Commerce, Real Estate

Rule R162-150

Appraisal Management Companies

Notice of Proposed Rule

(Repeal)

DAR File No.: 33922
Filed: 08/12/2010 08:32:21 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Division proposes a new Rule R162-2e, to govern Appraisal Management Companies (AMCs). The existing provisions found in Rule R162-150 are incorporated into the new rule; therefore, this rule needs to be repealed. (DAR NOTE: The proposed new Rule R162-2e is DAR No. 33923 in this issue, September 1, 2010, of the Bulletin.)

Summary of the rule or change:

The rule is repealed in its entirety.

State statutory or constitutional authorization for this rule:

• Section 61-2e-103
• Section 61-2e-102
• Section 61-2e-305
• Section 61-2e-304

Anticipated cost or savings to:

the state budget:

The substantive provisions are incorporated into the new Rule R162-2e. The burden on the state remains what it was under this rule. The Division anticipates no impact to the state budget.

local governments:

Local governments neither register with the Division as AMCs nor oversee and enforce the rules governing AMCs. They are not affected by this rule, and its repeal will have no effect on their budgets.

small businesses:

Small AMC businesses remain obligated to adhere to the substance of this rule, as those substantive provisions are incorporated into the new Rule R162-2e. Small businesses will not experience any costs or savings by virtue of this rule being repealed.

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

This rule governs businesses. Persons other than businesses are not required to comply. The rule has never affected persons other than businesses, and its repeal will have no effect on those persons.

Compliance costs for affected persons:

The rule is repealed. No compliance is required. There are no compliance costs.

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

No fiscal impact to businesses is anticipated from this rule repeal, as a substitute rule amendment containing the substance of these provisions is also proposed by the Division.

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
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Jennie Jonsson at the above address, by phone at 801-530-6706, by FAX at 801-526-4387, 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:

10/01/2010

This rule may become effective on:

10/08/2010

Authorized by:

Deanna Sabey, Director

R162. Commerce, Real Estate.

[ R162-150. Appraisal Management Companies.

R162-150-1. Qualification for Registration or Renewal of Registration.

(1) The Division may not register or renew the registration of an appraisal management company that:

(a) fails to comply with any provision of Utah Code Title 61, Chapter 2e, "Appraisal Management Company Registration and Regulation Act";

(b) fails to comply with Sections R162-150-2 or R162-150-3; or

(c) fails to pay to the Division the fee required for registration.

(2) The Division shall schedule a hearing before the board for an appraisal management company that:

(a)(i) applies for registration or renewal of registration;

(ii) has a control person who discloses, or the Division finds through its own research, an issue that might affect the control person's moral character; and

(iii) the Division determines that the board should be aware of the issue; or

(b) fails to provide an adequate explanation for the appraisal management company's:

(i) plan to ensure the use of licensed appraisers in good standing;

(ii) plan to ensure the integrity of the appraisal review process; or

(iii) plan for record keeping.

 

R162-150-2. Employee Qualifications.

(1) An appraisal management company seeking registration shall demonstrate to the Division that each person who selects an appraiser or reviews an appraiser's work for the appraisal management company:

(a) is a licensed or certified appraiser in good standing; or

(b) has taken and passed, within 6 months after initial registration, the 15 hour national Uniform Standards of Professional Appraisal Practice (USPAP) course.

(2) An appraisal management company seeking renewal of the company's registration shall demonstrate to the Division that each person who selects an appraiser or reviews an appraiser's work for the appraisal management company:

(a) is a licensed or certified appraiser in good standing; or

(b) has completed the seven hour national USPAP update course.

 

R162-150-3. Unprofessional Conduct.

(1) An appraisal management company commits unprofessional conduct if the appraisal management company:

(a) fails to disclose to the appraiser:

(i) the total compensation paid to the appraiser who performs the real estate appraisal activity, disclosed as a dollar amount; and

(ii) the total compensation retained by the appraisal management company in connection with the real estate appraisal activity, disclosed as a dollar amount;

(b) fails to require the appraiser to disclose in the body of the appraisal report:

(i) the total compensation paid to the appraiser who performs the real estate appraisal activity, disclosed as a dollar amount; and

(ii) the total compensation retained by the appraisal management company in connection with the real estate appraisal activity, disclosed as a dollar amount;

(c) requires an appraiser to modify any aspect of the appraisal report unless the modification complies with Utah Code Ann. Section 61-2e-307;

(d) requires an appraiser to prepare an appraisal report if the appraiser, in the appraiser's own professional judgment, believes the appraiser does not have the necessary expertise for the specific geographic area;

(e) requires an appraiser to prepare an appraisal report under a time frame that the appraiser, in the appraiser's own professional judgment, believes does not afford the appraiser the ability to meet all the relevant legal and professional obligations;

(f) prohibits or inhibits communication between the appraiser and:

(i) the lender;

(ii) a real estate licensee; or

(iii) any other person from whom the appraiser, in the appraiser's own professional judgment, believes information would be relevant;

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

(i) USPAP; or

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

(h) makes any portion of the appraiser's fee or the appraisal management company'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; or

(i) 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.

(2) An appraisal management company commits unprofessional conduct and creates a violation by the appraiser of R162-107.1.6 if the appraisal management company requires the appraiser to:

(a) accept full payment; and

(b) remit a portion of the full payment back to the appraisal management company.

 

KEY: appraisal management company regulations

Date of Enactment or Last Substantive Amendment: November 13, 2009

Authorizing, and Implemented or Interpreted Law: 61-2e-102; 61-2e-103; 61-2e-304; 61-2e-305 ]