The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/SB 398
INTRODUCER: Judiciary Committee and Senator Rodriguez
SUBJECT: Limitation of Actions Involving Real Estate Appraisers and Appraisal Management
Companies
DATE: April 18, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Collazo Cibula JU Fav/CS
2. Collazo Twogood RC Favorable
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 398 creates s. 95.371, F.S., which contains new and exclusive statutes of limitation and
repose governing actions against appraisers or appraisal management companies. The effect of
the bill is to overturn the holding in Llano Financing Group, LLC v. Petit.
Specifically, the bill:
Provides that an action to recover damages from an appraiser or appraisal management
company based on contract, tort, or other legal theory for an act or omission in the
performance of appraisal services or appraisal management services must be brought:
o Within 2 years after the date that the alleged act or omission is discovered, or should have
been discovered.
o No more than 4 years after the date the appraisal services or appraisal management
services were performed, or should have been performed.
Provides that notwithstanding any other law to the contrary, all actions for damages or other
relief brought against an appraiser or appraisal management companies will be governed
exclusively by the provisions of the new statute.
The bill does not apply to:
Any administrative proceedings initiated by the Florida Real Estate Appraisal Board (the
board) or the Department of Business and Professional Regulation (the department).
Any action founded upon fraud in the provision of appraisal services or appraisal
management services by an appraiser or appraisal management company.
BILL: CS/SB 398 Page 2
The bill provides that plaintiffs having an accrued cause of action have at least 1 year after the
effective date of the bill to bring an action for negligence in the provision of appraisal or
appraisal management services.
The bill takes effect July 1, 2023.
II. Present Situation:
Appraisers
An “appraiser” is any person who is a registered trainee real estate appraiser, a licensed real
estate appraiser, or a certified real estate appraiser.1
A “registered trainee appraiser” means a person who is registered with the department as
qualified to perform appraisal services only under the direct supervision of a certified
appraiser. A registered trainee appraiser may accept appraisal assignments only from his or
her primary or secondary supervisory appraiser.2
A “licensed appraiser” means a person who is licensed by the department as qualified to
issue appraisal reports for residential real property of one to four residential units or on such
real estate or real property as may be authorized by federal regulation. 3
A “certified appraiser” may be either:
o A “certified general appraiser,” who is a person certified by the department as qualified
to issue appraisal reports for any type of real property;4 or
o A “certified residential appraiser,” who is a person certified by the department as
qualified to issue appraisal reports for residential real property of one to four residential
units, without regard to transaction value or complexity, or real property as may be
authorized by federal regulation.5
Appraisal Services
“Appraisal” or “appraisal services” means the services provided by certified or licensed
appraisers or registered trainee appraisers.6 Such services include the following three kinds of
assignments:
Appraisal assignments. An appraisal assignment is an engagement for which a person is
employed or retained to act, or could be perceived by third parties or the public as acting, as
an agent or a disinterested third party in rendering an unbiased analysis, opinion, review, or
conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects
of, identified real property.7
Analysis assignments. An analysis assignment is a kind of appraisal service that relates to an
employer or client’s individual needs or investment objectives. It includes specialized
marketing, financing, and feasibility studies as well as analyses, opinions, and conclusions
1
Section 475.611(1)(h), F.S.
2
Section 475.611(1)(v), F.S.
3
Section 475.611(1)(t), F.S. As of July 1, 2003, the department no longer issues licenses for this category. Id.; see also s.
475.611(1)(l), F.S. (defining a “certified residential appraiser” as performing similar duties).
4
Section 475.611(1)(k), F.S.
5
Section 475.611(1)(l), F.S.
6
Section 475.611(1)(a), F.S.
7
Section 475.611(1)(a)1., F.S.
