Commerce, Real Estate

Rule R162-105

Scope of Authority

Notice of Proposed Rule

(Repeal)

DAR File No.: 34945
Filed: 06/16/2011 11:47:35 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The substantive provisions are incorporated into a new rule, R162-2g. (DAR NOTE: The proposed new rule, R162-2g, was published in the July 1, 2011, issue of the Utah State Bulletin under DAR No. 34917.)

Summary of the rule or change:

The rule is repealed in its entirety.

State statutory or constitutional authorization for this rule:

• Subsection 61-2g-201(2)(h)

Anticipated cost or savings to:

the state budget:

The substantive provisions of this rule are incorporated into a new rule, R162-2g. No changes are proposed that are anticipated to have a fiscal impact to the state.

local governments:

Local government is not subject to the appraiser administrative rules. No fiscal impact to local government is anticipated.

small businesses:

The substantive provisions of this rule are incorporated into a new rule, R162-2g. No changes are proposed that are anticipated to have a fiscal impact on small businesses.

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

The substantive provisions of this rule are incorporated into a new rule, R162-2g. No changes are proposed that are anticipated to have a fiscal impact on affected persons.

Compliance costs for affected persons:

The rule is repealed. No compliance is required.

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 new rule 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 jjonsson@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:

08/15/2011

This rule may become effective on:

08/22/2011

Authorized by:

Deanna Sabey, Director

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-Certified Appraiser to earn hours for licensure.

105.3.2 Appraisal-related duties by unlicensed persons. Unlicensed persons who have not qualified as trainees as provided in Subsection 110 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 110 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.

105.3.4 Supervising Appraisers. A trainee may have more than one state-certified supervising appraiser. 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, shall be accompanied by a supervising State-Certified 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, shall 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 Hours for Licensure. A trainee may accumulate experience hours for each duty listed below with the respective percentages, not to exceed the maximum number of hours awarded by the Appraisal Experience Hour Schedule under Sections 104-15.1, 104-15.2, and 104.15.3. No more than one-third of the experience hours submitted toward licensure may come from any one of the following categories:

(a) participation in highest and best use analysis - 10% of total hours;

(b) participation in neighborhood description and analysis - 10% of total hours;

(c) as provided in Sections 105.3.5 and 105.3.6, inspecting the interior and exterior, including measurement of the exterior of a property that is the subject of an appraisal and inspection of the exterior of a property that may be used as a comparable in an appraisal. No hours will be granted for inspections that do not include both an interior and exterior inspection of the subject property - 20% of total hours;

(d) participation in land value estimate - 20% of total hours;

(e) participation in sales comparison property selection and analysis - 30% of total hours;

(f) participation in cost analysis - 20% of total hours;

(g) participation in income analysis - 30% of total hours;

(h) participation in the final reconciliation of value - 10% of total hours;

(i) participation in report preparation - 20% of total hours.

105.3.8 Credit will be given for appraisal experience earned only within five years immediately preceding the licensure or certification application.

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-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 shall actively supervise those inspections and the resulting appraisals. In addition, the supervising appraiser shall personally inspect all property when the appraisal report scope of work or certification requires appraiser inspection.

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) file number;

(b) report date;

(c) subject address;

(d) client name;

(e) type of property;

(f) report form number or type; and

(g) number of work hours.

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, 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 four years after the date of the revocation, denial, or surrender, nor may a licensed or certified appraiser employ or supervise the former appraiser 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, a licensed or certified appraiser may not employ or supervise the suspended appraiser in the performance of the activities permitted trainees.

 

KEY: real estate appraisals

Date of Enactment or Last Substantive Amendment: January 27, 2010

Notice of Continuation: November 10, 2008

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