No. 27098 (Amendment): R162-106-8. Draft Reports

DAR File No.: 27098
Filed: 04/14/2004, 04:55
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Division of Real Estate investigators have observed an abuse of "draft reports" by some appraisers.

 

Summary of the rule or change:

This new section defines the conditions under which it is appropriate for an appraiser to release a "draft report" to a client. (DAR NOTE: The Division of Real Estate is planning to allow the previous filings on this section, an amendment published in the November 15, 2003, Bulletin, and the subsequent change in proposed rule published in the January 1, 2004, Bulletin, both under DAR No. 26709, lapse. The lapsed date is April 30, 2004.)

 

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 abuses of the concept of "draft reports." Therefore, eliminating the improper use of draft reports would 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 related to "State budget" above block 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 the 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:

In the interest of protecting the public from appraisers' improper use of draft reports, this rule amendment adopts standards regarding the release of such drafts to clients. The only foreseeable fiscal impact might be a positive one resulting from a reduced abuse of drafts, but that impact is undeterminable and dependent upon the number of appraisals at issue.

 

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:

06/01/2004

 

This rule may become effective on:

06/02/2004

 

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. One to Four Unit Residential Real Property. An appraiser may not release a draft report to a client in the appraisal of one to four unit residential real property.

106.8.2 An appraiser may release a draft report to a client in the appraisal of other than one to four unit residential real property if: a) the first page of the report prominently identifies the report 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

[August 27, 2003]2004

Notice of Continuation March 27, 2002

61-2b-27