GENERAL GOVERNMENT CABINET

Kentucky Real Estate Appraisers Board

(Amendment)

 

      201 KAR 30:030. Types of appraisers required in federally related transactions; certification and licensure.

 

      RELATES TO: KRS 324A.010, 324A.030, 324A.035(1), (3), 324A.040(2), 324A.052

      STATUTORY AUTHORITY: KRS 324A.035(1), (3), 12 U.S.C. 3331 - 3351

      NECESSITY, FUNCTION, AND CONFORMITY: 12 U.S.C. 3331 through 3351 requires the board to promulgate administrative regulations for certification and licensure of appraisers of real property in federally related transactions. This administrative regulation establishes the types of appraisers required in federally related transactions, scope of the practice, and general requirements for certification or licensure.

 

      Section 1. Types of Appraisers. An appraiser for a federally related transaction shall be a:

      (1) Certified general real property appraiser;

      (2) Certified residential real property appraiser;

      (3) Licensed real property appraiser; or

      (4) Associate real property appraiser.

 

      Section 2. Scope of Practice. (1) Certified general real property appraiser. A certified general real property appraiser may perform appraisals of all types of real property.

      (2) Certified residential real property appraiser. A certified residential real property appraiser may perform residential appraisals of one (1) to four (4) units.

      (3) Licensed real property appraiser. A licensed real property appraiser may perform appraisals of:

      (a) Noncomplex, one (1) to four (4) residential units with a transaction value less than $1,000,000; and

      (b) Complex, one (1) to four (4) residential units with a transaction value less than $250,000.

      (4)(a) Associate. An associate real property appraiser may perform an appraisal of property that the supervising appraiser of the associate may appraise and shall be subject to the Uniform Standards of Professional Appraisal Practice, incorporated by reference in 201 KAR 30:040.

      (b) A separate appraisal log shall be maintained for each supervising appraiser.

      (c) The associate shall record in the log for each appraisal the following:

      1. Type of property;

      2. Client name and address;

      3. Address of appraised property;

      4. Description of work performed by the associate;

      5. Scope of the review;

      6. Scope of the supervision by the supervising appraiser;

      7. Number of actual hours worked by the associate on the assignment; and

      8. Signature and state certification number of the supervising appraiser.

      (d) The associate shall be entitled to obtain copies of the appraisal reports he or she prepared. The supervising appraiser shall keep copies of appraisal reports for a period of at least five (5) years or at least two (2) years after final disposition of any judicial proceeding in which testimony was given, whichever period expires last.

      (e) The supervising appraiser shall:

      1. Have been certified by the board for a period of three (3) years;

      2. Be in good standing with the board and shall not have received a suspension, a revocation, or other sanction that limited or prohibited that licensee’s practice of real property appraising within the three (3) year period immediately prior to applying to become a supervision appraiser; and

      3. Be responsible for the training and supervision of the associate.

      (f) Only a certified general real property appraiser who satisfies the requirements of a supervising appraiser in paragraph (e) of this subsection may supervise[who has been a Certified General Real Property Appraiser for three (3) years shall provide supervision for] a person acquiring experience toward a Certified General Real Property Appraiser certificate.

      (g) Any[A certificate holder who has been a] certified general real property appraiser or a certified residential real property appraiser who satisfies the requirements of a supervising appraiser in paragraph (e) of this subsection may supervise[for three (3) years shall provide supervision for] a person acquiring experience toward a Certified Residential Real Property Appraiser certificate.

      (h) The supervising appraiser shall:

      1. Accept responsibility for an associate's appraisal report by signing and certifying that the report is in compliance with the Uniform Standards of Professional Appraisal Practice, incorporated by reference in 201 KAR 30:040;

      2. Review reports by the associate;

      3. Personally inspect each appraised property and the comparable sales with the associate on the associate's first fifty (50) real property appraisal assignments, to ensure that the associate is competent and is acting in accordance with the competency provision of the Uniform Standards of Professional Appraisal Practice, incorporated by reference in 201 KAR 30:040, for the property type;

      4. Allow an associate who has completed the fifty (50) appraisal assignments required by subparagraph 3. of this paragraph to inspect properties located within fifty (50) miles of the supervisor's office without being accompanied by the supervisor, if the supervisor has determined pursuant to this administrative regulation that the associate is competent to perform an appraisal;

      5. For the twelve (12) months following the date of issuance of an associate license, accompany the associate and inspect each appraised property and the comparable sales on each appraisal assignment located more than fifty (50) miles from the supervisor’s office;

      6. Be limited to a maximum of three (3) real property associates at a time; and

      7. Notify the board immediately if the supervision of a real property associate has terminated; and

      8. Not be employed by an associate or by a company, firm, or partnership in which the associate has a controlling interest.

      (i) A person otherwise qualified for supervising appraiser who has been disciplined by the board under KRS 324A.050 shall be subject to one (1) or more of the following, according to the severity of the prior violation:

      1. Prohibited from supervising associates;

      2. Limited to the number of associates to supervise; or

      3. Be required to take additional courses approved by the board before being permitted to supervise an associate.

      (j) An associate shall submit to the board two (2) complete summary appraisal reports.

