STATE BOARD OF CERTIFIED REAL ESTATE
APPRAISERS[49 PA. CODE CH. 36] Federally Mandated Education Criteria [37 Pa.B. 3367]
[Saturday, July 21, 2007]The State Board of Certified Real Estate Appraisers (Board) amends Chapter 36 to read as set fort in Annex A.
The final-form rulemaking constitutes a general updating and revision of the Board's regulations. Specifically, the final-form rulemaking implements new Federally-mandated education and experience criteria for the initial certification of residential real estate appraisers and general real estate appraisers that will take effect in January 2008; amends current Board requirements to conform to existing Federal criteria regarding distance education, continuing education and appraisal teaching experience; clarifies the manner in which applicants for certification as residential and general appraisers may obtain qualifying experience in the preparation of appraisal reports; clarifies the duties of residential and general appraisers when supervising the activities of appraisal assistants; upgrades the continuing education requirement for certified Pennsylvania evaluators (CPE); and makes editorial and organizational changes to the regulations to improve clarity and comprehension.
Statutory Authority
The final-form rulemaking is authorized under sections 5(2), 6(f) and 10(b) of the Real Estate Appraisers Certification Act (REACA) (63 P. S. §§ 457.5(2), 457.6(f) and 457.10(b)) and sections 3, 4(d) and 12 of the Assessors Certification Act (ACA) (63 P. S. §§ 458.3, 458.4(d) and 458.12).
Summary of Comments and Responses to Proposed Rulemaking
The Board published a proposed rulemaking at 36 Pa.B. 2530 (May 27, 2006) with a 30-day public comment period. The Board received comments from the Appraisal Subcommittee (ASC), a Federal agency charged with overseeing the activities of state appraiser regulatory bodies and the Pennsylvania Association of Realtors (PAR).
The Board received comments from the Independent Regulatory Review Commission (IRRC) and the House Professional Licensure Committee (HPLC) as part of their review of proposed rulemaking under the Regulatory Review Act (71 P. S. §§ 745.1--745.15). The Board did not receive comments from the Senate Consumer Protection and Professional Licensure Committee (SCP/PLC) as part of its review of proposed rulemaking under the Regulatory Review Act.
Federal oversight
As noted in the preamble of the proposed rulemaking, the Board is required under the REACA to comply with the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) (Pub. L. No. 101-73, 103 Stat. 183), the Federal legislation that established the broad framework by which state appraiser regulatory bodies are to credential appraisers to perform appraisals in Federally-related transactions. The nonprofit Appraisal Foundation, through its Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB), is charged under the FIRREA with establishing the minimum initial education, continuing education, examination and experience requirements for state-credentialed appraisers and establishing the minimum practice standards, known as the Uniform Standards of Professional Appraisal Practice (USPAP), for use by state-credentialed appraisers. The ASC, an arm of the Federal Financial Institutions Examination Council, is charged under the FIRREA with overseeing the activities of states and the Appraisal Foundation in carrying out the requirements of the FIRREA.
The HPLC asked the Board to explain the process by which the ASC and states ensure compliance with the FIRREA and to describe the nature of the ASC's contacts with the Board with respect to the rulemaking.
The Board receives regular notifications from the AQB and the ASB about proposed and finalized changes in appraiser qualifications and practice standards, respectively. The ASC monitors the activities of states through periodic onsite field reviews of state appraiser regulatory programs and maintaining frequent communications with state appraiser regulatory agencies. Until September 2005, each state appraiser regulatory program was reviewed by the ASC at least once every 3 years; the new review cycle is every 2 years. The ASC promulgated a series of policy statements that establish the framework by which the ASC evaluates a state appraiser regulatory program for compliance with the FIRREA. The policy statements cover the areas of state regulatory structure and independence of functions, appraiser classifications, appraisal standards, written appraisal reports, temporary practice, reciprocity, prohibition against discrimination, National registry of state certified and licensed appraisers, information sharing and enforcement.
In preparing for a field review, the ASC staff obtains from the state appraiser regulatory agency copies of all current laws, regulations and policies, minutes of agency meetings, a log of all complaints received, a listing of approved education courses and other information relevant to the administration of the state appraiser regulatory program. The field review is conducted over a period of 2 or 3 days, usually in conjunction with a meeting of the state appraiser regulatory agency and evaluates every aspect of the state appraiser regulatory program, with special emphasis being given to enforcement activities. The ASC staff reports its findings and recommendations to the ASC, which, in turn, issues a field review letter to the state appraiser regulatory agency. The ASC's field review letter identifies those aspects of the state appraiser regulatory program that require improvement for the state to maintain compliance with the requirements of the FIRREA and invites the state appraiser regulatory agency to submit its responsive comments.
