No. 26709: R162-106-8. Draft Reports

DAR File No.: 26709
Filed: 12/04/2003, 09:38
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

Division of Real Estate investigators have observed an abuse of "draft reports" by some appraisers, which led to a proposed rule defining the conditions under which it is appropriate for an appraiser to release a "draft report" to a client. After considering public comment received on the proposed rule, the Utah Appraiser Licensing and Certification Board has decided to rewrite the proposed rule.

 

Summary of the rule or change:

The rule defines "draft report" and provides the circumstances under which a draft report may be released to a client. The change from the last version of the proposed rule to this one is that there will be no distinction between draft reports in residential property appraisal and draft reports in non-residential property appraisal. Also, draft reports will be required to be signed by the appraiser. (DAR NOTE: This change in proposed rule has been filed to make additional changes to a proposed amendment that was published in the November 15, 2003, issue of the Utah State Bulletin, on page 18. Underlining in the rule below indicates text that has been added since the publication of the proposed rule mentioned above; strike-out indicates text that has been deleted. You must view the change in proposed rule and the proposed amendment together to understand all of the changes that will be enforceable should the agency make this rule effective.)

 

State statutory or constitutional authorization for this rule:

Subsection 61-2b-6(1)(l)

 

Anticipated cost or savings to:

the state budget:

None--Presumably the State and the appraisers it hires would not engage in the abuse of "draft reports" that this rule is designed to prevent. Therefore, the rule should not increase the State's cost of obtaining appraisal services. While no direct, measurable savings to State government is anticipated if the abuse of draft reports is lessened, prevention of fraud in mortgage lending should have a positive impact on the business climate in Utah and might therefore positively impact the State budget in some indirect way.

 

local governments:

None--The comments in the under "State budget" above apply equally to local government.

 

other persons:

None--This rule should not increase the cost to any person of obtaining an appraisal. While there would be no direct, measurable savings to other persons if the abuse of "draft reports" is lessened, less fraud in mortgage lending in Utah should make a better business climate in Utah and therefore might indirectly benefit other persons in some way.

 

Compliance costs for affected persons:

None. The cost of providing appraisal services should not change as a result of this rule. The rule simply defines conditions under which an appraiser may release a copy of a work in progress to a client.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule amendment adds a provision regulating when draft reports by appraisers may be released to clients. This measure is intended to protect the public from improper use of draft reports by appraisers and to prevent fraud. A positive fiscal impact to businesses is therefore anticipated by this rule change. However, it is impossible to predict the amount of that fiscal impact.

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Real Estate
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY UT 84111-2316

 

Direct questions regarding this rule to:

Shelley Wismer at the above address, by phone at 801-530-6761, by FAX at 801-530-6749, or by Internet E-mail at [e-mail]

 

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/02/2004

 

This rule may become effective on:

02/03/2004

 

Authorized by:

Dexter Bell, Director

 

 

RULE TEXT

R162. Commerce, Real Estate.

R162-106. Professional Conduct.

R162-106-8. Draft Reports.

For the purpose of this rule, a "draft report" is defined as an appraisal report that is a work in progress and that has not yet been finished by the Appraiser.

[ 106.8.1. Residential Property Appraisal. An appraiser may not release a draft report to a client in the appraisal of residential property unless: a) the property consists of more than four units; b) the first page of the report prominently identifies it as a draft; and c) the draft report has not been signed by the appraiser but complies with USPAP in all other respects.

106.8.2 Non-Residential Property Appraisal. An appraiser may not release a draft report to a client in the appraisal of non-residential property unless: a) the first page of the report prominently identifies it as a draft; and b) the draft report has not been signed by the appraiser but complies with USPAP in all other respects.

] 106.8.1. An appraiser may not release a draft report to a client unless: a) the first page of the report prominently identifies it as a draft; b) the draft report has been signed by the appraiser; and c) the appraiser complies with USPAP in the preparation of the draft report.

 

KEY: real estate appraisals, conduct

[2003]2004

Notice of Continuation March 27, 2002

61-2b-27