by Devon Carter, MAI, Committee Chair
On a national level, Congress has put together a tax reform bill, expected to be signed by President Trump. There will be some impact to the industry due to reduction of the property tax and mortgage interest deductions for mortgages over $750,000; however, these should be at least partially offset by the reduction of the corporate income tax rate from around 35% to about 21%. How the reforms could affect valuation issues is yet to be seen.
On the state level, a bill has been introduced to limit the time appraisers are liable for disciplinary and/or administrative actions. The bill amends the existing statutes in the following manners: First, action recover potential damages from an appraiser must occur within one year of the discovery of the error or omission. Second, action(s) must occur within five years of the date of the report.
Administrative complaints in regard to an appraiser’s alleged violation(s) of section 475.624, as related to an appraisal, must be filed within three years of the completion date of the appraisal, again within one year of the discovery.
Currently, actions can begin up to two years of a discovery and there are currently actions being filed on appraisals over ten years old. Many of these suits have nothing to do with valuation, rather, a minor USPAP violation is being used by companies which purchased the right to sue for pennies on the dollar.
This bill would be beneficial to our industry, especially considering language some lenders are requiring, which provides a seemingly open-ended issue of liability to appraisers. There may be some minor changes before the bill is voted on; however, there is strong support by Florida AI chapters for this legislation. If passed, the changes would take effect July 1, 2018.
Another bill making its way through Tallahassee proposes to extend portability of assessment for homeowners who relocate, from two to three years. This benefits homeowners in that sellers who transact near the end of a calendar year essentially have the portability window reduced due to the January 1 assessment dates. This bill reinforces the intent of the original statue to allow at least two years to purchase a new homestead property.
Another bill clarifies the timing of impact fees during the development cycle. In recent years, some localities have started collecting these fees earlier in the development process. This potentially creates burdens for the developer as impact fees may be assessed even prior to the issuance of a building permit. As summarized, this bill would mandate that assessment fees may not be collected by local governments until a building permit is issued. The latter two bills should have little effect on valuation issues.
On a more personal note, 2018 is quickly approaching. As the incoming chair of the Government Relations Committee, I will do my best to keep everyone informed of what is going on legislatively. If there are local issues that should be made known to a wider audience, please feel free to forward any information to me. I also hope the new year brings great opportunities to everyone.
Useful Links:Click Here for House Bills 887 and 517 (Posted November 2012)