No. 28666 (Amendment): R162-105-1. Scope of Authority  

  • DAR File No.: 28666
    Filed: 04/21/2006, 04:45
    Received by: NL

     

    RULE ANALYSIS

    Purpose of the rule or reason for the change:

    The Division investigators have realized that there is a loophole in the existing rule that would allow a person whose application for renewal has been denied for professional misconduct to go to work as a trainee for another appraiser. The Division also believes that a supervising appraiser should have a duty to refrain from employing as trainees parties whose appraiser licenses or certifications have been suspended for disciplinary reasons.

     

    Summary of the rule or change:

    A person whose application for renewal of a license or certification was denied would be ineligible to go to work for another appraiser as a trainee for five years after the denial of the person's application for renewal. The rule change would also prohibit an appraiser from employing as a trainee a person whose appraiser license has been suspended while that person's license is in suspended status.

     

    State statutory or constitutional authorization for this rule:

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

     

    Anticipated cost or savings to:

    the state budget:

    The rules on who may act as an appraisal trainee do not impact any State agency except the licensing agency for appraisers, which is the Division of Real Estate. These rule changes will not cost the Division of Real Estate any money. Prohibiting persons who have had licenses or certifications denied or suspended for disciplinary reasons from working as appraisal trainees may save the Division investigative costs in that these persons will not be able to commit additional bad acts in appraisals that would result in additional complaints that would have to be investigated by the Division. However, these potential savings cannot be estimated since it is unknown how many persons would be eliminated from acting as trainees because of this rule change.

     

    local governments:

    None--A rule precluding a person whose application for renewal of an appraiser license or certification has been denied from acting as an appraisal trainee has no effect on local government and therefore will result in neither costs nor savings for local government.

     

    other persons:

    The only persons affected by this rule change are appraisers and their trainees. This rule change will not result in savings to those parties. It may result in a very minimal cost increase for supervising appraisers since it would be prudent for them to check on whether an applicant for a trainee position is an appraiser whose renewal has been denied or whose license or certification has been suspended by the Division. However, this may be done at no charge by checking the licensee database on the Division's web site.

     

    Compliance costs for affected persons:

    As stated above, it would be prudent for a supervising appraiser to protect him or herself by checking on whether an applicant for a trainee position is an appraiser whose renewal has been denied or whose license or certification has been suspended by the Division. However, the increased cost of evaluating candidates should be minimal since this check may be done at no charge on the Division's web site.

     

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

    This rule filing clarifies existing standards. No fiscal impact to businesses is anticipated beyond those addressed in the rule summary. Francine A. Giani, Executive Director

     

    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 swismer@utah.gov

     

    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:

    06/14/2006

     

    This rule may become effective on:

    06/15/2006

     

    Authorized by:

    Derek Miller, Director

     

     

    RULE TEXT

    R162. Commerce, Real Estate.

    R162-105. Scope of Authority.

    R162-105-1. Scope of Authority.

    105.1 Transaction value. "Transaction value" means:

    105.1.1 For loans or other extensions of credit, the amount of the loan or extension of credit;

    105.1.2 For sales, leases, purchases, and investments in or exchanges of real property, the market value of the real property interest involved; and

    105.1.3 For the pooling of loans or interests in real property for resale or purchase, the amount of the loan or market value of the real property calculated with respect to each such loan or interest in real property.

    105.2 State-Licensed Appraisers. In federally-related transactions, the Utah Real Estate Appraiser Licensing Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and related federal regulations allow State-Licensed Appraisers to perform the appraisal of non-complex one to four residential units having a transaction value of less than $1,000,000 and complex one to four residential units having a transaction value of less than $250,000.

    105.2.1 Subject to the transaction value limits in Section 105.2, State-Licensed Appraisers may also perform appraisals in federally-related transactions of vacant or unimproved land that is utilized for one to four family purposes, or for which the highest and best use is 1-4 family purposes, so long as net income capitalization analysis is not required by the terms of the assignment.

