(a) Receipt of a Complaint Intake Form by the Board does not constitute the filing of a formal complaint by the Board against the AMC named on the Complaint Intake Form. Upon receipt of a signed Complaint Intake Form, staff will:
  (1) assign the complaint a case number in the complaint tracking system; and
  (2) send written acknowledgement of receipt to the complainant.
(b) Priority of complaint investigations. The Board prioritizes and investigates complaints based on the risk of harm each complaint poses to the public. Complaints that pose a high risk of public harm include violations of the AMC Act or Board rules that:
  (1) evidence serious deficiencies, including:
    (A) Fraud;
    (B) Identity theft;
    (C) Unlicensed activity;
    (D) Ethical violations;
    (E) Violations of appraiser independence; or
    (F) Other conduct determined by the Board that poses a significant risk of public harm; and
  (2) were done:
    (A) with knowledge;
    (B) deliberately;
    (C) willfully; or
    (D) with gross negligence.
(c) If the staff determines at any time that the complaint is not within the Board's jurisdiction, or that no violation exists, the complaint will be dismissed with no further processing. The Board or the Executive Director may delegate to staff the duty to dismiss complaints.
(d) A complaint alleging mortgage fraud or in which mortgage fraud is suspected:
  (1) may be investigated covertly; and
  (2) will be referred to the appropriate prosecutorial authorities.
(e) Staff may request additional information necessary to determine how to proceed with the complaint from any person.
(f) As part of a preliminary investigative review, a copy of the Complaint Intake Form and all supporting documentation will be sent to the Respondent unless the complaint qualifies for covert investigation and the TALCB Division deems covert investigation appropriate.
(g) The Board will:
  (1) protect the complainant's identity to the extent possible by excluding the complainant's identifying information from a complaint notice sent to a respondent.
  (2) periodically send written notice to the complainant and each respondent of the status of the complaint until final disposition. For purposes of this subsection, "periodically" means at least once every 90 days.
(h) The Respondent must submit a response within 20 days of receiving a copy of the Complaint Intake Form. The 20-day period may be extended for good cause upon request in writing or by e-mail. The response must include the following:
  (1) A copy of the appraisal report(s), if any, that is (are) the subject of the complaint;
  (2) A copy of the documents or other business records associated with the appraisal report(s), incident(s), or conduct listed in the complaint, with the following signed statement attached to the response: I SWEAR AND AFFIRM THAT EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE COPY OF EACH AND EVERY BUSINESS RECORD ACCOMPANYING THIS RESPONSE IS A TRUE AND CORRECT COPY OF THE ACTUAL BUSINESS RECORD, AND NOTHING HAS BEEN ADDED TO OR REMOVED FROM THIS BUSINESS RECORD OR ALTERED. (SIGNATURE OF RESPONDENT);
  (3) A narrative response to the complaint, addressing each and every item in the complaint;
  (4) A list of any and all persons known to the Respondent to have actual knowledge of any of the matters made the subject of the complaint and, if in the Respondent's possession, contact information;
  (5) Any documentation that supports Respondent's position that was not in the original documentation, as long as it is conspicuously labeled as additional documentation and kept separate from the original documentation. The Respondent may also address other matters not raised in the complaint that the Respondent believes need explanation; and
  (6) a signed, dated and completed copy of any questionnaire sent by Board staff.
(i) Staff will evaluate the complaint within three months of receipt of the response from Respondent to determine whether sufficient evidence of a potential violation of the AMC Act or Board rules exists to pursue investigation and possible formal disciplinary action. If staff determines there is no jurisdiction, no violation exists, or there is insufficient evidence to prove a violation, or the complaint warrants dismissal, including contingent dismissal, under subsection (m) of this section, the complaint will be dismissed with no further processing.
(j) A formal complaint will be opened and investigated by a staff investigator or investigative committee if:
  (1) the informal complaint is not dismissed under subsection (i) of this section; or
  (2) staff opens a formal complaint on its own motion.
(k) Written notice that a formal complaint has been opened will be sent to the Complainant and Respondent.
(l) The staff investigator or investigative committee assigned to investigate a formal complaint will prepare a report detailing all findings.
(m) In determining the proper disposition of a formal complaint pending as of or filed after the effective date of this subsection, and subject to the maximum penalties authorized under Chapter 1104, Texas Occupations Code, staff, the administrative law judge in a contested case hearing and the Board shall consider the following sanctions guidelines and list of non-exclusive factors as demonstrated by the evidence in the record of a contested case proceeding.