In its 2000 and 2003 field reviews, the ASC recommended that the Board amend its regulations for consistency with AQB criteria, specifically with regard to distance education and appraisal teaching experience. In January 2004, the ASC reviewed an exposure draft of the recommended revisions that were included as part of a general updating of the Board's regulations. The Board subsequently decided to expand its rulemaking to include the significant changes in AQB criteria that were approved in February 2004 and will take effect on January 1, 2008. On June 19, 2006, the ASC submitted comments on the proposed rulemaking as a follow-up to its field review on June 7 and 8, 2006.
§ 36.2--Compliance with new requirements
The proposed rulemaking restated in § 36.2(e) (relating to application process) the existing rule that an applicant for initial certification as a residential or general appraiser is required to comply with increased education or experience requirements that take effect between the applicant's filing of an application for initial certification and the applicant's passing the certification examination. The proposed rulemaking further provided that an exception to this rule is in §§ 36.11 and 36.12 (relating to qualifications for certification as residential real estate appraiser; and qualifications for certification as general real estate appraiser), which prescribe the education and experience requirements for initial certification as a residential appraiser and general appraiser, respectively.
The HPLC asked whether § 36.2(e) is mandated by the ASC. IRRC questioned the reasonableness of requiring an applicant to complete additional requirements after the applicant has already paid a fee to the Board and has been approved to sit for the certification examination. As stated in the preamble of the proposed rulemaking, when it last amended § 36.2 in 1994, the Board was acting on the ASC's instructions that an applicant for initial certification must meet the AQB's education and experience requirements that are in effect at the time of certification. See 24 Pa.B. 6298 (December 17, 1994). The exception to that rule adopted by the Board is permitted under the AQB's current qualifications criteria.
IRRC asked what notice an approved applicant would receive of an increase in education and experience requirements so that the applicant may comply before scheduling to take the certification examination. The AQB announces new education and experience requirements well in advance of their effective dates. In addition to amending its regulations, the Board publicizes pending changes in appraiser qualifications in its annual newsletter and in special mailings to individuals who are listed on the Board's voluntary registry of appraisal assistants. An applicant for initial certification would be aware of imminent new requirements prior to submitting an application.
IRRC also asked what action the Board would take if an approved applicant could not complete increased education or experience requirements within the 1-year approval period to take the certification examination. Under § 36.2(c), an approved application is deemed withdrawn if the applicant does not complete the examination within 1 year. The Board would require the applicant to submit a new application, showing completion of the increased requirements. Section 6(d) and (e) of the REACA requires an applicant for initial certification as a residential or general appraiser to satisfy education and experience requirements before being admitted to the certification examination.
IRRC also questioned the need for § 36.2(e) given that §§ 36.11 and 36.12 prescribe the education and experience requirements for initial certification. The subsection is needed because it makes clear that the filing of an application, even one that is approved by the Board, does not necessarily relieve the applicant of having to comply with new requirements that take effect prior to the applicant's initial certification.
§§ 36.11(b)(4), 36.12(b)(4), 36.43, 36.224 and 36.263--Distance education
Sections 36.11(b)(4) and 36.12(b)(4) and § 36.224 (relating to distance education courses) prescribe the distance education requirements regarding initial education for a residential appraiser, general appraiser and CPE, respectively. Sections 36.43 and 36.263 (relating to distance education) prescribe the distance education requirements regarding continuing education for a residential and general appraiser and a CPE, respectively.
The PAR noted that the distance education requirements for continuing education mandate, in most instances, that a proctored written examination be administered to the participant. The PAR commented that while a proctored written examination is appropriate for distance education courses that are utilized to satisfy initial education requirements because of the need to verify mastery of knowledge and skills required for initial certification, an examination requirement is less useful for distance education courses that are utilized for continuing education purposes because it defeats the important benefits of convenience and flexibility that help practitioners maintain current competency. The PAR further commented that many on-line continuing education courses are designed with an on-line examination function that measures mastery of the course material. IRRC's comments reiterated the concerns expressed by the PAR.
