b) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3333(b)) is amended—
(1) by inserting ‘‘in public session after notice in the Federal
Register, but may close certain portions of these meetings
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related to personnel and review of preliminary State audit reports,’’
after ‘‘shall meet’’; and
(2) by adding after the final period the following: ‘‘The subject
matter discussed in any closed or executive session shall be
described in the Federal Register notice of the meeting.’’.
(d) REGULATIONS.—Section 1106 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) is
amended—
(1) by inserting ‘‘prescribe regulations in accordance with
chapter 5 of title 5, United States Code (commonly referred to
as the Administrative Procedures Act) after notice and opportunity
for comment,’’ after ‘‘hold hearings’’; and
(2) at the end by inserting ‘‘Any regulations prescribed by
the Appraisal Subcommittee shall (unless otherwise provided in
this title) be limited to the following functions: temporary practice,
national registry, information sharing, and enforcement.
For purposes of prescribing regulations, the Appraisal Subcommittee
shall establish an advisory committee of industry
participants, including appraisers, lenders, consumer advocates,
real estate agents, and government agencies, and hold
meetings as necessary to support the development of regulations.’’.
(e) APPRAISAL REVIEWS AND COMPLEX APPRAISALS.—
(1) SECTION 1110.—Section 1110 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3339) is amended—
(A) in paragraph (1), by striking ‘‘and’’;
(B) in paragraph (2), by striking the period at the end
and inserting ‘‘; and’’; and
(C) by inserting after paragraph (2) the following:
‘‘(3) that such appraisals shall be subject to appropriate review
for compliance with the Uniform Standards of Professional
Appraisal Practice.’’.
(2) SECTION 1113.—Section 1113 of the Financial Institutions
and Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3342) is amended by inserting before the period the following:
‘‘, where a complex 1- to 4-unit single family residential
appraisal means an appraisal for which the property to be appraised,
the form of ownership, the property characteristics, or
the market conditions are atypical’’.
(f) APPRAISAL MANAGEMENT SERVICES.—
(1) SUPERVISION OF THIRD-PARTY PROVIDERS OF APPRAISAL
MANAGEMENT SERVICES.—Section 1103(a) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3332(a)) (as previously amended by this section) is
amended—
(A) by amending paragraph (1) to read as follows:
‘‘(1) monitor the requirements established by States—
‘‘(A) for the certification and licensing of individuals
who are qualified to perform appraisals in connection with
federally related transactions, including a code of professional
responsibility; and
‘‘(B) for the registration and supervision of the operations
and activities of an appraisal management company;’’;
and
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(B) by adding at the end the following new paragraph:
‘‘(6) maintain a national registry of appraisal management
companies that either are registered with and subject to supervision
of a State appraiser certifying and licensing agency or
are operating subsidiaries of a Federally regulated financial institution.’’.
(2) APPRAISAL MANAGEMENT COMPANY MINIMUM REQUIREMENTS.—
Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is
amended by adding at the end the following new section (and
amending the table of contents accordingly):
‘‘SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM REQUIREMENTS.
‘‘(a) IN GENERAL.—The Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, the National Credit Union Administration
Board, the Federal Housing Finance Agency, and the Bureau of
Consumer Financial Protection shall jointly, by rule, establish minimum
requirements to be applied by a State in the registration of
appraisal management companies. Such requirements shall include
a requirement that such companies—
‘‘(1) register with and be subject to supervision by a State
appraiser certifying and licensing agency in each State in
which such company operates;
‘‘(2) verify that only licensed or certified appraisers are used
for federally related transactions;
‘‘(3) require that appraisals coordinated by an appraisal
management company comply with the Uniform Standards of
Professional Appraisal Practice; and
‘‘(4) require that appraisals are conducted independently
and free from inappropriate influence and coercion pursuant to
the appraisal independence standards established under section
129E of the Truth in Lending Act.
‘‘(b) RELATION TO STATE LAW.—Nothing in this section shall be
construed to prevent States from establishing requirements in addition
to any rules promulgated under subsection (a).
‘‘(c) FEDERALLY REGULATED FINANCIAL INSTITUTIONS.—The requirements
of subsection (a) shall apply to an appraisal management
company that is a subsidiary owned and controlled by a financial
institution and regulated by a Federal financial institution
regulatory agency. An appraisal management company that is a
subsidiary owned and controlled by a financial institution regulated
by a Federal financial institution regulatory agency shall not be required
to register with a State.
‘‘(d) REGISTRATION LIMITATIONS.—An appraisal management
company shall not be registered by a State or included on the national