  (1) For the purposes of these sanctions guidelines:
    (A) An AMC will not be considered to have had a prior warning letter, contingent dismissal or discipline if that prior warning letter, contingent dismissal or discipline occurred more than ten years ago;
    (B) A prior warning letter, contingent dismissal or discipline given less than ten years ago will not be considered unless the Board took final action against the AMC before the date of the incident that led to the subsequent disciplinary action;
    (C) Prior discipline is defined as any sanction, including an administrative penalty, received under a Board final or agreed order;
    (D) A violation refers to a violation of any provision of the AMC Act or Board rules;
    (E) "Minor deficiencies" is defined as violations of the AMC Act or Board rules which do not call into question the qualification of the AMC for licensure in Texas;
    (F) "Serious deficiencies" is defined as violations of the Act or Board rules which do call into question the qualification of the AMC for licensure in Texas;
    (G) "Remedial measures" include training, auditing, or any combination thereof; and
    (H) The terms of a contingent dismissal agreement will be in writing and agreed to by all parties. Staff may dismiss the complaint with a non-disciplinary warning upon written agreement that the Respondent will complete all remedial measures within the agreed-upon timeframe. If the Respondent fails to meet the deadlines in the agreement, the Respondent's license or certification will be automatically set to inactive status until the Respondent completes the remedial measures set forth in the agreement.
  (2) List of factors to consider in determining proper disposition of a formal complaint:
    (A) Whether the Respondent has previously received a warning letter or contingent dismissal, and if so, the similarity of facts or violations in that previous complaint to the facts or violations in the instant complaint matter;
    (B) Whether the Respondent has previously been disciplined;
    (C) If previously disciplined, the nature of the discipline, including:
      (i) Whether it concerned the same or similar violations or facts;
      (ii) The nature of the disciplinary sanctions imposed;
      (iii) The length of time since the previous discipline;
    (D) The difficulty or complexity of the incident at issue;
    (E) Whether the violations found were of a negligent, grossly negligent or a knowing or intentional nature;
    (F) Whether the violations found involved a single appraisal or instance of conduct or multiple appraisals or instances of conduct;
    (G) To whom were the appraisal report(s) or the conduct directed, with greater weight placed upon appraisal report(s) or conduct directed at:
      (i) A financial institution or their agent, contemplating a lending decision based, in part, on the appraisal report(s) or conduct at issue;
      (ii) The Board;
Cont'd...
(iii) A matter which is actively being litigated in a state or federal court or before a regulatory body of a state or the federal government;
      (iv) Another government agency or government sponsored entity, including, but not limited to, the United States Department of Veteran's Administration, the United States Department of Housing and Urban Development, the State of Texas, Fannie Mae, and Freddie Mac;
      (v) A consumer contemplating a real property transaction involving the consumer's principal residence;
    (H) Whether Respondent's violations caused any harm, including financial harm, and the amount of such harm;
    (I) Whether Respondent acknowledged or admitted to violations and cooperated with the Board's investigation prior to any contested case hearing;
    (J) The business operating history of the AMC, including:
      (i) The size of the AMC's appraiser panel;
      (ii) The length of time Respondent has been licensed as an AMC in Texas;
      (iii) The length of time the AMC has been conducting business operations, in any jurisdiction;
      (iv) The nature and extent of any remedial measures and sanctions the Respondent had received related to the areas in which violations were found; and
      (v) Respondent's affiliation with other business entities;
    (K) Whether Respondent can improve the AMC's practice through the use of remedial measures; and
    (L) Whether Respondent has voluntarily completed remedial measures prior to the resolution of the complaint.
  (3) The sanctions guidelines contained herein shall be employed in conjunction with the factors listed in paragraph (2) of this subsection to assist in reaching the proper disposition of a formal complaint:
    (A) 1st Time Discipline Level 1--violations of the AMC Act or Board rules which evidence minor deficiencies will result in one of the following outcomes:
      (i) Dismissal;
      (ii) Dismissal with non-disciplinary warning letter;
      (iii) Contingent dismissal with remedial measures.