The Board agrees with the PAR and IRRC that a proctored written examination is not necessary for a distance education course offered for continuing education purposes. The Board's current regulations do not require an examination for continuing education courses that are offered in a nondistance education format. Moreover, AQB distance education criteria regarding continuing education courses stipulate that as an alternative to having the participant successfully complete a proctored written examination, it is acceptable if the participant ''successfully completes the course mechanisms required for [course] accreditation that evidence the [participant's] mastery and fluency of the course content.'' The final-form rulemaking incorporates this language into §§ 36.43 and 36.263.
IRRC also asked whether ''on-line'' courses are acceptable as distance education under the Board's regulations. The definition of ''distance education'' in § 36.1 (relating to definitions), which is based on AQB criteria, specifically refers to ''on-line learning.'' Accordingly, on-line courses may be accepted as distance education if they satisfy the distance education requirements in §§ 36.11(b)(4), 36.12(b)(4), 36.43, 36.224 and 36.263.
The proposed rulemaking contained references to the International Distance Education Certification Center (IDECC) in §§ 36.11(b)(4), 36.12(b)(4), 36.43, 36.224 and 36.263. IDECC approval of course design and delivery mechanism is required for distance education providers that are not accredited colleges or universities and whose course offerings do not involve the presentation of the course to an organized group in an instructional setting with a qualified person available to answer questions, provide information and monitor attendance.
The HPLC requested that the Board provide additional information about the IDECC. The IDECC is a nonprofit organization comprised of education and regulatory specialists from the United States and Canada which was formed in 2000 as a subsidiary of the Association of Real Estate License Law Officials. The IDECC's initial purpose was to develop standards for certifying the delivery systems of distance education courses used in the field of real estate. The IDECC evaluates matters as verifying the identity of participants, verifying the hours completed by participants and monitoring the appropriate levels of interactivity within the course. In recent years, the IDECC's services have been used by regulators in other occupations that authorize distance education, such as insurance and real estate appraising. AQB criteria mandate that state appraiser regulatory agencies require IDECC approval.
The PAR and IRRC questioned whether IDECC approval applies to a distance education course that is offered by a ''secondary provider,'' that is, a provider that obtains the right to offer a course from a course developer, or ''primary provider,'' that previously received IDECC approval as to course design and delivery mechanism. The ASC advised the Board that, under AQB criteria, IDECC approval is required of the actual course provider, regardless of whether the course provider acquired the course from another provider with IDECC approval.
Consistent with the suggestion of the HPLC and IRRC, the final-form rulemaking includes a definition of ''IDECC'' in § 36.1 so that the organization can be referenced elsewhere in the regulations by its abbreviation rather than by its full name.
IRRC asked whether the Board maintains a list of approved providers of distance education courses. The Board's website contains a list of approved course providers and their courses; distance education courses are specifically such. The Board updates the list regularly.
§§ 36.11(c) and 36.12(c)--Documentation of appraisal education
Sections 36.11(c) and 36.12(c) contain the appraisal subjects that must be covered for initial certification as a residential appraiser and general appraiser, respectively. The regulations provide that an applicant for certification ''shall demonstrate'' that classroom hours covered the required subject matter. IRRC recommended that the Board amend the regulations to state the manner in which an applicant is expected to ''demonstrate'' compliance. The Board does not believe this amendment is necessary. The Board's application forms for initial residential and general appraiser certification set forth with specificity the manner in which an applicant must document education and experience qualifications required for certification.
§§ 36.11(b)(5) and 36.12(b)(5)--Challenge examinations
The proposed rulemaking made editorial amendments, recodified in §§ 36.11(b)(5) and 36.12(b)(5), that permit an applicant for initial certification as a residential appraiser and general appraiser, respectively, to gain credit towards the appraisal education requirement through successful completion of a ''challenge examination'' administered by a course provider instead of attending the course. The provisions apply only to credit awarded by a course provider prior to January 1, 1990, and the Board must be satisfied with the quality of the challenge examination that was administered by the course provider.
The HPLC commented that ''challenge examination'' is used as a ''term of art'' in the regulations and needs to be defined. The Board does not believe a definition is necessary. The AQB, which adopted the challenge examination standard on which the Board's regulations are based, did not consider it necessary to define the term. The Board believes the essential meaning of ''challenge examination'' is conveyed by the regulations' reference to the fact that the examination is administered to an individual who is excused from attending the course if he receives a passing grade.
