DAR File No. 37750
This rule was published in the July 15, 2013, issue (Vol. 2013, No. 14) of the Utah State Bulletin.
Commerce, Real Estate
Rule R162-2g
Real Estate Appraiser Licensing and Certification Administrative Rules
Notice of Proposed Rule
(Amendment)
DAR File No.: 37750
Filed: 06/17/2013 08:46:07 AM
RULE ANALYSIS
Purpose of the rule or reason for the change:
The purpose of this amendment is to update and refine the requirements for school, course, and instructor certification, as well as the associated standards of conduct.
Summary of the rule or change:
The changes: clarify the information that a school must provide to obtain certification; require a school to provide the students with a criminal history disclosure statement; specify the time frame that a prelicense course must be submitted to the division for certification before teaching the course; require prelicense course providers to upload information with the division after a course is completed; eliminate the requirement for a prelicense instructor to pass an examination; increase the time frame during which a prelicense instructor may reinstate an expired instructor certification; conform the certified prelicense instructor reporting requirements to the statutory standards in Subsection 61-2g-306(3); and add new school affirmative duties and prohibited conduct.
State statutory or constitutional authorization for this rule:
- Subsection 61-2g-201(2)(h)
- Subsection 61-2g-307(3)
Anticipated cost or savings to:
the state budget:
This filing does not create any new programs that the Division will be required to implement. The Division already has the staff and budget necessary to review applications for school, course, and instructor certification, and the proposed amendments will not increase the costs of this review. Therefore, no fiscal impact to the state budget is anticipated.
local governments:
Local governments are not required to comply with or enforce the rules governing the appraisal industry. Therefore, no fiscal impact to local government will result from this filing.
small businesses:
Schools and instructors will have little or no cost in supplying additional information as part of the course certification because the information is readily available and the criminal history disclosure statement requirement can be met by creating a simple form. Prelicense course providers may incur minor costs in having to upload course completion information with the division.
persons other than small businesses, businesses, or local governmental entities:
Schools and instructors will have little or no cost in supplying additional information as part of the course certification because the information is readily available and the criminal history disclosure statement requirement can be met by creating a simple form. Prelicense course providers may incur minor costs in having to upload course completion information with the division.
Compliance costs for affected persons:
Schools and instructors will have little or no cost in supplying additional information as part of the course certification because the information is readily available and the criminal history disclosure statement requirement can be met by creating a simple form. Prelicense course providers may incur minor costs in having to upload course completion information with the division.
Comments by the department head on the fiscal impact the rule may have on businesses:
As stated in the rule analysis, businesses that provide appraiser prelicensing education might experience minimal costs if they find it necessary to adjust their internal operations in order to upload to the Division course completion information. There is no fee associated with the upload itself. Most education providers are already completing course uploads for continuing education courses; these providers should not incur any new costs.
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:
CommerceReal Estate
HEBER M WELLS BLDG
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:
08/14/2013
This rule may become effective on:
08/21/2013
Authorized by:
Jonathan Stewart, Director
RULE TEXT
R162. Commerce, Real Estate.
R162-2g. Real Estate Appraiser Licensing and Certification Administrative Rules.
R162-2g-102. Definitions.
(1) "Affiliation" means an ongoing business association:
(a) between:
(i) two individuals registered, licensed, or certified under Section 61-2g; or
(ii) an individual registered, licensed, or certified under Section 61-2g and:
(A) an appraisal entity; or
(B) a government agency;
(b) for the purpose of providing an appraisal service; and
(c) regardless of whether an employment relationship exists between the parties.
(2) The acronym "AQB" stands for the Appraiser Qualifications Board of the Appraisal Foundation.
(3) "Board" means the Utah Real Estate Appraiser Licensing and Certification Board.
(4) "Business day" means a day other than:
(a) a Saturday;
(b) a Sunday; or
(c) a federal or state holiday.
(5) "Classification" means the type of license or certification held by an appraiser.
(6) "Day" means calendar day unless specified as "business day."
(7) "Desk review" means review of an appraisal:
(a) including verification of the data; but
(b) not including a physical inspection of the property.