registry if such company, in whole or in part, directly or indirectly,
is owned by any person who has had an appraiser license or
certificate refused, denied, cancelled, surrendered in lieu of revocation,
or revoked in any State. Additionally, each person that owns
more than 10 percent of an appraisal management company shall
be of good moral character, as determined by the State appraiser
certifying and licensing agency, and shall submit to a background
investigation carried out by the State appraiser certifying and licensing
agency.
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‘‘(e) REPORTING.—The Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, the National Credit Union Administration
Board, the Federal Housing Finance Agency, and the Bureau of
Consumer Financial Protection shall jointly promulgate regulations
for the reporting of the activities of appraisal management companies
to the Appraisal Subcommittee in determining the payment of
the annual registry fee.
‘‘(f) EFFECTIVE DATE.—
‘‘(1) IN GENERAL.—No appraisal management company may
perform services related to a federally related transaction in a
State after the date that is 36 months after the date on which
the regulations required to be prescribed under subsection (a)
are prescribed in final form unless such company is registered
with such State or subject to oversight by a Federal financial
institutions regulatory agency.
‘‘(2) EXTENSION OF EFFECTIVE DATE.—Subject to the approval
of the Council, the Appraisal Subcommittee may extend
by an additional 12 months the requirements for the registration
and supervision of appraisal management companies if it
makes a written finding that a State has made substantial
progress in establishing a State appraisal management company
registration and supervision system that appears to conform
with the provisions of this title.’’.
(3) STATE APPRAISER CERTIFYING AND LICENSING AGENCY
AUTHORITY.—Section 1117 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3346) is
amended by adding at the end the following: ‘‘The duties of
such agency may additionally include the registration and supervision
of appraisal management companies and the addition
of information about the appraisal management company to the
national registry.’’.
(4) APPRAISAL MANAGEMENT COMPANY DEFINITION.—Section
1121 of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 3350) is amended by adding
at the end the following:
‘‘(11) APPRAISAL MANAGEMENT COMPANY.—The term ‘appraisal
management company’ means, in connection with valuing
properties collateralizing mortgage loans or mortgages incorporated
into a securitization, any external third party authorized
either by a creditor of a consumer credit transaction secured
by a consumer’s principal dwelling or by an underwriter
of or other principal in the secondary mortgage markets, that
oversees a network or panel of more than 15 certified or licensed
appraisers in a State or 25 or more nationally within a given
year—
‘‘(A) to recruit, select, and retain appraisers;
‘‘(B) to contract with licensed and certified appraisers
to perform appraisal assignments;
‘‘(C) to manage the process of having an appraisal performed,
including providing administrative duties such as
receiving appraisal orders and appraisal reports, submitting
completed appraisal reports to creditors and underwriters,
collecting fees from creditors and underwriters for
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services provided, and reimbursing appraisers for services
performed; or
‘‘(D) to review and verify the work of appraisers.’’.
(g) STATE AGENCY REPORTING REQUIREMENT.—Section 1109(a)
of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 (12 U.S.C. 3338(a)) is amended—
(1) by striking ‘‘and’’ after the semicolon in paragraph (1);
(2) by redesignating paragraph (2) as paragraph (4); and
(3) by inserting after paragraph (1) the following new paragraphs:
‘‘(2) transmit reports on the issuance and renewal of licenses
and certifications, sanctions, disciplinary actions, license
and certification revocations, and license and certification suspensions
on a timely basis to the national registry of the Appraisal
Subcommittee;
‘‘(3) transmit reports on a timely basis of supervisory activities
involving appraisal management companies or other thirdparty
providers of appraisals and appraisal management services,
including investigations initiated and disciplinary actions
taken; and’’.
(h) REGISTRY FEES MODIFIED.—
(1) IN GENERAL.—Section 1109(a) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3338(a)) is amended—
(A) by amending paragraph (4) (as modified by section
1473(g)) to read as follows:
‘‘(4) collect—
‘‘(A) from such individuals who perform or seek to perform
appraisals in federally related transactions, an annual
registry fee of not more than $40, such fees to be
transmitted by the State agencies to the Council on an annual
basis; and
‘‘(B) from an appraisal management company that either
has registered with a State appraiser certifying and licensing
agency in accordance with this title or operates as
a subsidiary of a federally regulated financial institution,
an annual registry fee of—
‘‘(i) in the case of such a company that has been in
existence for more than a year, $25 multiplied by the
number of appraisers working for or contracting with
such company in such State during the previous year,
but where such $25 amount may be adjusted, up to a
maximum of $50, at the discretion of the Appraisal
