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**Registration details coming soon**
Possible merger of the Northern California Chapter & The Sacramento Sierra Chapter FAQ
California Gov. Gavin Newsom on Sept. 4 signed AB 2257, legislation that clarifies how the state’s employment laws apply to services provided by state-licensed and state-certified real estate appraisers, allowing them to work as independent contractors.
Last year, the state enacted AB 5 which codified many of the findings of the California Supreme Court in the Dynamex case, including the “ABC” test. Pursuant to Dynamex and the provisions of AB 5, the “ABC” test is to be used to determine if workers are employees or independent contractors for purposes of the state’s Labor Code and Unemployment Insurance Code and the wage orders of the Industrial Welfare Commission. Under the “ABC” test, a person who provides labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates: (A) the person is free from the control and direction of the hiring entity in connection with the performance of the work; (B) the person performs work that is outside the usual course of the hiring entity’s business; and (C) the person is customarily engaged in an independently established trade, occupation or business.
Prior to the Dynamex decision, the employment relationship between a contracting entity and a service provider was determined using a multifactor test commonly known as the “Borello” test. Many appraiser/client contractual relationships, including some between appraisers, appraisal firms and appraisal management companies, satisfied each prong of the Borello test, and the employment relationship was defined as that of an independent contractor.
However, appraisers in California expressed concern that the “ABC” test, specifically the “B” prong, meant they would be considered employees of some clients, specifically appraisal firms and AMCs. Appraisers, appraisal firms and AMCs were worried that it would be determined that they were in the business of providing appraisal services, to the extent that appraisers would not be performing work “outside the usual course of the hiring entity’s business.” In contrast, Dynamex and AB 5 did not affect the independent contractor nature of the relationships between appraisers and other client groups, such as private businesses and individuals, direct engagement lenders, government agencies and law firms.
The new legislation clarifies that contractual services provided by licensed and certified appraisers are “professional services” for which the Borello test, rather than the ABC test, would apply. It requires six factors to be satisfied before the Borello test can be utilized : 1) the appraiser must maintain a separate business location (a home office is permitted); 2) the appraiser must have all appropriate business licenses and tax registrations; 3) the appraiser must have the ability to set or negotiate their own rates; 4) the appraiser must have the ability to set their own hours; 5) the appraiser must provide services to other entities or hold themselves out as being available to have other customers; and 6) the appraiser must be permitted to exercise discretion and independent judgement in the performance of the services. If all six factors are satisfied, then the Borello test could be used to determine whether the business relationship is that of an independent contractor or employee
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ABOUT THE APPRAISAL INSTITUTE
The Appraisal Institute is a global association of real estate appraisers, with nearly 23,000 valuation professionals in almost 60 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Appraisal Institute professionals benefit from an array of education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS, and AI-RRS designations.
THE SACRAMENTO SIERRA CHAPTER MISSION
Our mission is: (1) to support and advance our Designated members, Candidates, Practicing Affiliates, and Affiliates as the choice for real estate valuation solutions; (2) to uphold professional credentials, standards of professional practice and ethics for the public good; and (3) to promote an all-chapter focus that rallies support for chapter education, committee participation and chapter meetings.
OUR PROFESSIONALS
The majority of Appraisal Institute professionals are practicing real estate appraisers and property analysts who provide valuation-related services to such clients as mortgage lenders, financial institutions, government agencies, attorneys and financial planners as well as homeowners and other individual consumers. Appraisal Institute designated members have met rigorous requirements relating to education, testing, experience and demonstration of knowledge, understanding and ability.
Those individuals holding the Appraisal Institute’s MAI and SRPA designations are experienced in commercial valuation, including industrial, retail and multifamily properties. Those holding the SRA designation are experienced in residential valuation. All Appraisal Institute professionals adhere to a strictly enforced Code of Professional Ethics and Standards of Professional Appraisal Practice.
THE LEADER IN REAL ESTATE APPRAISAL EDUCATION
The Appraisal Institute is the acknowledged worldwide leader in residential and commercial real estate appraisal education. Its extensive curriculum of courses and specialty seminars provides a well-rounded education in valuation methodology for both the novice and seasoned practitioner.
REAL ESTATE APPRAISAL LITERATURE
As the world’s largest publisher of real estate appraisal literature, the Appraisal Institute offers a wide range of books and other materials on subjects ranging from basic valuation theory and techniques to advanced applications. It also publishes two quarterly periodicals, The Appraisal Journal and Valuation magazine.
AI BENEFITS
Appraisal Institute professionals have access to a variety of benefits, including insurance programs, data resources and tools, and related business materials. The Appraisal Institute also houses the Lum Library, which provides support for the research needs of AI professionals as well as the profession at large.
ADVOCACY
The Appraisal Institute is active in advocacy efforts on behalf of its professionals and the industry at large. Primarily through its office in Washington, D.C., the organization communicates regularly with legislators and regulators to encourage the adoption of appraisal policies that best serve the public interest.