(8) "Distance education" means an education process based on the geographical separation of student and instructor, including:
(a) computer conferencing;
(b) satellite teleconferencing;
(c) interactive audio;
(d) interactive computer software;
(e) Internet-based instruction; and
(f) other interactive online courses.
(9) "Division" means the Division of Real Estate of the Department of Commerce.
(10) "Draft report" means an appraisal report that is distributed prior to being completed, as provided in Subsection R162-2g-502b(1).
(11) "Entity" means:
(a) a corporation;
(b) a partnership;
(c) a sole proprietorship;
(d) a limited liability company;
(e) another business entity; or
(f) a subsidiary or unit of an entity described in this Subsection (11).
(12) "Field review" means review of an appraisal, including:
(a) a physical inspection of the property; and
(b) verification of the data.
(13) "Non-certified education" means a continuing education course offered outside of Utah, but for which a licensee may apply for credit pursuant to R162-2g-307c(4).
(14)[(13)] "Person" means an individual or an
entity.
(15)[(14)] "Reinstatement" means renewing a
license or certification for an additional period after its
expiration date has passed, but prior to 12 months after the
expiration date.
(16)[(15)] The acronym "RELMS" stands for
Real Estate Licensing and Management System, which is the online
database through which individuals registered, licensed, or
certified under these rules must submit certain information to the
division.
(17)[(16)] "Renewal" means reissuing a
license or certification upon its expiration for an additional
period.
(18)[(17)] "School" means:
(a) an accredited college, university, junior college, or community college;
(b) any state or federal agency or commission;
(c) a nationally recognized real estate appraisal or real estate related organization, society, institute, or association; or
(d) any school or organization approved by the board.
(19)[(18)] "School director" means an
authorized individual in charge of the educational program at a
school.
(20)[(19)] "Trainee" means a person who is
working under the direct supervision of a state-certified
residential appraiser or a state-certified general appraiser to
earn experience hours for licensure, and who meets the requirements
of Subsection R162-2g-302.
(21)[(20)] "Transaction value" means:
(a) for loans or other extensions of credit, the amount of the loan or extension of credit;
(b) for sales, leases, purchases, and investments in, or exchanges of, real property, the market value of the real property interest involved; and
(c) 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.
(22)[(21)] The acronym "USPAP" stands for the
current edition of the Uniform Standards of Professional Appraisal
Practice published by the Appraisal Foundation.
R162-2g-307a. School Certification.
(1) Application. A school requesting certification shall:
(a) submit an application form as prescribed by the division, including:
(i) name, telephone number, email address, and address of:
(A) the school;
(B) the school director; and
(C) all owners of the school; and
(ii) as to each school director or owner, disclosure of criminal history and adverse regulatory actions;
(b) provide a description of:
(i) the type of school; and
(ii) the school's physical
facilities;[ and]
(c) provide a statement outlining the:
[(i) days, times and locations of classes;
](i[i]) number of quizzes and examinations in each
course offered;
(ii[i]) grading system, including methods of testing
and standards of grading;
(
iii[v]) requirements for attendance; and
( iv) school's refund policy.
(2) Standards for operation.
(a) All courses shall be taught in an appropriate classroom facility and not in a private residence, except for a course approved for distance education.
(b) A school shall teach the approved course of study as outlined in the state-approved outline.
(c) At the time of registration, a school shall provide to each student:
(i) the statement described in this
Subsection (1)(c);[ and]
(ii) a copy of the qualifying
questionnaire that the student will be required by the division to
answer as part of the pre-licensing or precertification
examination[.]; and
(iii) a criminal history disclosure statement.
(d) A school shall require each student to attend 100% of the scheduled class time in order to earn credit for the course.
(e)(i) A school may not award credit to any student who fails the final examination.
(ii) A student who fails a school final examination must wait three days before retesting and may not retake the same final examination.
(iii) A student who fails a final examination a second time must wait two weeks before retesting and may not retake either exam that the student previously failed.
(iv) A student who fails a final exam a third time shall fail the course.
(f) A school may not allow a student to challenge a course or any part of a course by taking an exam in lieu of attendance.
(g) Credit hours.
(i) For a course that is taught outside of a college or university setting, one credit hour may be awarded for 50 minutes of instruction within a 60-minute period, allowing for a ten-minute break.
(ii) For a course that is taught in a college or university setting:
(A) one quarter hour is equivalent to 10 credit hours; and
(B) one semester hour is equivalent to 15 credit hours.
(iii) A school may not award more than eight credit hours per day per student.
(3) A school shall report to the division within 10 calendar days of:
(a) any change in the information provided pursuant to this Subsection (1)(a)(i); and
(b) a school director or owner being convicted, or entering a plea in abeyance or diversion agreement, as to a criminal offense, excluding class C misdemeanors.
(4)(a) A school certification is valid for two years from the date of issuance.
(b) To renew a school certification, an individual shall, prior to the date of expiration:
(i) submit a properly completed application as provided by the division; and
(ii) pay a nonrefundable applicable fee.
R162-2g-307b. Pre-licensing Course Certification.
(1) To certify a pre-licensing course, an applicant shall, at least 30 days prior to the course being taught, submit a completed application as required by the division, including:
[(a) submit a completed application form as prescribed by
the division;
](a)[(b) provide] a course outline, including:
(i) a description of the course;
(ii) the length of time to be spent on each subject area, broken into segments of no more than 30 minutes each; and
(iii) three to five learning objectives for every three hours;
(b) [(c) describe]a description of any method of instruction that will be used
other than lecture method, including:
(i) webinar;
(ii) satellite broadcast; or
(iii) other form of distance education;
(c) [(d) provide] copies of at least three final
examinations administered in the course and the answer keys that
will be used to determine if a student passes the course;
(d) [(e) explain] the school procedure for maintaining
the security of the final exams and answer keys;
(e) [(f) list] the titles, authors, and publishers of
all required textbooks;
(f)[(g)](i) [list] the instructor(s) who will teach each class;
and
(ii) [provide] evidence that each instructor is:
(A) certified by the division;
(B) qualified to serve as a guest lecturer; or
(C) a college or university faculty member who has academic training or appraisal experience satisfactory to the division and the board;
[(h) list the days, times, and location of classes;
and
](g) [(i) pay] a nonrefundable applicable fee[.]; and
(h) a signed statement agreeing that the course provider will, within 10 business days of completing the class, upload to the division the following information:
(i) course name;
(ii) course certificate number assigned by the division;
(iii) date the course was taught;
(iv) number of credit hours; and
(v) name and license number of each student receiving education credit.
(2) Standards for approval of traditional classroom courses. Each course shall:
(a) meet the minimum standards set forth in the state-approved course outline governing the course, including minimum hourly requirements;
(b) be approved through the AQB course approval program;
(c) allow a maximum of 10% of the required class time for testing, including review test and final examination;
(d) use texts, workbooks, supplement pamphlets, and other materials that are appropriate and current in their application to the required course outline.
(3) Standards for approval of distance education
(a) A distance education course shall:
(i) comply with this Subsection (2);
(ii) provide interaction between the student and instructor;
(iii) include a written examination personally proctored by an official approved by the presenting entity;
(iv) meet the course delivery requirements established by the AQB and the International Distance Education Certification Center; and
(v) offer at least 15 credit hours.
(b) A distance education course offered by a college or university may be deemed acceptable to meet the credit hour requirement if the course content is approved by:
(i) the AQB;
(ii) a state licensing jurisdiction; or
(iii) a college or university that:
(A) offers distance education programs in other disciplines; and
(B) is approved or accredited by:
(I) the Commission on Colleges;
(II) a regional or national accreditation association; or
(III) an accrediting agency that is recognized by the United States Secretary of Education.
(4) Within 10 business days after the occurrence of any material change in a course that could affect approval, the school shall give the division written notice of the change.
(5) A course certification is valid for no more than 24 months.
(6) Credit for non-certified pre-licensing education.