Subcommittee, if necessary to carry out the Subcommittee’s
functions under this title; and
‘‘(ii) in the case of such a company that has not
been in existence for more than a year, $25 multiplied
by an appropriate number to be determined by the Appraisal
Subcommittee, and where such number will be
used for determining the fee of all such companies that
were not in existence for more than a year, but where
such $25 amount may be adjusted, up to a maximum
of $50, at the discretion of the Appraisal Subcommittee,
if necessary to carry out the Subcommittee’s
functions under this title.’’; and
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(B) by amending the matter following paragraph (4),
as redesignated, to read as follows:
‘‘Subject to the approval of the Council, the Appraisal Subcommittee
may adjust the dollar amount of registry fees under paragraph
(4)(A), up to a maximum of $80 per annum, as necessary to carry
out its functions under this title. The Appraisal Subcommittee shall
consider at least once every 5 years whether to adjust the dollar
amount of the registry fees to account for inflation. In implementing
any change in registry fees, the Appraisal Subcommittee shall provide
flexibility to the States for multi-year certifications and licenses
already in place, as well as a transition period to implement the
changes in registry fees. In establishing the amount of the annual
registry fee for an appraisal management company, the Appraisal
Subcommittee shall have the discretion to impose a minimum annual
registry fee for an appraisal management company to protect
against the under reporting of the number of appraisers working for
or contracted by the appraisal management company.’’.
(2) INCREMENTAL REVENUES.—Incremental revenues collected
pursuant to the increases required by this subsection
shall be placed in a separate account at the United States
Treasury, entitled the ‘‘Appraisal Subcommittee Account’’.
(i) GRANTS AND REPORTS.—Section 1109(b) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3338(b)) is amended—
(1) by striking ‘‘and’’ after the semicolon in paragraph (3);
(2) by striking the period at the end of paragraph (4) and
inserting a semicolon;
(3) by adding at the end the following new paragraphs:
‘‘(5) to make grants to State appraiser certifying and licensing
agencies, in accordance with policies to be developed by the
Appraisal Subcommittee, to support the efforts of such agencies
to comply with this title, including—
‘‘(A) the complaint process, complaint investigations,
and appraiser enforcement activities of such agencies; and
‘‘(B) the submission of data on State licensed and certified
appraisers and appraisal management companies to
the National appraisal registry, including information affirming
that the appraiser or appraisal management company
meets the required qualification criteria and formal
and informal disciplinary actions; and
‘‘(6) to report to all State appraiser certifying and licensing
agencies when a license or certification is surrendered, revoked,
or suspended.’’.
Obligations authorized under this subsection may not exceed 75 percent
of the fiscal year total of incremental increase in fees collected
and deposited in the ‘‘Appraisal Subcommittee Account’’ pursuant to
subsection (h).
(j) CRITERIA.—Section 1116 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) is
amended—
(1) in subsection (c), by inserting ‘‘whose criteria for the licensing
of a real estate appraiser currently meet or exceed the
minimum criteria issued by the Appraisal Qualifications Board
of The Appraisal Foundation for the licensing of real estate appraisers’’
before the period at the end; and
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(2) by striking subsection (e) and inserting the following
new subsection:
‘‘(e) MINIMUM QUALIFICATION REQUIREMENTS.—Any requirements
established for individuals in the position of ‘Trainee Appraiser’
and ‘Supervisory Appraiser’ shall meet or exceed the minimum
qualification requirements of the Appraiser Qualifications
Board of The Appraisal Foundation. The Appraisal Subcommittee
shall have the authority to enforce these requirements.’’.
(k) MONITORING OF STATE APPRAISER CERTIFYING AND LICENSING
AGENCIES.—Section 1118 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3347) is amended—
(1) by amending subsection (a) to read as follows:
‘‘(a) IN GENERAL.—The Appraisal Subcommittee shall monitor
each State appraiser certifying and licensing agency for the purposes
of determining whether such agency—
‘‘(1) has policies, practices, funding, staffing, and procedures
that are consistent with this title;
‘‘(2) processes complaints and completes investigations in a
reasonable time period;
‘‘(3) appropriately disciplines sanctioned appraisers and appraisal
management companies;
‘‘(4) maintains an effective regulatory program; and
‘‘(5) reports complaints and disciplinary actions on a timely
basis to the national registries on appraisers and appraisal
management companies maintained by the Appraisal Subcommittee.
The Appraisal Subcommittee shall have the authority to remove a
State licensed or certified appraiser or a registered appraisal management
company from a national registry on an interim basis, not
to exceed 90 days, pending State agency action on licensing, certification,
registration, and disciplinary proceedings. The Appraisal
Subcommittee and all agencies, instrumentalities, and Federally
