Senate Commerce Committee Statement to Senate, No. 3927 — State of New Jersey (December 12, 2024)

Summary

The Senate Commerce Committee of the State of New Jersey, in a statement dated December 12, 2024, reports favorably and with committee amendments Senate Bill No. 3927. As amended, the bill sets penalties for appraisers the State Real Estate Appraiser Board finds engaged in discriminatory real estate appraisals, voiding the appraisal and imposing escalating sanctions from fines and an anti-bias seminar to suspension and revocation. Civil penalties are up to $10,000 for a first violation, up to $25,000 for a second within five years and up to $50,000 for a third, and a complainant may sue in Superior Court. Mortgage applicants must receive, within three days, a free document on reporting suspected discriminatory appraisals to the Division on Civil Rights.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
3927

with
committee amendments

STATE
OF NEW JERSEY

DATED: DECEMBER
12, 2024

The Senate Commerce Committee reports favorably and
with committee amendments Senate Bill No. 3927.

As
amended, this bill establishes penalties for appraisers who engage in
discriminatory real estate appraisals and requires certain information to be
provided to present and prospective owners or occupants of real estate.

Under
the bill, holders of appraisal licenses or certificates, or appraisal
management company registrations, may have their licenses, certificates or
registrations revoked or suspended, or be subject to fines, if the State Real
Estate Appraiser Board determines that the holder of the credential has engaged
in a discriminatory appraisal of real estate on the basis of the race, color,
religion, sex, actual or perceived sexual orientation, actual or perceived
gender identity, age, actual or perceived marital status, disability, familial
status, or national origin of either the prospective owners or occupants of the
real estate or real property, the present owners or occupants of the real
estate or real property, or the present owners or occupants of the real estate
or real properties in the vicinity of the property, or on any other basis
prohibited by federal, State, or local law.

If
the board finds a holder of a credential discriminated in the appraisal of real
estate, the appraisal is deemed void and, for a first violation, the board is
to fine the holder, order the holder to make restitution of the cost of the
discriminatory appraisal, and require the holder to attend an anti-bias seminar
approved by the board. A second violation requires the board to suspend the
credential of the holder, order the holder to make restitution by covering the
cost of the appraisal, and require the holder to attend an anti-bias seminar
approved by the board. A credential may be restored after a second violation
if the individual demonstrates restitution of the discriminatory appraisal and
completion of the required anti-bias seminar after a period of suspension of no
less than 30 days. If a third violation is committed, the board, after
appropriate notice and a hearing, is to revoke the credential of the holder and
order the holder to make restitution of the discriminatory appraisal. A holder
of a credential who discriminates in the appraisal of real estate is also
subject to civil penalties of varying amounts depending on the violation—up to
$10,000 for a first violation; up to $25,000 for a second violation occurring
within five years of the first; and up to $50,000 for a third violation. A
complainant is also granted the right to initiate a lawsuit in Superior Court.

Additionally,
the bill provides that within three days of receiving a mortgage loan
application, a licensed mortgage broker or licensed real estate broker,
broker-salesperson, or other mortgage salesperson must provide the mortgage
applicant with a document, provided free of charge, that contains information,
in a form and manner as prescribed by the board, informing the applicant of the
opportunity to report, through the Internet website or telephone number of the
Division on Civil Rights, any suspicion of discriminatory appraisal by the
holder of an appraising credential. This requirement will apply to all
applications for mortgages for residential real estate.

Finally,
the bill requires that, when receiving a report of an alleged discriminatory
appraisal, the Division on Civil Rights must ascertain the basis for the
allegation and solicit from the complainant relevant demographic information,
including but not limited to the identity of the complainant. The complainant
may provide the demographic information solicited by the division on a
voluntary basis. The division must compile any demographic information
provided by the complainants and report in the aggregate the demographic
information collected to the Governor and to the Legislature on or before July
1, 2026.

COMMITTEE AMENDMENTS

The committee amended the bill to:

(1) allow a complainant to initiate a lawsuit in
Superior Court pursuant to the “Law Against Discrimination;”

(2) stipulate that the requirement that the
distribution of document on how to report suspicions of a discriminatory
appraisal by the holder of an appraising credential will be solely performed by
mortgage salespersons to mortgage applicants;

(3) clarify that the requirement to provide mortgage
applicants with a document informing the applicants of the opportunity to
report suspicions of a discriminatory real estate appraisal will apply to all mortgage
applications for residential real estate; and

(4) make certain technical changes.

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