(a) Division certification is not required for a pre-licensing course that is offered by a school, as defined in Subsection R162-2g-102(17) as long as:
(i) the course content:
(A) meets the minimum standards set forth in the Utah state-approved course outline; and
(B) is approved by the AQB course approval program;
(ii) the course provides at least 15 credit hours, including examination(s);
(iii) a closed-book, closed-note final examination is administered at the end of each course;
(iv) students are not allowed to earn credit from the course provider by challenge examination without first attending the course;
(v) credit is not awarded for duplicate or highly comparable classes;
(vi) where multiple classes are offered, they represent a progression in a student's knowledge; and
(vii) in order to receive credit, a student is required to:
(A) attend 100% of the scheduled class hours;
(B) complete all required exercises and assignments; and
(C) pass the course final examination.
(b) Hourly credit for a course taken from a professional appraisal organization shall be granted according to the division approved list.
(c) An applicant who wishes to be awarded credit for non-certified pre-licensing education shall:
(i) provide to the division a list of the cours(es) taken, including:
(A) course title(s);
(B) name(s) of the sponsoring organization(s);
(C) number of classroom hours completed;
(D) date(s) of course completion; and
(E) evidence that the cours(es) meet the requirements of:
(I) the AQB; and
(II) if distance education, the International Distance Education Certification Center;
(ii) request review of the course by the division and board;
(iii) establish that the criteria outlined in this Subsection (6)(a) are met;
(iv) attest on a notarized affidavit that the courses have been completed as documented; and
(v) if requested by the division, provide proof of completion of the courses in the form of certificates, transcripts, report cards, letters of verification, or similar proof.
R162-2g-307d. Instructor Certification for Pre-licensing Education.
(1) To certify as a pre-licensing education instructor, an individual shall:
(a) evidence that the applicant meets the character and competency requirements outlined in Subsection R162-2g-302(2)-(3);
(b) submit a completed application as provided by the division;
(c) demonstrate knowledge of the subject matter to be taught as evidenced by:
(i) a minimum of five years active experience in appraising;
(ii) college or other appropriate courses specific to the topic proposed to be taught; or
(iii) other experience, education, or credentials acceptable to the board;
[(d) evidence having passed an examination designed to test
knowledge of the subject matter proposed to be taught;
](d)[(e)] if the individual proposes to teach a course
in USPAP, evidence that the individual is an AQB-certified USPAP
instructor; and
(e)[(f)] pay a nonrefundable application fee.
(2) A pre-licensing instructor certification is valid for 24 months from the date of issuance.
(3) To renew a pre-licensing instructor certification, an individual shall:
(a) submit a completed application, as provided by the division;
(b) evidence having taught at least 20 hours of in-class instruction in certified course(s) during the preceding term of certification;
(c) evidence having attended a real estate instructor development workshop sponsored or approved by the division during the preceding two years; and
(d) pay a nonrefundable application fee.
(4)(a) To reinstate an expired pre-licensing instructor certification within 30 days following the expiration date, an individual shall:
(i) comply with this Subsection (3); and
(ii) pay a nonrefundable late fee.
(b) To reinstate an expired pre-licensing
instructor certification after 30 days and within
six[three] months following the expiration date, an
individual shall:
(i) comply with this Subsection (3);
(ii) pay a nonrefundable reinstatement fee; and
(iii) submit proof of having completed six classroom hours of education related to real estate appraisal or teaching techniques.
(c) After a pre-licensing instructor
certification has been expired for
six[three] months, an individual is required to apply
as an original applicant and obtain a new certification.
(5) A certified instructor shall
comply with the reporting requirements of Section
61-2g-306(3).[inform the division within 10 calendar days
of:]
[(a) being convicted for a criminal offense, with the
exception of a class C misdemeanor; or
(b) entering a plea in abeyance, diversion agreement, or
other agreement that holds a criminal charge in suspense, except
as to a class C misdemeanor.
]
R162-2g-502a. Standards of Conduct and Practice.
(1) Affirmative duties in general. A person registered, licensed, or certified by the division shall:
(a) if employing an unlicensed assistant who is not registered as a trainee pursuant to Subsection R162-2g-302:
(i) actively supervise the unlicensed assistant; and
(ii) ensure that the assistant performs only clerical duties, including:
(A) typing research notes or reports completed by a trainee or an appraiser;
(B) taking photographs of properties; and
(C) obtaining copies of public records;
(b)(i) except as provided in this Subsection (2)(a), comply with the current edition of USPAP; and
(ii) observe the advisory opinions of USPAP;
(c) in order to authorize another individual to sign an appraisal report on behalf of the individual who completes the report:
(i) grant authority to the signer in writing;
(ii) limit the signing authority to a specific property address;
(iii) explicitly disclose within the appraisal report that the signer is authorized by the appraiser to sign the report on the appraiser's behalf;
(iv) attach a copy of the written permission required pursuant to this Subsection (1)(c)(i) to the report; and
(v) ensure that the signer signs the appraiser's name, followed by the word "by," and then followed by the signer's own name;
(d) if using a digital signature in place of a handwritten signature, ensure that:
(i) the software program that generates the digital signature has a security feature; and
(ii) no one other than the appraiser has control of the signature;
(e) retain a photocopy or other exact copy of each report as it is provided to the client, including the appraiser's signature;
(f) analyze and report the sales and listing history of the subject property for the three years preceding the appraisal if such information is available to the appraiser from a multiple listing service, listing agent(s), property owner, or other verifiable source(s);
(g)(i) include in each appraisal report a statement indicating whether or not the subject property was inspected as part of the appraisal process; and
(ii) if any inspections were done, include the following information concerning each inspection:
(A) the names of all appraisers and trainees who participated in the inspection;
(B) whether the inspection was an exterior inspection only or both an exterior and an interior inspection; and
(C) the date that the inspection was performed; and
(h) unless Subsection (2)(b) applies, respond within ten business days to division notification:
(i) of a complaint against the individual; or
(ii) that information is needed from the individual.
(2) Exceptions.
(a) An individual is exempt from complying with all provisions of USPAP when acting in an official capacity as:
(i) a division staff member or employee;
(ii) a member of the experience review committee as appointed and approved by the board;
(iii) a member of the technical review panel as appointed and approved by the board;
(iv) a hearing officer;
(v) a member of a county board of equalization;
(vi) an administrative law judge;
(vii) a member of the Utah State Tax Commission; or
(viii) a member of the board.
(b) If a deadline for response under this Subsection (1)(h) falls on a day when the division is closed, the deadline shall be extended to the next business day.
(3) A trainee shall:
(a) using forms provided by the division, maintain a separate log of experience hours for each supervising appraiser with whom the trainee works; and
(b) include in each log the following information for each appraisal:
(i) file number;
(ii) report date;
(iii) subject address;
(iv) client name;
(v) type of property;
(vi) report form number or type;
(vii) number of work hours;
(viii) description of work performed by the trainee; and
(ix) scope of the review and supervision of the supervising appraiser.
(4) A supervising appraiser shall:
(a) delegate to a trainee only such duties as the trainee is authorized to perform under Subsection R162-2g-311(1);
(b) directly train and supervise the trainee in the performance of assigned duties by:
(i) critically observing and directing all aspects of the appraisal process; and
(ii) accepting full responsibility for the appraisal and the contents of the appraisal report;
(c) personally inspect:
(i) each property that is appraised with a trainee until the trainee has performed:
(A) 100 residential inspections as provided in Subsection R162-2g-311(1)(b)(i); and
(B) 20 non-residential inspections as provided in Subsection R162-2g-311(1)(b)(ii); and
(ii) any property for which the appraisal report scope of work or certification requires appraiser inspection.
(5) A school shall:
(a) maintain a record of each student's attendance for a minimum of five years after the student enrolls;
(b) display the certification number of all continuing education courses in advertising and marketing;
(c) as to each student who provides the school with an accurate name or license number, bank course completion information:
(i) within 10 days after the end of a course offering; and
(ii) to the database specified by the
division;[ and]
(d) upon request of the division,
substantiate any claim made in advertising or marketing[.];
(e) within 15 calendar days of any material change in the information outlined in R162-2g-307a(1), provide to the division written notice of the change;
(f) with regard to the criminal history disclosure required under R162-2g-307a(2)(c)(iii):
(i) obtain each student's signature before allowing the student to participate in course instruction;
(ii) retain each signed criminal history disclosure for a minimum of two years; and
(iii) make any signed criminal history disclosure available to the division upon request;
(g) maintain a high quality of instruction;
(h) adhere to all state laws and administrative rules regarding school and instructor certification;
(i) provide the instructor(s) for each course with the required course content outline;
(j) require instructors to adhere to the approved course content;
(k) comply with a division request for information within 10 business days of the date of the request; and
(l) verify that the material is current in any course taught on:
(i) Utah statutes;
(ii) Utah administrative rules;
(iii) Federal laws; and
(iv) Federal regulations.