recognized entities under this title shall not recognize appraiser certifications
and licenses from States whose appraisal policies, practices,
funding, staffing, or procedures are found to be inconsistent
with this title. The Appraisal Subcommittee shall have the authority
to impose sanctions, as described in this section, against a State
agency that fails to have an effective appraiser regulatory program.
In determining whether such a program is effective, the Appraisal
Subcommittee shall include an analysis of the licensing and certification
of appraisers, the registration of appraisal management companies,
the issuance of temporary licenses and certifications for appraisers,
the receiving and tracking of submitted complaints against
appraisers and appraisal management companies, the investigation
of complaints, and enforcement actions against appraisers and appraisal
management companies. The Appraisal Subcommittee shall
have the authority to impose interim actions and suspensions
against a State agency as an alternative to, or in advance of, the
derecognition of a State agency.’’.
(2) in subsection (b)(2), by inserting after ‘‘authority’’ the
following: ‘‘or sufficient funding’’.
(l) RECIPROCITY.—Subsection (b) of section 1122 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3351(b)) is amended to read as follows:
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‘‘(b) RECIPROCITY.—Notwithstanding any other provisions of
this title, a federally related transaction shall not be appraised by
a certified or licensed appraiser unless the State appraiser certifying
or licensing agency of the State certifying or licensing such appraiser
has in place a policy of issuing a reciprocal certification or
license for an individual from another State when—
‘‘(1) the appraiser licensing and certification program of
such other State is in compliance with the provisions of this
title; and
‘‘(2) the appraiser holds a valid certification from a State
whose requirements for certification or licensing meet or exceed
the licensure standards established by the State where an individual
seeks appraisal licensure.’’.
(m) CONSIDERATION OF PROFESSIONAL APPRAISAL DESIGNATIONS.—
Section 1122(d) of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 3351(d)) is amended
by striking ‘‘shall not exclude’’ and all that follows through the end
of the subsection and inserting the following: ‘‘may include education
achieved, experience, sample appraisals, and references from
prior clients. Membership in a nationally recognized professional
appraisal organization may be a criteria considered, though lack of
membership therein shall not be the sole bar against consideration
for an assignment under these criteria.’’.
(n) APPRAISER INDEPENDENCE.—Section 1122 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3351) is amended by adding at the end the following new
subsection:
‘‘(g) APPRAISER INDEPENDENCE MONITORING.—The Appraisal
Subcommittee shall monitor each State appraiser certifying and licensing
agency for the purpose of determining whether such agency’s
policies, practices, and procedures are consistent with the purposes
of maintaining appraiser independence and whether such State has
adopted and maintains effective laws, regulations, and policies
aimed at maintaining appraiser independence.’’.
(o) APPRAISER EDUCATION.—Section 1122 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3351) is amended by inserting after subsection (g) (as added by subsection
(l) of this section) the following new subsection:
‘‘(h) APPROVED EDUCATION.—The Appraisal Subcommittee shall
encourage the States to accept courses approved by the Appraiser
Qualification Board’s Course Approval Program.’’.
(p) APPRAISAL COMPLAINT HOTLINE.—Section 1122 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989
(12 U.S.C. 3351), as amended by this section, is amended by adding
at the end the following new subsection:
‘‘(i) APPRAISAL COMPLAINT NATIONAL HOTLINE.—If, 6 months
after the date of the enactment of this subsection, the Appraisal
Subcommittee determines that no national hotline exists to receive
complaints of non-compliance with appraisal independence standards
and Uniform Standards of Professional Appraisal Practice, including
complaints from appraisers, individuals, or other entities
concerning the improper influencing or attempted improper influencing
of appraisers or the appraisal process, the Appraisal Subcommittee
shall establish and operate such a national hotline,
which shall include a toll-free telephone number and an email ad-
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dress. If the Appraisal Subcommittee operates such a national hotline,
the Appraisal Subcommittee shall refer complaints for further
action to appropriate governmental bodies, including a State appraiser
certifying and licensing agency, a financial institution regulator,
or other appropriate legal authorities. For complaints referred
to State appraiser certifying and licensing agencies or to Federal
regulators, the Appraisal Subcommittee shall have the authority to
follow up such complaint referrals in order to determine the status
of the resolution of the complaint.’’.
(q) AUTOMATED VALUATION MODELS.—Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3331 et seq.), as amended by this section, is amended by
adding at the end the following new section (and amending the
table of contents accordingly):
‘‘SEC. 1125. AUTOMATED VALUATION MODELS USED TO ESTIMATE COLLATERAL
