The fair market value of the real property securing a shared appreciation loan shall be determined annually as provided in this article. The lender shall select an independent appraiser annually to perform an appraisal of the property subject to a shared appreciation loan. The appraisal shall be performed within 30 days preceding the anniversary date of the loan and a copy of the current appraisal shall be sent by first-class mail to the borrower no later than five days following the anniversary date of the loan, together with a notice informing the borrower that the appraisal will constitute a final and conclusive
determination of the value of the property for certain purposes and that if the borrower disputes the amount of the appraisal, the borrower may procure an independent appraisal as provided in Section 1917.041. The lender may require the borrower to pay for the cost of the appraisal.
Article 4Annual Appraisals
Section § 1917.040
This law requires that the value of a property tied to a shared appreciation loan be appraised every year by an independent appraiser chosen by the lender. The appraisal happens within 30 days before the loan's anniversary. The borrower gets a copy of this appraisal by mail shortly after the loan anniversary, along with a notice. This appraisal is considered the final say on the property's value for certain matters, unless the borrower disagrees. In that case, the borrower can choose to get their own appraisal. The borrower might also have to pay for the initial appraisal.
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Section § 1917.041
If you, as the borrower, disagree with the property's appraisal value, you have 30 days from your loan's anniversary date to get your appraisal from an independent appraiser. You must pay for this yourself, and make sure to mail a copy to your lender within that 30-day window.
If the borrower disputes the amount of the appraisal, the borrower, within 30 days of the anniversary date of the loan, may procure an appraisal of the property at the borrower’s expense by a qualified independent appraiser, and a copy of the appraisal shall be sent by first-class mail to the lender within the 30-day period.
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Section § 1917.042
If the person taking out a loan (the borrower) has an appraisal that's lower than the one the lender has, the final value used for adjustments is the average of both appraisals.
If the appraisal by the appraiser selected by the borrower is lower in amount than the appraisal by the appraiser selected by the lender, the amount to be used to calculate the annual adjustment shall be one-half of the sum of the two appraisals.
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Section § 1917.043
This law explains how the value of a property is determined after getting a loan. If the borrower doesn't disagree with the property's appraisal, or even if they do and it gets resolved, that appraisal value becomes the property's official value starting from the loan's anniversary date. This value is used to figure out the property's adjusted fair market value.
The appraisal amount, as determined pursuant to Section 1917.040 if the borrower does not dispute the appraisal amount, or 1917.042 if the borrower disputes the appraisal amount, shall constitute the value of the property from and after the anniversary date of the loan for the purpose of determining the property’s adjusted fair market value under Section 1917.020.
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Section § 1917.044
This law says that the shared appreciation loan agreement can outline specific requirements for the appraisers involved. Essentially, the loan's terms can determine who is qualified to act as an appraiser.
The qualifications of the appraisers may be specified by the terms of the shared appreciation loan for purposes of this article and Article 5 (commencing with Section 1917.050).
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