      1. The first report shall be submitted to the board six (6) months following the date of issuance of the associate license. The second report shall be submitted to the board twelve (12) months following the date of issuance of the associate license.

      2. If necessary to determine the competency of the associate, the board shall request additional reports from the associate.

      (5)(a) A first time supervisor and a new associate shall attend the board-approved course in supervision practices prior to beginning supervision or training.

      (b) To be eligible to provide supervision, a supervisor shall attend the board-approved course in supervision practices every three (3) years.

 

      Section 3. General Requirements for Certification or Licensure. Certification or licensure, as appropriate, of the types of appraisers specified in Section 1 of this administrative regulation, shall be granted if an applicant:

      (1) Has met the examination, education, experience, and fee requirements established by 201 KAR 30:050 and 30:060; and

      (2) Applies to the board on the notarized Appraiser License/Certification Application.

 

      Section 4. Armed Forces Exemption. An individual who submits an application for one (1) of the Kentucky real property appraiser credentials listed in Section 1 of this administrative regulation who was a member of any Reserve component of the US Armed Forces and was pursuing an appraiser license or certification prior to December 1, 2011, and who was called to active duty between December 1, 2011 and December 31, 2014, may satisfy the qualifications required under the 2008 Criteria of the Appraiser Qualifications Board for an additional time period after January 1, 2015 that shall be equal to the applicant’s time of active duty, plus twelve (12) months.

 

      Section 5. Incorporation by Reference. (1) "Appraiser License/Certification Application", KREAB Form APP100, 1/09, is incorporated by reference.

      (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Real Estate Appraisers Board, 135 W. Irvine Street, Suite 301, Richmond, Kentucky 40475, (859) 623-1658, Monday through Friday, 8 a.m. to 4:30 p.m.

 

HAROLD G. BRANTLEY, Chair

      APPROVED BY AGENCY: November 21, 2014

      FILED WITH LRC: January 14, 2015 at 4 p.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on February 27, 2015, at 1:30 p.m., in the office of the Kentucky Real Estate Appraisers Board; 135 W. Irvine Street, Suite 301, Richmond, Kentucky 40475, (859) 623-1658. Individuals interested in attending this hearing shall notify the agency in writing by five workdays prior to the hearing of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person who attends will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to attend the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted until close of business on March 2, 2015. Send written notification of intent to attend the public hearing or submit written comments on the proposed administrative regulation to:

      CONTACT PERSON: Larry Disney, Executive Director, Kentucky Real Estate Appraisers Board, 135 W. Irvine Street, Suite 301, Richmond, Kentucky 40475, phone (859) 623-1658, fax (859) 623-2598.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact person: Larry Disney

      (1) Provide a brief summary of

      (a) What this administrative regulation does: This administrative regulation governs the type of appraisers certified or licensed by the board, their scope of practice, general requirements for certification or licensure, and an armed forces exemption.

      (b) The necessity of this administrative regulation: This administrative regulation is necessary to comply with Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989; and to establish the type of certified or license appraisers, the scope of practice; and general requirements.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: The administrative regulation is in conformity as the authorizing statute gives the board the ability to promulgate administrative regulations regarding who may be certified or licensed and the general requirements for certification or licensure.

      (d) How this administrative regulation will assist in the effective administration of the statutes: This administrative regulation will assist by establishing who may be certified or licensed and the general requirements for certification or licensure

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: This amendment clarifies the years of experience required to supervise a person and provides for an armed forces exemption.

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary so the board maintains the most updated standards of practice within the industry.

      (c) How the amendment conforms to the content of the authorizing statutes: The administrative regulation is in conformity as the authorizing statute gives the board the ability to promulgate administrative regulations regarding certification and licensure.

      (d) How the amendment will assist in the effective administration of the statutes: This amendment to the administrative regulation should reduce questions on the number of years required to provide supervision. It also provides from an armed forces exemption which will allow active duty individuals additional time to become certified or licensed.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: There are approximately 1,800 persons certified by the board.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: An applicant who is in the armed forces to obtain the exemption. All other requirements for certification or licensure remain the same.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): There are no additional costs for complying with the amendment.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): Members of the armed forces receives additional time to obtain a certification or license.

      (5) Provide an estimate of how much it will cost to implement this administrative regulation:

      (a) Initially: No new costs will be incurred by the changes.

      (b) On a continuing basis: No new costs will be incurred by the changes.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: The board’s operations are funded by fees paid by credential holders.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment: No increase in fees or funding will be required to implement the changes made by this administrative regulation.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees: This administrative regulation does not establish fees or directly or indirectly increase any fees.

      (9) TIERING: Is tiering applied? Tiering was not applied as the administrative regulation is applicable to all certificate holders. This administrative regulation does not distinguish between similarly situated individuals on the basis of any factor.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      1. What units, parts or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? Kentucky Real Estate Appraisers Board.

      2. Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation: 324A.035.

      3. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect. None

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? None

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? None

      (c) How much will it cost to administer this program for the first year? None

      (d) How much will it cost to administer this program for subsequent years? None

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation: