How do I file a complaint against an appraiser in California?

Who handles appraiser complaints in California

The Bureau of Real Estate Appraisers, called BREA, licenses appraisers in California and investigates complaints against them. It also handles complaints against appraisal management companies (AMCs), the middlemen many lenders use to order appraisals.

BREA says complaints come from clients, homeowners, lenders, other regulators and appraisers. The most common allegations it lists include:

• Violations of USPAP (the national appraisal standards) or BREA regulations
• Technical errors
• An inaccurate value conclusion
• Fraud
• Failure to provide the services that were contracted
• Inappropriate conduct related to an appraisal assignment

Notice what is not on the list: "the appraiser was grumpy" and "the appraiser did not compliment my backsplash." Both are real feelings. Neither is a violation.

BREA also opens cases on its own, from background investigations and from problems it finds in license applications. For a homeowner, though, the complaint is the front door.

What a complaint can and cannot fix

This is the part people need to hear before they spend a weekend writing a twelve-page letter.

If BREA finds a violation, it can impose public reproval, more education, a fine, probation, suspension, revocation or special conditions on the license. Those are real consequences for the appraiser.

But BREA says plainly that it cannot act as a court of law, order a refund, award damages, enforce contracts or give legal advice. None of its sanctions rewrite the appraisal you are unhappy with. If your purchase is stuck because the value came in low, a BREA complaint will not close your escrow on time. Escrow does not wait for state investigations. Escrow barely waits for lunch.

If the problem is the number, the faster path usually runs through the lender, with a reconsideration of value (ROV) backed by better comparable sales. If you lost money, BREA suggests you may want an attorney. If you are dealing with a lawsuit or real damages, talk to a California real estate attorney before you file anything.

The complaint is for conduct and competence. The ROV is for the number. Many people need one, some need both, and almost nobody needs to start with the angry email.

How to file, step by step

1. Get the complete appraisal report. BREA's form asks for the complete report, not the summary page a lender emailed you. If you were the borrower, ask your lender for the full copy.
2. Choose how to file. Use BREA's online appraiser and AMC complaint application, or download form REA 4001 from the BREA website.
3. Write a short, factual statement. The form says to give the full details in a brief statement and to be factual. Name the page, the line and the problem.
4. Attach your evidence. The form lists emails and correspondence, the order form or contract, and copies of other evidence such as additional appraisals, review appraisals, additional sales and photos. Send copies, not originals.
5. Sign and date it. BREA will not accept a complaint that is not completed, signed and dated. You certify the facts under penalty of perjury, so stick to things you can prove.
6. File soon. BREA says a complaint can be filed any time there is a legitimate complaint with supporting documents, but it should be filed as soon as possible after the event.

What happens after you file

BREA sends you an acknowledgment letter. Then it investigates. When the case is closed, you get a closure letter. The appraiser or AMC is notified of the outcome.

How long does it take? BREA says it is not possible to estimate. It depends on caseload, how complex the case is, whether witnesses are available and whether site visits are needed. Bring a book. Maybe a series.

BREA says it will make every effort to keep your identity confidential, but it cannot guarantee it. If the case goes to a formal hearing, it will probably have to reveal who filed. If BREA files an accusation, that accusation is posted publicly, and the appraiser can contest it before an administrative law judge. An accusation is only allegations. Findings come later, in a final decision, which can also dismiss the case.

Lenders have their own duty here too. Fannie Mae requires lenders to report unresolved material deficiencies or unacceptable appraisal practices to the appropriate licensing agency, and suspected violations of anti-discrimination laws to the proper agency.

What I would do before filing

I am an appraiser. I believe in accountability for my profession, and I also believe in evidence. Those two things fit together.

Before you file, separate disagreement from error. An appraiser can pick different comps than your agent and still be doing the job right. An appraiser who used the wrong square footage, ignored a better sale two doors down or adjusted with nothing behind it is a different story.

Here is how I would check:

• Read the report line by line. Look for wrong facts first: bedrooms, bathrooms, lot size, square footage.
• Look at the comps. Were there closer, newer or more similar sales that the report skipped without a reason?
• Look at the adjustments. Does the report explain how they were measured, or does it just state them?
• Get a second opinion. A desktop review, where another appraiser checks the report against the evidence, turns "I think it is wrong" into "here is what is wrong, page by page."

Facts over feelings. A complaint built on evidence gets taken seriously. A complaint built on "my neighbor's Zestimate" gets a closure letter.