§§ 36.11(b)(2) and 36.12(b)(2)--Teaching credit
Sections 36.11(b)(2) and 36.12(b)(2) provide that an applicant for initial certification as a residential appraiser and general appraiser, respectively, may count experience teaching appraisal courses towards the appraisal education requirement. The proposed rulemaking deleted language permitting teaching experience to count towards the appraisal experience requirement for initial certification, but retained language stating that ''[a] teacher requesting credit for the classroom hour requirement may not request credit for experience.'' AQB criteria permit teachers of appraisal courses to apply their teaching experience towards the appraisal education requirement but not the appraisal experience requirement.
The ASC and IRRC recommended that §§ 36.11(b)(2) and 36.12(b)(2) be amended to delete the previously-quoted language to eliminate any potential confusion as to whether teaching experience may be counted towards the appraisal experience requirement. The final-form rulemaking incorporates this recommendation.
§§ 36.11(d) and 36.12(d)--Postsecondary education
The proposed rulemaking set forth postsecondary education requirements in §§ 36.11(d) and 36.12(d) for initial certification as a residential appraiser and general appraiser, respectively, effective January 1, 2008. Section 36.11(d) provides that an applicant for initial certification as a residential appraiser must either possess an associate's degree or have completed 21 semester credits in prescribed college level-subjects, while § 36.12(d) provides that a candidate for certification as a general appraiser must either possess a bachelor's degree or have completed 30 semester credits in prescribed college-level subjects.
The HPLC asked the Board for an explanation of the different postsecondary education requirements for residential and general appraisers and whether the Board was adding these requirements at the request of the ASC. The postsecondary education requirements for appraisers were developed by the AQB under its authority under the FIRREA to establish qualifications for appraisers in Federally-related transactions. Section 6(f) of the REACA requires the Board to impose the minimum education and experience requirements imposed under the FIRREA for residential and general appraisers. The ASC would consider the Board to be noncompliant with its obligations under the FIRREA if it failed to implement the AQB's postsecondary education requirements for appraiser candidates. According to AQB literature, the decision to establish a postsecondary education requirement, in addition to the upgraded classroom hour requirement in appraisal subjects, was based on years of research and meetings with state and Federal regulators, appraisal organizations, academicians, users of appraisal services and the general public. It is likely that the AQB determined that initial certification as a general appraiser required a higher level of postsecondary education than initial certification as a residential appraiser because a general appraiser's scope of authority allows for more complex appraisal assignments than a residential appraiser's scope of authority.
§§ 36.11(e), 36.12(e) and 36.13--Experience requirements
The proposed rulemaking set forth amended appraisal experience requirements in §§ 36.11(e) and 36.12(e) for certification as a residential appraiser and general appraiser, respectively. Sections 36.11(e)(1) and 36.12(e)(1) provided that an applicant for certification must have acquired 3,000 hours and 2,500 hours of acceptable appraisal experience, respectively, ''at least 50%'' of which must be in the preparation of appraisal reports. IRRC suggested that, for purposes of clarity, the language be amended to state the minimum number of hours that must be spent in the preparation of appraisal reports rather than expressing the requirement as a percentage of the total hours of experience acquired. The final-form rulemaking incorporates IRRC's recommendation by providing that an applicant for residential appraiser certification must have acquired at least 1,250 hours in the preparation of appraisal reports, while an applicant for general appraiser certification must have acquired at least 1,500 hours in the preparation of appraisal reports.
The proposed rulemaking further provided in §§ 36.11(e)(2) and 36.12(e)(2) that all experience acquired after January 1, 1991, must comply with USPAP. The ASC recommended that the Board amend this language to provide that experience must be acquired after January 30, 1989, and must be USPAP-compliant. The Board notes that the ASC's recommendation is based on new AQB experience criteria that take effect January 1, 2008. The current AQB criteria do not prescribe a time limit during which experience must be acquired and only requires experience acquired after January 1, 1991, to be USPAP-compliant. To ensure that the Board's regulations conform to new AQB criteria, the final-form rulemaking includes language providing that effective January 1, 2008, all experience must be acquired after January 30, 1989, and must comply with USPAP. IRRC inquired whether the Board had considered the new experience standard when it drafted the proposed rulemaking. The Board inadvertently overlooked the matter during proposed rulemaking.
Section 36.13 (relating to experience options for preparation of appraisal reports) sets forth the standards by which the Board evaluates experience acquired in the preparation of appraisal reports. The PAR commented that the proposed rulemaking retained an incorrect citation to the Real Estate Licensing and Registration Act (63 P. S. §§ 455.101--455.902). The citation has been corrected in this final-form rulemaking.