    (B) 1st Time Discipline Level 2--violations of the AMC Act or Board rules which evidence serious deficiencies will result in one of the following outcomes:
      (i) Contingent dismissal with remedial measures;
      (ii) A final order which imposes one or more of the following:
        (I) Remedial measures;
        (II) Required adoption and implementation of written, preventative policies or procedures;
        (III) A probationary period with provisions for monitoring the AMC;
        (IV) Monitoring and/or preapproval of AMC panel removals for a specified period of time;
        (V) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;
        (VI) Minimum of $1,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (C) 1st Time Discipline Level 3--violations of the AMC Act or Board rules which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:
      (i) A period of suspension;
      (ii) A revocation;
      (iii) Remedial measures;
      (iv) Required adoption and implementation of written, preventative policies or procedures;
      (v) A probationary period with provisions for monitoring the AMC;
      (vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;
      (vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;
      (viii) Minimum of $2,500 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (D) 2nd Time Discipline Level 1--violations of the AMC Act or Board rules which evidence minor deficiencies will result in one of the following outcomes:
      (i) Dismissal;
      (ii) Dismissal with non-disciplinary warning letter;
      (iii) Contingent dismissal with remedial measures;
      (iv) A final order which imposes one or more of the following:
        (I) Remedial measures;
        (II) Required adoption and implementation of written, preventative policies or procedures;
        (III) A probationary period with provisions for monitoring the AMC;
        (IV) Monitoring and/or preapproval of AMC panel removals for a specified period of time;
        (V) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;
        (VI) Minimum of $1,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (E) 2nd Time Discipline Level 2--violations of the AMC Act or Board rules which evidence serious deficiencies will result in a final order which imposes one or more of the following:
      (i) A period of suspension;
      (ii) A revocation;
      (iii) Remedial measures;
      (iv) Required adoption and implementation of written, preventative policies or procedures;
      (v) A probationary period with provisions for monitoring the AMC;
      (vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;
      (vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;
      (viii) Minimum of $2,500 in administrative penalties per act or omission which constitutes a violation(s) of AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (F) 2nd Time Discipline Level 3--violations of the AMC Act or Board rules which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:
      (i) A period of suspension;
      (ii) A revocation;
      (iii) Remedial measures;
      (iv) Required adoption and implementation of written, preventative policies or procedures;
      (v) A probationary period with provisions for monitoring the AMC;
      (vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;
      (vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;
      (viii) Minimum of $4,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (G) 3rd Time Discipline Level 1--violations of the AMC Act or Board rules which evidence minor deficiencies will result in a final order which imposes one or more of the following:
      (i) A period of suspension;
      (ii) A revocation;
      (iii) Remedial measures;
      (iv) Required adoption and implementation of written, preventative policies or procedures;
      (v) A probationary period with provisions for monitoring the AMC;
      (vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;
      (vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;
      (viii) Minimum of $2,500 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (H) 3rd Time Discipline Level 2--violations of the AMC Act or Board rules which evidence serious deficiencies will result in a final order which imposes one or more of the following:
      (i) A period of suspension;
      (ii) A revocation;
      (iii) Remedial measures;
      (iv) Required adoption and implementation of written, preventative policies or procedures;
      (v) A probationary period with provisions for monitoring the AMC;
Cont'd...
(vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;
      (vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;
      (viii) Minimum of $4,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (I) 3rd Time Discipline Level 3--violations of the AMC Act or Board rules which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:
      (i) A revocation; and
      (ii) Minimum of $7,000 in administrative penalties per act or omission which constitutes a violation(s) of Board Rules, or the AMC Act; each day of a continuing violation is a separate violation.
    (J) 4th Time Discipline--violations of the AMC Act or Board rules will result in a final order which imposes one or more of the following:
      (i) A revocation; and
      (ii) $10,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or Board rules; each day of a continuing violation is a separate violation.
    (K) Unlicensed AMC activity will result in a final order which imposes a $10,000 in administrative penalties per unlicensed AMC activity; each day of a continuing violation is a separate violation.
  (4) In addition, staff may recommend any or all of the following:
    (A) Reducing or increasing the recommended sanction or administrative penalty for a complaint based on documented factors that support the deviation, including but not limited to those factors articulated under paragraph (2) of this subsection;
    (B) Probating all or a portion of any remedial measure, sanction, or administrative penalty for a period not to exceed three years;
    (C) Requiring additional reporting requirements;
    (D) Payment of costs expended by the Board associated with the investigation, and if applicable, a contested case, including legal fees and administrative costs; and
    (E) Such other recommendations, with documented support, as will achieve the purposes of the AMC Act or Board rules.
(n) The Board may order a person regulated by the Board to refund the amount paid by a consumer to the person for a service regulated by the Board.
(o) Agreed resolutions of complaint matters pursuant to Texas Occupations Code §1104.2081 must be signed by:
  (1) The Board Chair or if the Board Chair is unavailable or must recuse him or herself, the Board Chair's designee, whom shall be (in priority order) the Board Vice Chair, the Board Secretary, or another Board member;
  (2) Respondent;
  (3) A representative of the TALCB Division; and
  (4) The Executive Director or his or her designee.

Source Note: The provisions of this §159.204 adopted to be effective November 3, 2011, 36 TexReg 7320; amended to be effective December 14, 2014, 39 TexReg 9668; amended to be effective September 7, 2015, 40 TexReg 5789; amended to be effective June 9, 2019, 44 TexReg 2712; amended to be effective December 8, 2019, 44 TexReg 7539; amended to be effective November 25, 2021, 46 TexReg 7875; amended to be effective December 25, 2022, 47 TexReg 8272; amended to be effective December 3, 2023, 48 TexReg 6905