D.C. Real Estate Appraisal Management Companies Have to Register and Get a Bond
The District of Columbia has recently introduced emergency legislation which aims to regulate the activities of appraisal management companies on its territory, thus ensuring its high professional standards.
The Appraisal Management Company Regulation Emergency Act of 2019 creates a registration procedure for such businesses, and has now been renewed. Legislators in D.C. are working on a permanent law based on the Act, which is expected in the coming months.
The emergency regulations establish the criteria that applicants need to fulfill in order to be allowed to operate legally. One of the most important requirements is to provide an appraisal management company bond. It serves as an extra guarantee that appraisal management companies will follow the law.
In the sections below, you can find detailed information about the new process that appraisal management companies have to fulfill, as well as about the bonding requirement.
The new registration requirements
In order to ensure the legal compliance of real estate appraisal management companies (AMCs), the District of Columbia enacted emergency rules for this type of companies. On July 31, 2019, Mayor Muriel Bowser signed the above-mentioned act. It sets definitions of what an AMC is, what activities it can conduct, and what requirements it should fulfill.
The authority in charge of overseeing the activities of AMCs is the Department of Insurance, Securities and Banking. It requires companies to apply for an official registration. This entails satisfying a list of requirements, which guarantee applicants’ suitability for conducting real estate appraisal management services.
In order to qualify for the registration, you need to meet the following criteria:
- Designation of a controlling person
- Proof that the controlling person has been authorized to apply in the name of the entity
- Personal information for the designated controlling person
- Business entity information
- A copy of the most recent audited statement of financial condition
- Application fee of $1,300
- $25,000 surety bond
All documents have to be sent to:
Department of Insurance, Securities and Banking, Banking Bureau
P.O. Box 96378, Washington, DC 20090- 6378
Upon receiving the full set of paperwork of the applicant, the Department assesses the candidature. If all conditions are met, it provides the registration. It is illegal to conduct or offer appraisal management services without proper registration. You have to renew your registration yearly before December 31st.
The D.C. appraisal management company bond
Providing a surety bond is one of the indispensable criteria that AMCs have to satisfy. The amount set by the authorities is $25,000. The purpose of the bond is to ensure that registered AMCs will adhere to the law in their operations. Thus, it safeguards the interests of the general public against misuse and fraud.
In order to get bonded, you have to pay a small percentage of the required bond amount. It is called the bond premium, which depends on the strength of your personal and business finances. The main factors that shape the price include personal credit score, company finances, and showcased assets and liquidity.
Applicants with stable finances typically get rates between 0.75% and 5%, which means between $187 and $1,250.
Do you have more questions about the new D.C. requirements for appraisal management companies? Don’t hesitate to contact us at 877.514.5146.
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