DAR File No. 38971

Commerce, Real Estate

Section R162-2e-401

Unprofessional Conduct

Notice of Proposed Rule

(Amendment)

DAR File No.: 38971
Filed: 11/21/2014 01:53:15 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to add to the appraisal management company (AMC) administrative rules for unprofessional conduct the failure by an AMC to pay an appraiser within 45 days of the completion of an appraisal assignment.

Summary of the rule or change:

This amendment adds to the AMC administrative rules for unprofessional conduct the failure by an AMC to pay an appraiser within 45 days of the completion of an appraisal assignment.

State statutory or constitutional authorization for this rule:

• Section 61-2e-103

Anticipated cost or savings to:

the state budget:

The proposed change requires AMCs to pay appraisers within 45 days of the completion of the appraisal assignment. Violations of this rule could result in enforcement action by the division against an AMC. The division has the staff and budget in place to administer this provision. It is not anticipated that the proposed amendment will affect those resources or result in any additional cost or savings to the state budget.

local governments:

The proposed change requires AMCs to pay appraisers within 45 days of the completion of the appraisal assignment. Local government is not required to administer this rule. Little or no impact to local government is anticipated from the proposed amendment.

small businesses:

The proposed change requires AMCs to pay appraisers within 45 days of the completion of the appraisal assignment. The only small businesses affected by this rule are possibly AMCs and appraisers who are accounted for under "Compliance Costs for Affected Persons" below. Otherwise, small business is not required to take any action as a result of this proposed amendment. Little or no fiscal impact to small business is expected from the proposed amendment.

persons other than small businesses, businesses, or local governmental entities:

The proposed change requires AMCs to pay appraisers within 45 days of the completion of the appraisal assignment. No persons other than small businesses, businesses, or local governments are affected by this rule. No fiscal impact to persons other than small businesses, businesses, or local governments is expected from the proposed amendment.

Compliance costs for affected persons:

The proposed change requires AMCs to pay appraisers within 45 days of the completion of the appraisal assignment. There is no compliance cost anticipated for affected persons. However, violations of this rule could result in enforcement action by the division against an AMC. If an AMC is suspected of violating this rule and the division takes enforcement action against the AMC, the AMC would have compliance costs from responding to the enforcement action. The amount of the compliance cost will vary from case to case depending on the extent of the enforcement action taken and the response by the AMC.

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

As stated in the rule analysis, this filing requires an AMC to pay an appraiser within 45 days of accepting a completed appraisal. Any AMC that historically has held payments for longer than 45 days will be required to adjust its business practices in order to comply. Any associated costs will vary and cannot be estimated.

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:

• Justin Barney at the above address, by phone at 801-530-6603, by FAX at , or by Internet E-mail at [email protected]

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:

01/14/2015

This rule may become effective on:

01/21/2015

Authorized by:

Jonathan Stewart, Director

R162. Commerce, Real Estate.

R162-2e. Appraisal Management Company Administrative Rules.

R162-2e-401. Unprofessional Conduct.

(1) An entity that is registered or required to be registered with the division as an AMC pursuant to Section 61-2e-201 commits unprofessional conduct if the entity:

(a) requires an appraiser to modify any aspect of the appraisal report, unless the modification complies with Section 61-2e-307;

(b) unless first prohibited by the client or applicable law, prohibits or inhibits an appraiser from contacting:

(i) the client;

(ii) a person licensed under Section 61-2c or Section 61-2f; or

(iii) any other person with whom the appraiser reasonably needs to communicate in order to obtain information necessary to complete a credible appraisal report;

(c) requires the appraiser to do anything that does not comply with:

(i) USPAP; or

(ii) assignment conditions and certifications required by the client;

(d) makes any portion of the appraiser's fee or the AMC's fee contingent on a favorable outcome, including but not limited to:

(i) a loan closing; or

(ii) a specific dollar amount being achieved by the appraiser in the appraisal report;

(e) requests, for the purpose of facilitating a mortgage loan transaction,

(i) a broker price opinion; or

(ii) any other real property price or value estimation that does not qualify as an appraisal;

(f) charges an appraiser:

(i) for a service not actually performed; or

(ii) for a fee or cost that:

(A) is not accurately disclosed pursuant to Subsection R162-2e-304(1)(a)(ii); or

(B) exceeds the actual cost of a service provided by a third party;

(g) fails to pay the appraiser's fee within 45 days of completion of the appraisal assignment;

[(g)](h) uses or retains an employee to complete an appraisal assignment without first disclosing to the client that the appraiser is an employee of the company, such that the company is acting in the capacity of an appraisal firm rather than as an AMC pursuant to Utah Code Subsection 61-2e-102(4); or

[(h)](i) when acting in the capacity of an AMC pursuant to Utah Code Subsection 61-2e-102(4), uses or retains an employee appraiser to complete an appraisal assignment.

(2) An AMC commits unprofessional conduct and creates a violation by the appraiser of R162-2g-502b(1)(f) if the AMC requires the appraiser to:

(a) accept full payment; and

(b) remit a portion of the full payment back to the AMC.

 

KEY: administrative proceedings, appraisal management company, conduct, registration

Date of Enactment or Last Substantive Amendment: [August 28, 2013]2015

Authorizing, and Implemented or Interpreted Law: 61-2e-102(4); 61-2e-103; 61-2e-307; 61-2e-305; 61-2e-402(1)