BILL: CS/SB 398 Page 3
given in connection with activities such as real estate brokerage, mortgage banking, real
estate counseling, or real estate consulting.8
Appraisal review assignments. An appraisal review assignment is an engagement for which
an appraiser is employed or retained to develop and communicate an opinion about the
quality of another appraiser’s appraisal, appraisal report, or work. An appraisal review may
or may not contain the reviewing appraiser’s opinion of value.9
Appraisal Management
An “appraisal management company” is a person who, within a 12-month period, oversees an
appraiser panel of more than 15 state-certified or state-licensed appraisers in a state, or 25 or
more state-certified or state-licensed appraisers in two or more states.10
“Appraisal management services” means the coordination or management of appraisal services
for compensation by:
Employing, contracting with, or otherwise retaining one or more licensed or certified
appraisers to perform appraisal services for a client; or
Acting as a broker or intermediary between a client and one or more licensed or certified
appraisers to facilitate the client’s employing, contracting with, or otherwise retaining the
appraisers.11
Department of Business and Professional Regulation
The Department of Business and Professional Regulation is the state agency charged with
licensing and regulating Florida businesses and professionals.12 The department’s regulation of
professionals is undertaken “for the preservation of the health, safety, and welfare of the public
under the police powers of the state.”13
Regulation is required when:
The potential for harming or endangering public health, safety, and welfare is recognizable
and outweighs any anticompetitive impact that may result;
The public is not effectively protected by other state statutes, local ordinances, federal
legislation, or other means; and
Less restrictive means of regulation are not available.14
8
Section 475.611(1)(a)2., F.S.
9
Section 475.611(1)(a)3., F.S.
10
Section 475.611(1)(c), F.S. Any person who performs appraisal management services, regardless of the particular term
used (“appraisal management company,” “appraiser cooperative,” “appraiser portal,” “mortgage technology company,” or
other term) qualifies as an appraisal management company for purposes of the statute. See id.
11
Section 475.611(1)(d), F.S.
12
State of Florida, Department of Business and Professional Regulation, https://jobs.myflorida.com/go/Department-of-
Business-and-Professional-Regulation/2815000/ (last visited Mar. 16, 2023); see also Section 475.611(1)(o), F.S. (defining
“department” as the Department of Business and Professional Regulation); see also s. 455.01(6), F.S. (defining the word
“profession” as any activity, occupation, profession, or vocation regulated by the department in the Divisions of Certified
Public Accounting, Professions, Real Estate, and Regulation”).
13
Section 455.201(2), F.S.
14
Section 455.201(2)(a)-(c), F.S.
BILL: CS/SB 398 Page 4
Division of Real Estate and the Florida Real Estate Appraisal Board
The Division of Real Estate is one of the department’s divisions.15 It protects the public by
regulating real estate and appraisal licenses pursuant to chapter 475, F.S. The division is
responsible for the examination, licensing, and regulation of over a quarter of a million
individuals, corporations, real estate schools, and instructors. It also provides administrative
support to the Florida Real Estate Appraisal Board, which administers and enforces the real
estate appraiser license law, chapter 475, Part II, F.S.16
The Florida Real Estate Appraisal Board is a 9-member board, headquartered in Orlando,17
whose members are appointed by the Governor subject to confirmation by the Senate.18 The
board is responsible for:19
Regulating the issuance of licenses, certifications, and registrations to appraisers;
Disciplining appraisers in any manner permitted under state law;
Establishing qualifications for licenses, certifications, registrations, and permits consistent
with state law;
Regulating approved courses;
Establishing standards for real estate appraisals; and
Establishing standards for, and regulating, supervisory appraisers.20
The composition of the board is provided by state law.21 Specifically:
4 members must be real estate appraisers who have been engaged in the general practice of
appraising real estate in Florida for at least 5 years immediately preceding appointment;
1 member must represent the appraisal management industry;
1 member must represent organizations that use appraisals for the purpose of eminent domain
proceedings, financial transactions, or mortgage insurance; and
3 members must represent the general public and may not be connected in any way with the
practice of real estate appraisal.22
15
Section 20.165(2)(a)-(k), F.S. The others are the Divisions of Administration; Alcoholic Beverages and Tobacco; Certified
Public Accounting; Drugs, Devices, and Cosmetics; Florida Condominiums, Timeshares, and Mobile Homes; Hotels and
Restaurants; Professions; Regulation; Technology; and Service Operations. Id.
16
Fla. Dep’t of Bus. & Prof. Reg., Division of Real Estate Brochure, available at http://www.myfloridalicense.com/dbpr/
re/documents/DRE_Lic_Brochure.pdf (last visited Mar. 16, 2023).
17
Section 475.613(1)(b), F.S.
18
Section 475.613(1), F.S.; see also s. 475.611(1)(j), F.S. (defining “board” as the Florida Real Estate Appraisal Board
established under s. 475.613, F.S.).
19
Section 475.613(2), F.S.
20
Id. The board administers and enforces the real estate appraiser license law, part II of chapter 475, F.S., and is also
empowered to adopt rules that enable it to implement its statutory authorized duties and responsibilities. See generally Fla.
Admin. Code Ch. 61J1; see also Fla. Dep’t of Bus. & Prof. Reg., Real Estate Appraisal – Board Information, http://www.
myfloridalicense.com/DBPR/real-estate-appraisal-board/board-information/ (last visited Mar. 16, 2023).