VALUE FOR MORTGAGE LENDING PURPOSES.
‘‘(a) IN GENERAL.—Automated valuation models shall adhere to
quality control standards designed to—
‘‘(1) ensure a high level of confidence in the estimates produced
by automated valuation models;
‘‘(2) protect against the manipulation of data;
‘‘(3) seek to avoid conflicts of interest;
‘‘(4) require random sample testing and reviews; and
‘‘(5) account for any other such factor that the agencies listed
in subsection (b) determine to be appropriate.
‘‘(b) ADOPTION OF REGULATIONS.—The Board, the Comptroller
of the Currency, the Federal Deposit Insurance Corporation, the National
Credit Union Administration Board, the Federal Housing Finance
Agency, and the Bureau of Consumer Financial Protection, in
consultation with the staff of the Appraisal Subcommittee and the
Appraisal Standards Board of the Appraisal Foundation, shall promulgate
regulations to implement the quality control standards required
under this section.
‘‘(c) ENFORCEMENT.—Compliance with regulations issued under
this subsection shall be enforced by—
‘‘(1) with respect to a financial institution, or subsidiary
owned and controlled by a financial institution and regulated
by a Federal financial institution regulatory agency, the Federal
financial institution regulatory agency that acts as the primary
Federal supervisor of such financial institution or subsidiary;
and
‘‘(2) with respect to other participants in the market for appraisals
of 1-to-4 unit single family residential real estate, the
Federal Trade Commission, the Bureau of Consumer Financial
Protection, and a State attorney general.
‘‘(d) AUTOMATED VALUATION MODEL DEFINED.—For purposes of
this section, the term ‘automated valuation model’ means any computerized
model used by mortgage originators and secondary market
issuers to determine the collateral worth of a mortgage secured
by a consumer’s principal dwelling.’’.
(r) BROKER PRICE OPINIONS.—Title XI of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3331 et seq.), as amended by this section, is amended by adding at
the end the following new section (and amending the table of contents
accordingly):
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‘‘SEC. 1126. BROKER PRICE OPINIONS.
‘‘(a) GENERAL PROHIBITION.—In conjunction with the purchase
of a consumer’s principal dwelling, broker price opinions may not
be used as the primary basis to determine the value of a piece of
property for the purpose of a loan origination of a residential mortgage
loan secured by such piece of property.
‘‘(b) BROKER PRICE OPINION DEFINED.—For purposes of this
section, the term ‘broker price opinion’ means an estimate prepared
by a real estate broker, agent, or sales person that details the probable
selling price of a particular piece of real estate property and
provides a varying level of detail about the property’s condition,
market, and neighborhood, and information on comparable sales,
but does not include an automated valuation model, as defined in
section 1125(c).’’.
(s) AMENDMENTS TO APPRAISAL SUBCOMMITTEE.—Section 1011
of the Federal Financial Institutions Examination Council Act of
1978 (12 U.S.C. 3310) is amended—
(1) in the first sentence, by adding before the period the following:
‘‘, the Bureau of Consumer Financial Protection, and
the Federal Housing Finance Agency’’; and
(2) by inserting at the end the following: ‘‘At all times at
least one member of the Appraisal Subcommittee shall have
demonstrated knowledge and competence through licensure, certification,
or professional designation within the appraisal profession.’’.
(t) TECHNICAL CORRECTIONS.—
(1) Section 1119(a)(2) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(a)(2))
is amended by striking ‘‘council,’’ and inserting ‘‘Council,’’.
(2) Section 1121(6) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is
amended by striking ‘‘Corporations,’’ and inserting ‘‘Corporation,’’.
(3) Section 1121(8) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is
amended by striking ‘‘council’’ and inserting ‘‘Council’’.
(4) Section 1122 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 3351) is
amended—
(A) in subsection (a)(1) by moving the left margin of
subparagraphs (A), (B), and (C) 2 ems to the right; and
(B) in subsection (c)—
(i) by striking ‘‘Federal Financial Institutions Examination
Council’’ and inserting ‘‘Financial Institutions
Examination Council’’; and
(ii) by striking ‘‘the council’s functions’’ and inserting
‘‘the Council’s functions’’.
SEC. 1474. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.
Subsection (e) of section 701 of the Equal Credit Opportunity
Act (15 U.S.C. 1691) is amended to read as follows:
‘‘(e) COPIES FURNISHED TO APPLICANTS.—
‘‘(1) IN GENERAL.—Each creditor shall furnish to an applicant
a copy of any and all written appraisals and valuations
developed in connection with the applicant’s application for a
loan that is secured or would have been secured by a first lien
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on a dwelling promptly upon completion, but in no case later
than 3 days prior to the closing of the loan, whether the creditor
grants or denies the applicant’s request for credit or the application
is incomplete or withdrawn.
‘‘(2) WAIVER.—The applicant may waive the 3 day requirement
provided for in paragraph (1), except where otherwise required
in law.
‘‘(3) REIMBURSEMENT.—The applicant may be required to
pay a reasonable fee to reimburse the creditor for the cost of the