(6) An instructor shall adhere to the approved outline for any course taught.
R162-2g-502b. Prohibited Conduct.
(1) An individual registered, licensed, or certified by the division may not:
(a) release to a client a draft report of a one- to four-unit residential real property;
(b) release to a client a draft report of a property other than a one- to four-unit residential real property unless:
(i) the first page of the report prominently identifies the report as a draft;
(ii) the draft report is signed by the appraiser; and
(iii) the appraiser complies with USPAP in the preparation of the draft report;
(c) affix a signature to an appraisal report by means of a signature stamp; or
(d) sign a blank or partially completed appraisal report that will be completed by anyone other than the appraiser who has signed the report;
(e) sign an appraisal report containing a statement indicating that an appraiser has inspected a property if the appraiser has not inspected the property; or
(f) split appraisal fees with any person who is not a state-licensed or state-certified appraiser, except that a supervising appraiser may pay a trainee reasonable compensation proportionate to the lawful services actually performed by the trainee in connection with appraisals.
(2) A trainee may not:
(a) solicit a client to address an engagement letter directly to the trainee; or
(b) accept payment for appraisal services from anyone other than:
(i) the trainee's supervisor; or
(ii) an appraisal or government entity with which the trainee is affiliated.
(3) A supervising appraiser may not:
(a) sign a report that is completed in response to an engagement letter that is addressed to a trainee;
(b) supervise more than three trainees at one time; or
(c) sign an appraisal report as the supervising appraiser without having given adequate supervision to the trainee, appraiser, or assistant being supervised.
(4) A state-licensed appraiser may not place a seal on an appraisal report or use a seal in any other manner likely to create the impression that the appraiser is a state-certified appraiser.
(5) A school may not:
(a) in advertising and marketing:
(i) make a misrepresentation about any course of instruction;
(ii) make statements or implications that disparage the dignity and integrity of the appraisal profession;
(iii) disparage a competitor's services or methods of operation;
(iv) as to a continuing education course,
use language that indicates division approval is pending or
otherwise forthcoming;[ or]
(b) attempt by any means to obtain or use
the questions on the state licensure or certification exam unless
those questions have been dropped from the current exam bank;[.]
(c) accept payment from a student without first providing to that student the information outlined in R162-2g-307a(2)(c);
(d) continue to operate after the expiration date of the school certification without renewing;
(e) continue to offer a course after its expiration date without renewing;
(f) allow an instructor whose instructor certification has expired to continue teaching;
(g) allow an individual student to earn more than eight credit hours of education in a single day;
(h) award credit to a student who has not complied with the minimum attendance requirements;
(i) allow a student to obtain credit for all or part of a course by taking an examination in lieu of attending the course;
(j) give valuable consideration to a person licensed with or certified by the division under Section 61-2g for referring students to the school;
(k) accept valuable consideration from a person licensed with or certified by the division under Section 61-2g for referring students to a licensed or certified appraiser; or
(l) require a student to attend any program organized for the purpose of solicitation.
(6) An instructor may not:
(a) continue to teach any course after the course has expired and without renewing the course certification; or
(b) continue to teach any course after the individual's certification has expired and without renewing the instructor certification.
KEY: real estate appraisals, [trainee registration, licensing and], school certification, [administrative procedures ]instructor certification
Date of Enactment or Last Substantive Amendment: [January 2, ]2013
Authorizing, and Implemented or Interpreted Law: 61-2g-201(2)(h); 61-2g-202(1); 61-2g-205(5)(c); 61-2g-307(3); 61-2g-401(5)
Additional Information
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For questions regarding the content or application of this rule, please contact 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].