TRENTON – In an effort to combat discriminatory appraisals of property, the Senate Commerce Committee advanced legislation sponsored by Senator, and Congresswoman-elect, Nellie Pou as well as Senate Majority Leader M. Teresa Ruiz to establish penalties for those who engage in discriminatory appraisals.

“Unfortunately, housing appraisal discrimination remains alive and well in the United States. Years of research has demonstrated that appraisals are systematically lower for families who are Black or Latino than for families who are White.” said Senator Pou (D-Passaic/Bergen). “This law will help to combat this discrimination, and in doing so reduce the racial wealth gap.”

Under the bill, S-3927, appraisal professionals found to be engaged in discriminatory practices concerning the appraisal of property would be subject to punishment imposed by the New Jersey State Real Estate Appraiser Board. In addition to the voiding of the discriminatory appraisal for any appraisal found to be discriminatory irrespective of the number of offenses made by the appraiser, the penalty for a first offense would include the Board ordering the holder of the appraisal license, certificate, or registration to make restitution of the cost of the discriminatory appraisal and attend an anti-bias seminar approved by the Board. A first offense would also be subject to a civil penalty not exceeding $10,000.

For a second offense, the penalty would include the restitution of the cost of the discriminatory appraisal, a civil penalty not exceeding $25,000 for an offense occurring within 5 years of the first, as well as the suspension of the license, certificate, or registration of a holder, with the ability to restore the license, certificate, or registration upon the making of the restitution and completion of an anti-bias seminar. A third offense would include the same penalties as a second, except that there would be no opportunity for the restoral of a license, certificate, or registration and the civil penalty would be an amount not exceeding $50,000.

“Discriminatory appraisals in real estate produce damaging long-term effects, representing roadblocks in the building of racial equity and generational wealth,” said Majority Leader Ruiz (D-Essex/Hudson). “By establishing these penalties for discriminatory behavior, we can combat bias in real estate appraisals and work to ensure that every family, regardless of race, can be on a level playing field to have their home’s true value recognized.”

The legislation would also establish a requirement for licensed mortgage salespersons to provide, within three days of receiving a mortgage loan application, a document informing the mortgage loan applicant of the opportunity to report any suspicion of a discriminatory appraisal to the Division on Civil Rights.

The bill was advanced in a unanimous vote.