appraisal, except where otherwise required in law.
‘‘(4) FREE COPY.—Notwithstanding paragraph (3), the creditor
shall provide a copy of each written appraisal or valuation
at no additional cost to the applicant.
‘‘(5) NOTIFICATION TO APPLICANTS.—At the time of application,
the creditor shall notify an applicant in writing of the
right to receive a copy of each written appraisal and valuation
under this subsection.
‘‘(6) VALUATION DEFINED.—For purposes of this subsection,
the term ‘valuation’ shall include any estimate of the value of
a dwelling developed in connection with a creditor’s decision to
provide credit, including those values developed pursuant to a
policy of a government sponsored enterprise or by an automated
valuation model, a broker price opinion, or other methodology
or mechanism.’’.
SEC. 1475. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974
AMENDMENT RELATING TO CERTAIN APPRAISAL FEES.
Section 4 of the Real Estate Settlement Procedures Act of 1974
is amended by adding at the end the following new subsection:
‘‘(c) The standard form described in subsection (a) may include,
in the case of an appraisal coordinated by an appraisal management
company (as such term is defined in section 1121(11) of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 3350(11))), a clear disclosure of—
‘‘(1) the fee paid directly to the appraiser by such company;
and
‘‘(2) the administration fee charged by such company.’’.
SEC. 1476. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF VARIOUS
APPRAISAL METHODS, VALUATION MODELS AND
DISTRIBUTIONS CHANNELS, AND ON THE HOME VALUATION
CODE OF CONDUCT AND THE APPRAISAL SUBCOMMITTEE.
(a) IN GENERAL.—The Government Accountability Office shall
conduct a study on—
(1) the effectiveness and impact of—
(A) appraisal methods, including the cost approach, the
comparative sales approach, the income approach, and others
that may be available;
(B) appraisal valuation models, including licensed and
certified appraisals, broker-priced opinions, and automated
valuation models; and
(C) appraisal distribution channels, including appraisal
management companies, independent appraisal operations
within mortgage originators, and fee-for-service
appraisers;
(2) the Home Valuation Code of Conduct; and
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(3) the Appraisal Subcommittee’s functions pursuant to title
XI of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
(b) STUDY.—Not later than—
(1) 12 months after the date of enactment of this Act, the
Government Accountability Office shall submit a study to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives; and
(2) 90 days after the date of enactment of this Act, the Government
Accountability Office shall provide a report on the status
of the study and any preliminary findings to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives.
(c) CONTENT OF STUDY.—The study required by this section
shall include an examination of the following:
(1) APPRAISAL APPROACHES, VALUATION MODELS, AND DISTRIBUTION
CHANNELS.—
(A) The prevalence, alone or in combination, of certain
appraisal approaches, models, and channels in purchasemoney
and refinance mortgage transactions.
(B) The accuracy of these approaches, models, and
channels in assessing the property as collateral.
(C) Whether and how these approaches, models, and
channels contributed to price speculation during the previous
cycle.
(D) The costs to consumers of these approaches, models,
and channels.
(E) The disclosure of fees to consumers in the appraisal
process.
(F) To what extent the usage of these approaches, models,
and channels may be influenced by a conflict of interest
between the mortgage lender and the appraiser and the
mechanism by which the lender selects and compensates
the appraiser.
(G) The suitability of these approaches, models, and
channels in rural versus urban areas.
(2) HOME VALUATION CODE OF CONDUCT (HVCC).—
(A) How the HVCC affects mortgage lenders’ selection
of appraisers.
(B) How the HVCC affects State regulation of appraisers
and appraisal distribution channels.
(C) How the HVCC affects the quality and cost of appraisals
and the length of time to obtain an appraisal.
(D) How the HVCC affects mortgage brokers, small
businesses, and consumers.
(d) ADDITIONAL STUDY REQUIRED.—
(1) IN GENERAL.—Not later than 18 months after the date
of enactment of this Act, the Government Accountability Office
shall submit a study to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives.
(2) CONTENT OF ADDITIONAL STUDY.—The study required
under paragraph (1) shall include—
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(A) an examination of—
(i) the Appraisal Subcommittee’s ability to monitor
and enforce State and Federal certification requirements
and standards, including by providing a summary
with a statistical breakdown of enforcement actions
taken during the last 10 years;
(ii) whether existing Federal financial institutions
regulatory agency exemptions on appraisals for federally
related transactions needs to be revised; and
(iii) whether new means of data collection, such as
the establishment of a national repository, would benefit
the Appraisal Subcommittee’s ability to perform its
functions; and
(B) recommendations from this examination for administrative
and legislative action at the Federal and State
level.
Subtitle G—
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August 07, 2010

