BILL ANALYSIS Senate Research Center H.B. 1939 87R12899 SCL-F By: Smith (Creighton) Business & Commerce 5/7/2021 Engrossed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Texas appraisers have been faced with lawsuits alleging defects in appraisals performed for mortgage transactions during the 2005-2008 "real estate bubble" that have now gone into default. Under current law, the filing limit does not commence until the claimant discovers, or should have discovered, the alleged defect, resulting in an almost infinite statute of limitations for claims against appraisers. The Federal Uniform Standards of Professional Appraisal Practice only requires that an appraiser retain a workfile for the later of five years after the appraisal was prepared or two years after final disposition of any judicial proceeding in which with the appraiser provided testimony. Because this work could have been performed many years ago, the appraiser often cannot adequately defend themselves. H.B. 1939 would establish a statutory limitation on the time in which litigation against real estate appraisers can be filed following the date the service was performed. H.B. 1939 amends current law relating to the limitations periods for certain suits against real estate appraisers and appraisal firms. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter A, Chapter 16, Civil Practice and Remedies Code, by adding Section 16.013, as follows: Sec. 16.013. REAL ESTATE APPRAISERS AND APPRAISAL FIRMS. (a) Defines "appraisal," "appraisal review," "real estate appraisal firm," and "real estate appraiser." (b) Requires a person, except for an action for fraud or breach of contract, to bring suit for damages or other relief arising from an appraisal or appraisal review conducted by a real estate appraiser or appraisal firm not later than the earlier of: (1) two years after the day the person knew or should have known the facts on which the action is based; or (2) five years after the day the appraisal or appraisal review was completed. SECTION 2. Makes application of this Act prospective. SECTION 3. Effective date: September 1, 2021.
BILL ANALYSIS
Senate Research Center H.B. 1939
87R12899 SCL-F By: Smith (Creighton)
Business & Commerce
5/7/2021
Engrossed
Senate Research Center
H.B. 1939
87R12899 SCL-F
By: Smith (Creighton)
Business & Commerce
5/7/2021
Engrossed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Texas appraisers have been faced with lawsuits alleging defects in appraisals performed for mortgage transactions during the 2005-2008 "real estate bubble" that have now gone into default. Under current law, the filing limit does not commence until the claimant discovers, or should have discovered, the alleged defect, resulting in an almost infinite statute of limitations for claims against appraisers.
The Federal Uniform Standards of Professional Appraisal Practice only requires that an appraiser retain a workfile for the later of five years after the appraisal was prepared or two years after final disposition of any judicial proceeding in which with the appraiser provided testimony. Because this work could have been performed many years ago, the appraiser often cannot adequately defend themselves.
H.B. 1939 would establish a statutory limitation on the time in which litigation against real estate appraisers can be filed following the date the service was performed.
H.B. 1939 amends current law relating to the limitations periods for certain suits against real estate appraisers and appraisal firms.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter A, Chapter 16, Civil Practice and Remedies Code, by adding Section 16.013, as follows:
Sec. 16.013. REAL ESTATE APPRAISERS AND APPRAISAL FIRMS. (a) Defines "appraisal," "appraisal review," "real estate appraisal firm," and "real estate appraiser."
(b) Requires a person, except for an action for fraud or breach of contract, to bring suit for damages or other relief arising from an appraisal or appraisal review conducted by a real estate appraiser or appraisal firm not later than the earlier of:
(1) two years after the day the person knew or should have known the facts on which the action is based; or
(2) five years after the day the appraisal or appraisal review was completed.
SECTION 2. Makes application of this Act prospective.
SECTION 3. Effective date: September 1, 2021.