    105.2.2 State-Licensed Appraisers may not perform appraisals of subdivisions in federally-related transactions for which a development analysis/appraisal is necessary or for which discounted cash flow analysis is required by the terms of the assignment.

    105.3 Trainees.

    105.3.1 For the purposes of these rules, "trainee" means a person who is working under the direct supervision of a State-Licensed or State-Certified Appraiser to earn points for licensure.

    105.3.2 Appraisal-related duties by unlicensed persons. Unlicensed persons who have not qualified as trainees as provided in Subsection 105.3.3 may perform only clerical duties in connection with an appraisal. For the purposes of this rule, appraisal-related clerical duties include typing an appraiser's research notes or an appraiser's report, taking photographs of properties, and obtaining copies of public records. Only those persons who have properly qualified as trainees as provided in Subsection 105.3.3 may perform the following appraisal-related duties: participating in property inspections, measuring or assisting in the measurement of properties, performing appraisal-related calculations, participating in the selection of comparables for an appraisal assignment, making adjustments to comparables, and drafting or assisting in the drafting of an appraisal report. The supervising appraiser shall be responsible to determine the point at which a trainee is competent to participate in each of these activities.

    105.3.2.1 A trainee may not solicit an assignment or accept an assignment on behalf of anyone other than the trainee's supervisor or the supervisor's appraisal firm. All engagement letters shall be addressed to the supervisor or the supervisor's appraisal firm, not to the trainee. In all appraisal assignments, the supervisor shall delegate only such duties as are appropriate to the trainee and shall directly supervise the trainee in the performance of those duties.

    105.3.3 In order to become a trainee, the person must have successfully completed 75 classroom hours of State-approved education in subjects related to real estate appraisal, including the Uniform Standards of Professional Appraisal Practice (USPAP), must have passed the final examination in the USPAP course, and must file a notification with the Division as provided in Subsection 105.3.3.1. The education required by this Subsection must have been completed within the 5 years preceding the filing of the notification required by Subsection 105.3.3.1.

    105.3.3.1 Trainee Notification. Prior to performing any of the appraisal-related activities for which points will be claimed toward licensure, a trainee must file with the Division a notification in the form required by the Division. In addition to any identifying information about the trainee required by the Division, the notification shall contain the name and business address of the appraiser(s) who will supervise the trainee in the performance of the appraisal-related duties, and shall be signed by the supervisor. The notification shall also contain the course names, course provider names, and course completion dates for the 75 hours of education required by Subsection 105.3.3. The original course completion certificates shall be submitted to the Division with the notification.

    105.3.3.2 Except as provided in Subsection 105.3.3.3, no experience points will be granted toward licensure for trainee experience that is claimed to have been earned prior to the date the notification was filed with the Division.

    105.3.3.3 Until five years after the effective date of this rule, points that were earned prior to the effective date of this rule may be claimed and will be awarded to applicants who are able to document those points on the forms required by the Division, notwithstanding the fact that the points were earned prior to the date a trainee notification was filed with the Division.

    105.3.4 Supervising Appraisers. A trainee may have more than one supervising appraiser. Effective January 1, 2008, a supervising appraiser may supervise a maximum of three trainees at one time.

    105.3.5 Residential Property Inspections. A trainee, including a trainee who was previously a state-registered appraiser, must be accompanied by a supervising State-Licensed Appraiser, State-Certified Residential Appraiser, or State-Certified General Appraiser on all inspections of residential property until the trainee has performed 100 inspections of residential properties in which both the interior and the exterior of the properties are inspected. All reports in appraisals in which a trainee participated in the inspection of the subject property shall comply with the requirements of Section 106.9.

    105.3.6 Non-Residential Property Inspections. A trainee, including a trainee who was previously a state-registered appraiser, must be accompanied by a supervising State-Certified General Appraiser on all inspections of non-residential property until the trainee has performed 20 inspections of non-residential properties in which both the interior and the exterior of the properties are inspected. All reports in appraisals in which a trainee participated in the inspection of the subject property shall comply with the requirements of Section 106.9.