Optimizing restaurant-table configurations: specifying combinable tables

http://restaurantappraiser.net/case_studies

 

Optimizing restaurant-table configurations: specifying combinable tables.

By Gary M. Thompson | Feb, 2003

Cornell Hotel & Restaurant Administration Quarterly

Having the right-size tables in a position to be combined with other tables to serve large parties can yield additional revenue at

virtually no added cost.

This article focuses on restaurants with walk-in customers (no reservations are taken), where a host or hostess seats the

parties and where parties are seated separately. Restaurants of this kind are common in the United States (e.g., TGIF, Chili's,

Applebee's). Specifically, this article examines the issue of which tables should be combinable with which other tables.

"Combinability" is the ability to create a larger table from adjacent smaller tables. For example, combinability would allow two

adjacent 4-top tables to be combined to seat parties of up eight people. (1) In an earlier investigation I found that, in many

cases, having tables dedicated to specific party sizes was preferable to having combinable tables. (2) The reason for this was

that placing tables on hold, while waiting for customers to depart an adjacent

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August 05, 2010

probabilistic argumentation systems

probabilistic argumentation systems

"The most PROBABLE Price? ? ?

"The idea of combining classical logic with probability theory leads to a more
general theory of probabilistic argumentation systems [3, 22]. This theory
is an alternative approach for non-monotonic reasoning under uncertainty.
It allows to judge open questions (hypotheses) about the unknown or future
world in the light of the given knowledge. From a qualitative point of view,
the problem is to derive arguments in favor and against the hypothesis of interest.
An argument can be seen as a chain of possible events that makes the
hypothesis true. Finally, a quantitative judgement of the situation is obtained
by considering probabilities that the arguments are valid. The credibility of a
hypothesis can then be measured by the total probability that it is supported
by arguments. The resulting degree of support corresponds to (normalized)
belief in the theory of evidence [35, 51, 55, 58]. A quantitative judgement is
often more useful and can help to decide whether a hypothesis can be accepted,
rejected, or whether the available knowledge does not permit to decide."

6 minutes ago

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August 03, 2010

2010 USPAP Update Unedited

Barry J. Shea, Member, Appraisal Standards Board
Roberta Ouellette, General Counsel North Carolina Appraisal Board
Barry J. Shea, Speaker
Barry J Shea is a state certified residential appraiser who has been appraising real property in central New Hampshire since 1987. He has a Master of Science degree in Business Education from Southern New Hampshire University. He holds a designation from a professional appraiser organization that is a sponsor of The Appraisal Foundation.

Shea sat on the New Hampshire Real Estate Appraiser Board from 2000 to 2005, serving as chair for two years. He has worked with The Appraisal Foundation as a representative to both the Education Council of Appraisal Foundation Sponsors (ECAFS) and The Appraisal Foundation Advisory Council (TAFAC). He is currently a member of Appraisal Standards Board of The Appraisal Foundation.

He has been teaching both qualifying education and continuing education programs for appraisers since 1994. In addition, he has developed several appraisal courses and seminars.

Roberta Ouellette, Moderator
Roberta Ouellette is an assistant attorney general for the State of North Carolina and has served as the full time general counsel to the North Carolina Appraisal Board since 1995. She prosecutes disciplinary actions in front of the Board, and represents the Board in appeals to Superior Court and the Court of Appeals. Roberta received her undergraduate degree from the University of New Hampshire and her Juris Doctor from the University of Maine School of Law. She and her husband have three children and 8 grandchildren who keep them on the go.
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August 02, 2010

While most expert witnesses have heard about the United States Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals, few really understand what the decision means. A proper understanding of Daubert can reduce the odds that your testimony will be excluded from trial.

