North Dakota Administrative Code Title 101 - Real Estate Appraiser Qualifications and Ethics Board
Case 1: Overstating Property Value for a Loan
Situation
An appraiser was hired to value a residential property for a mortgage. The appraiser knowingly inflated the value to help the buyer qualify for a larger loan.
Relevant NDAC Provisions
NDAC 101-02-03-01: Appraisers must perform assignments honestly, objectively, and without bias.
NDAC 101-02-04-01: Misrepresentation of facts is prohibited.
Board Findings
Comparison with market data showed the appraisal was $50,000 above actual market value.
Emails indicated the appraiser agreed to inflate the value at the client’s request.
Outcome
Appraiser’s license suspended for 12 months.
Required to complete ethics and USPAP (Uniform Standards of Professional Appraisal Practice) training.
Warning issued that repeat violations could lead to permanent revocation.
Key Lesson
NDAC enforces honesty and market-based valuation; collusion to inflate values is a severe violation.
Case 2: Failure to Maintain Continuing Education
Situation
A licensed residential appraiser failed to complete the required continuing education (CE) hours for license renewal.
Relevant NDAC Provisions
NDAC 101-01-05-01: Appraisers must complete CE before renewal to maintain active licensure.
NDAC 101-01-05-05: Failure to comply may result in administrative action.
Board Findings
Appraiser renewed license without documentation of 30 hours of CE in the previous 2 years.
CE records were requested and could not be produced.
Outcome
License placed on probation until CE requirements met.
Appraiser required to submit proof of all completed courses.
Future renewals will be audited for compliance.
Key Lesson
NDAC mandates ongoing professional education; failure to comply triggers administrative restrictions even without misconduct.
Case 3: Appraisal Report Lacking Adequate Support
Situation
An appraiser submitted a report for a commercial property but failed to include supporting data for the valuation, such as comparable sales or income analysis.
Relevant NDAC Provisions
NDAC 101-02-03-03: Appraisers must provide a credible, well-supported report consistent with USPAP.
Reports must include data, methodology, and reasoning.
Board Findings
Review revealed no comparable sales included, and income capitalization assumptions were unsupported.
Report lacked transparency, making it impossible for the lender to verify the conclusion.
Outcome
Appraiser issued a letter of reprimand.
Required to retrain in USPAP report writing.
Must submit future reports for board review for 6 months.
Key Lesson
NDAC emphasizes documentation and transparency; unsupported conclusions are a violation.
Case 4: Conflict of Interest Not Disclosed
Situation
An appraiser valued a property for a family member while failing to disclose the relationship to the client or lender.
Relevant NDAC Provisions
NDAC 101-02-04-02: Appraisers must disclose conflicts of interest.
Assignments must be free from influence that could bias the appraisal.
Board Findings
Emails and social media confirmed a close family relationship.
Appraiser did not mention this in the report or to the lender.
Outcome
License suspended for 6 months.
Must complete ethics and conflict-of-interest training.
Future assignments will require full disclosure statements.
Key Lesson
Even indirect influence or relationships must be disclosed to maintain professional integrity.
Case 5: Practicing Without a License
Situation
An unlicensed individual performed appraisals for multiple mortgage lenders over a year.
Relevant NDAC Provisions
NDAC 101-01-02-01: Only licensed or certified appraisers may practice.
Practicing without a license constitutes unlawful practice.
Board Findings
Multiple appraisal reports submitted under the individual’s name.
Lenders unaware the person was unlicensed.
Outcome
Cease-and-desist order issued immediately.
Individual barred from applying for licensure for one year.
Any reports completed were deemed invalid for lending purposes.
Key Lesson
NDAC strictly enforces licensure requirements; unlicensed practice has serious legal and financial consequences.
Case 6: Bias in Appraisal Due to Client Pressure
Situation
A lender pressured an appraiser to adjust a property valuation upward to approve a loan, and the appraiser complied.
Relevant NDAC Provisions
NDAC 101-02-03-01: Appraisers must be independent and impartial.
NDAC 101-02-04-03: Influence from third parties compromising objectivity is prohibited.
Board Findings
Investigation showed lender requested a higher valuation.
Appraiser altered report to meet client’s demand.
Market analysis did not support the change.
Outcome
Appraiser’s license suspended for 12 months.
Required retraining in professional independence and ethics.
Reports reviewed by board before approval for 12 months.
Key Lesson
NDAC prioritizes objectivity; submitting a report under client pressure violates ethical rules.
Summary of Themes in NDAC Title 101
Honesty and Accuracy – Inflating property values is a serious violation.
Continuing Education – Ongoing training is mandatory for license maintenance.
Report Transparency – All appraisal reports must include supporting data.
Conflict of Interest – Must disclose any relationships affecting impartiality.
Licensing Compliance – Practicing without a license is illegal.
Independence from Pressure – Appraisers must resist client influence to maintain objectivity.
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