21
Section 475.613(1), F.S.
22
Id. The Governor is directed to give preference to real estate appraisers who are not primarily engaged in real estate
brokerage or mortgage lending activities. Id. Additionally, the appraiser members are supposed to be as representative of the
entire industry as possible, and membership in a nationally-recognized or state-recognized appraisal organization may not be
a prerequisite to membership on the board. Id. To the extent possible, no more than 2 members of the board may be primarily
affiliated with any one particular national or state appraisal association. Two of the members must be licensed or certified
residential real estate appraisers and 2 of the members must be certified general real estate appraisers at the time of their
appointment. Id.
BILL: CS/SB 398 Page 5
Members of the board are appointed for 4-year terms, and may not serve for more than 2
consecutive terms. The board meets at least once each calendar quarter to conduct its business.23
Statutes of Limitation and Repose
Legal actions must be brought within the timeframes authorized by law.
A statute of limitations typically sets a time limit within which an action must be filed as
measured from the accrual of the cause of action, after which time obtaining relief is barred.24
An appraiser renders a professional service and is a professional within the meaning of the
statute of limitations governing actions for professional malpractice.25 Actions for professional
malpractice must be commenced within 2 years from the time the cause of action is discovered
or should have been discovered with the exercise of due diligence.26 This 2-year limitation on
actions for professional malpractice is limited to persons in privity with the professional.27
A statute of repose precludes a right of action after a specified time, instead of establishing a
time period within which the action must be brought measured from the point in time when the
cause of action accrued.28
Llano Financing Group, LLC v. Petit
In 2015, Llano Financing Group, LLC (Llano), the investment trust assignee of a certain
mortgage loan, sued Theodore Petit (Petit), a real estate appraiser, for professional negligence,
negligent misrepresentation, and false information negligently supplied for the advice of others.29
Llano asserted that an appraisal prepared by Petit in 2004 undervalued a certain property
foreclosed upon by Llano, which caused Llano to sell the property at a loss about 10 years later.
Because the original lender would not have made the loan but for the bad appraisal, and Llano
would not have purchased the loan from the original lender but for the bad appraisal, Llano
alleged that Petit was liable for any loss suffered by Llano. Petit moved to dismiss the case,
arguing that the statute of limitations precluded Llano’s claims. The trial court granted the
motion, and Llano appealed. At issue before the First District Court of Appeals was when the
statute of limitations commenced on the negligent appraisal claims.30
The Court held that the 4-year statute of limitations for negligence actions, instead of the 2-year
statute of limitations for professional malpractice actions, applied to the claims brought by
Llano. The Court reasoned that because Llano was not in “direct contractual privity” with Petit,
23
Section 475.613(1)(a) and (c), F.S.
24
National Auto Service Centers, Inc., v. F/R 500, LLC, 192 So. 3d 498, 509-10 (Fla. 2d DCA 2016) (stating that the purpose
of a statute of limitations is to “require that a plaintiff with a known cause of action prosecute that claim diligently and within
a predictable time that will allow for finality of claims prior to the potential loss of available evidence over time”) (internal
citations omitted).
25
Section 475.611(1)(h), F.S. (citing s. 95.11(4)(a), F.S.).
26
Section 95.11(4)(a), F.S.
27
Id.
28
National Auto Service Centers, Inc., 192 So. 3d at 509 (citing Univ. of Miami v. Bogorff, 583 So. 2d 1000, 1003 (Fla.
1991)).
29
Llano Financing Group, LLC v. Petit, 230 So. 3d 141, 142-43 (Fla. 1st DCA 2017).
30
Id.
BILL: CS/SB 398 Page 6
the 2-year statute of limitations for professional malpractice actions did not apply, but the 4-year
state of limitations for negligence did.31
Consequently, Llano had 4 years, instead of 2, to bring its claims against Petit – measured from
the time that the original lender relied upon the appraisal to fund the loan (i.e. measured from
2004). Because Llano brought suit over a decade after the 4-year statute of limitations for
negligence began to run, the Court affirmed the trial court’s dismissal of the case.32
III. Effect of Proposed Changes:
CS/SB 398 creates s. 95.371, F.S., entitled “Actions against real estate appraisers and appraisal
management companies,” within chapter 95, F.S., which governs limitations of actions and
adverse possession. The effect of the bill is to overturn the holding in Llano Financing Group,
LLC v. Petit, by enacting new stat