On Tuesday, August 10, 2010, at 3 p.m. EDT, attorneys Craig R. Heidemann and Nathan A. Duncan will present a professional development webinar, Demystifying Daubert: Daubert’s Effect on Your Work as an Expert Witness, for all experts. During this program, Craig and Nathan will discuss the following:
  • Court decisions leading to Daubert
  • What the court really decided in Daubert
  • Important decisions after Daubert
  • How courts routinely apply the Daubert standard
  • How to respond to a Daubert Challenge and inform future clients of the Daubert Challenge
To register for this event, please click here. There is a registration fee of $37.50.

Participants are strongly encouraged to submit questions to Matt Hyde in advance of the webinar. The presenters will attempt to answer your questions during the webinar.

Expert Webinar Series
In January 2010, The TASA Group, Inc., in conjunction with attorneys Craig Heidemann and Nathan Duncan, launched a webinar series for experts. To view the archived recordings of previous webinars from the series, please click on the program title below:
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Forecasted Liquidation Value of property at REO =

NPV Test

􀂾 The formula used to estimate the cost of foreclosure is:

Description of the formula terms:

Liquidation value – Interest Adv/Accrual – Corporate Advances – Escrow

Advances – Future Cost to Collect + MI Recovery

 

Forecasted Liquidation Value of property at REO =

Current Property Value * (1 - Forecasted Depreciation - “REO Stigma” Discount –

Selling Costs)

FDIC Loan Modification Program Page 13

􀂾Re-default rate is estimated per historical re-default experience for other modification programs and

a program specific projection.

􀂾NPV of discounted payments is the net present value of the adjusted UPB (cash outflow) and the

modified payment stream (cash inflow) discounted at the Freddie Mac Weekly Survey rate as of the

week of the modification offer. An NPV example is provided in the Appendix.

􀂾REO disposition value (see above).

􀂾Additional costs include 9 additional months of accrued interest, taxes, and insurance payments

plus additional forecasted home price depreciation, as applicable.33

Currently, the Case-Shiller forecast provided by Moody’s Economy.com projects that home prices

will reach their trough in about one year from today, which also is equivalent to the base case

timetable for REO disposition in the NPV Tool. This means that delaying foreclosure will not lead to

further home price declines at REO disposition for most geographical areas.

Loan Value = (1 – Redefault Rate) x NPV of Discounted Payments + Redefault Rate x (REO

Disposition Value + Additional Accrued Costs)

NPV Test (Continued)

􀂾 The formula used to estimate the cost of modification is:

Description of the formula terms:

FDIC Loan Modification Program Page 14

In Addition to Updated Liquidation Value, a Servicer must Formally Backtest Servicer and/or

Portfolio Specific Assumptions and Regularly Update Assumptions Based on Industry

Standards

1. Forecasted Depreciation (industry standard)

• Updated monthly to incorporate latest home price data.

2. Cure Rates (servicer and/or portfolio specific)

• Updated quarterly and based on 12 month history (to adjust for current credit environment).

Suggested cure factors include the current delinquency status of the loan, combined LTV,

borrower FICO, and original income documentation.

3. REO Stigma (servicer and/or portfolio specific)

• Updated monthly to incorporate latest experience by region.

4. Re-default Rate (servicer and/or portfolio specific)

• Based on past re-default experience for other modification programs and a program specific

projection. The servicer should carefully monitor and incorporate the program’s actual

re-default rate.

5. Discount Rate (both industry standard and servicer and/or portfolio specific)

• Freddie Mac Weekly Survey rate as of the week of the modification offer is used to discount the

modified payment cashflow. A required return methodology is used to discount the estimated

foreclosure value.

6. Prepayment rate (servicer and/or portfolio specific)

• The model assumes a voluntary prepayment rate of zero.

http://www.harriscompanyrec.com/FDICLoanMod.pdf

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August 01, 2010

The Appraisers Research Foundation (TARF)

The Appraisers Research Foundation (TARF) is pleased to announce the following publication: "A Guide to the Valuation of Recreational Land With Trout Streams: An Analysis of Wisconsin's Driftless Region."  This appraiser researched publication is available on our website and can be downloaded in PDF format.

In addition, the Green Guide study that describes energy efficiency products and techniques for residential housing is also available. 

The Green Guide can also be downloaded in PDF format.

Also attached are two press releases, one for the Trout Stream study and another one which explains research grant funding available from TARF. 

Please contact me if you have any questions

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