    105.3.7 Points for Licensure. A trainee may accumulate experience points for each duty listed below at the rate of 33.3% of the total points awarded from the Appraisal Experience Points Schedule under Section 104-18.1 or 104-18.2, not to exceed the maximum number of points awarded for each property. Trainee experience must be earned in at least three of the following categories. No more than one-third of the experience points submitted toward licensure may come from any one of the following categories:

    (a) participation in selecting comparables for an appraisal assignment - 33.3% of total points

    (b) participation in making adjustments to comparables - 33.3% of total points

    (c) drafting appraisal reports - 33.3% of total points

    (d) as provided in Sections 105.3.5 and 105.3.6, inspecting a property that is the subject of an appraisal or that may be used as a comparable in an appraisal, and measuring the property - 33.3% of total points as long as both an interior and exterior inspection of the property is performed. No points will be granted for inspections that do not include both an interior and an exterior inspection.

    105.3.8 Credit will be given for appraisal experience earned only within five years immediately preceding the licensure or certification application. Applicants who believe the Experience Points Schedules do not adequately reflect their experience may refer to Section 104-17.

    105.3.9 All trainees are prohibited from signing an appraisal report or discussing an appraisal assignment with anyone other than the appraiser responsible for the assignment, state enforcement agencies and such third parties as may be authorized by due process of law, or a duly authorized professional peer review committee.

    105.3.10 A state-licensed or state-certified appraiser who supervises a trainee shall be responsible for the training and direct supervision of the trainee.

    105.3.10.1 Direct supervision shall consist of critical observation and direction of all aspects of the appraisal process and accepting full responsibility for the appraisal and the contents of the appraisal report. The supervising appraiser shall be responsible to personally inspect each residential property that is appraised with a trainee until the trainee has performed 100 residential inspections as provided in Subsection 105.3.5 and 20 non-residential inspections as provided in Subsection 105.3.6. The supervising appraiser must actively supervise those inspections and the resulting appraisals.

    105.3.11 A supervising appraiser shall require the trainee to maintain a log in a form satisfactory to the Board which shall contain, at a minimum, the following information for each appraisal.

    (a) Type of property;

    (b) Address of appraised property;

    (c) Description of work performed;

    (d) Number of work hours;

    (e) Signature and state license/certification number of the supervising appraiser; and

    (f) Client name and address.

    105.3.12 The trainee shall maintain a separate appraisal log for each supervising appraiser.

    105.4. Trainee Status after Revocation, Surrender, Denial, or Suspension of License or Certification.

    105.4.1 Trainee Status after Revocation, [or ]Surrender, or Denial of License or Certification. Unless otherwise ordered by the Board, an appraiser whose appraiser certification or license has been revoked by the Board, whose application for renewal of a certification or license has been denied by the Board, or who has surrendered a certification or license as a result of an investigation by the Division, may not serve as a trainee for a period of five years after the date of the revocation, denial, or surrender, nor may a licensed or certified appraiser employ or supervise the former appraiser [him during that period] in the performance of the activities permitted trainees for that same period of time.

    105.4.2 Trainee Status while License or Certification is Suspended. Unless otherwise ordered by the Board, any appraiser whose appraiser license or certificate has been suspended by the Board as a result of an investigation by the Division may not serve as a trainee during the period of suspension. While an appraiser is suspended, [nor may ]a licensed or certified appraiser may not employ or supervise the suspended appraiser[him during that period] in the performance of the activities permitted trainees.

     

    KEY: real estate appraisals

    Date of Enactment or Last Substantive Amendment: [September 29, 2005]2006

    Notice of Continuation: January 13, 2004

    Authorizing, and Implemented or Interpreted Law: 61-2b-6(1)(l)

     

     

     

     

Document Information

Effective Date:
6/15/2006
Publication Date:
05/15/2006
Type:
Notices of Rule Effective Dates
Filed Date:
04/21/2006
Agencies:
Commerce,Real Estate
Rulemaking Authority:

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

Authorized By:
Derek Miller, Director
DAR File No.:
28666
Related Chapter/Rule NO.: (1)
R162-105-1. Scope of Authority.