§ 36.51--Compliance with USPAP
Section 36.51 (relating to compliance with USPAP) provides that an appraiser who violates a provision of USPAP ''may be subject to disciplinary action'' under the REACA. The HPLC recommended that the language be amended to provide that a violation of USPAP ''shall'' subject the violator to disciplinary action under the REACA. The final-form rulemaking incorporates this amendment.
§ 36.54--Appraisal assistant
Section 36.54 (relating to supervision of appraisal assistant) prescribes the duties of a residential or general appraiser who utilizes the services of an appraisal assistant.
Section 36.54(1) requires an appraiser to provide ''written notification'' to the Board when an appraisal assistant begins work for the appraiser. IRRC asked whether e-mail is an acceptable method of written notification. The Board believes e-mail is an acceptable means of notification under § 36.54(1).
Section 36.54(3)(i) provides that in the case of an assistant who is not already credentialed as a residential appraiser, an appraiser must accompany the assistant during the physical inspection of each property until the assistant has logged 300 hours of experience or until the appraiser deems the assistant competent under USPAP to perform the inspection unaccompanied, whichever period of time is greater. This subparagraph replaces the current inspection standard, which requires an appraiser to personally inspect 100% of the properties for which an assistant helped to prepare appraisal reports. The new inspection standard is similar to that prescribed by the AQB for states whose appraiser statutes extend formal recognition to appraiser trainees; an appraiser must accompany a trainee on each property inspection until the appraiser deems the trainee competent under USPAP to perform the inspection unaccompanied.
IRRC questioned why an appraiser should not be required to accompany an assistant on each property inspection until the assistant becomes certified. If an assistant has the necessary proficiency to perform a physical inspection alone, nothing is gained--either in terms of the quality of the assistant's training or the credibility of the appraisal itself--by requiring an appraiser to accompany the assistant on the inspection. As the Board noted in the preamble of the proposed rulemaking, the current inspection standard forces appraisers to spend much of their time unproductively, making it economically difficult for them to extend apprenticeship opportunities to others who desire to enter the appraising profession.
The PAR and IRRC questioned how the Board determined that 300 hours was the absolute minimum amount of time that an assistant must work before being eligible to perform a property inspection unaccompanied. The figure represents a compromise between the Board's current inspection standard, which commits an appraiser to accompanying an assistant on inspections during the entire period that the assistant is acquiring his minimum 1,250 hours of experience preparing appraisal reports, and the AQB's inspection standard for appraiser trainees, which commits the appraiser to accompanying the assistant on inspections until the appraiser deems the assistant competent to go it alone, which could be after fewer than 300 hours of experience. The 300-hour minimum requirement serves to lessen the risk that an appraisal assistant will receive inadequate training as a result of a premature judgment by the supervising appraiser that the assistant is competent to perform inspections unaccompanied.
§ 36.91--Reactivation of lapsed certification of appraiser
Under § 36.91 (relating to reactivation of lapsed certification), an appraiser who seeks to reactivate a lapsed certification must, among other things, submit documentation of having completed 28 hours of continuing education, including the required 7-hour National USPAP Update Course and the required 2-hour course on the REACA and Board regulations and policies--as set forth in § 36.41 (relating to continuing education requirement)--within the 2-year period preceding the filing date of the reactivation application. The ASC recommended that the continuing education requirement for reactivating a lapsed certification be amended to conform to AQB criteria, adopted in September 2005, that require a reactivating appraiser to complete continuing education that would have been required if the appraiser had maintained a current certification, including the most recent edition of the 7-hour National USPAP Update Course. The final-form rulemaking includes the language from AQB criteria, with the additional clarification that a reactivating appraiser need complete only the most recent version of the required 2-hour course on the REACA and Board regulations and policies.
The proposed rulemaking further provided that an appraiser who performed activities requiring certification during the period when the certification was lapsed ''may be subject to disciplinary action'' under the appropriate provisions of the REACA. The HPLC recommended that the language be amended to provide that unauthorized practice by an appraiser with a lapsed certification ''shall'' subject the violator to disciplinary action under the REACA. The final-form rulemaking incorporates this amendment.
§ 36.261--Continuing education for CPE
This final-form rulemaking amends the 28-hour continuing education requirement for CPEs in § 36.261 (relating to continuing education requirement) to increase the required component on USPAP from 4 hours to 7 hours, effective with the renewal of certification for the biennial renewal period that begins July 1, 2007. The proposed rulemaking mandated that renewing certifi- cateholders must have completed the 7-hour National USPAP Update Course developed by the AQB or an equivalent 7-hour course approved by the AQB, which is the same coursework that residential appraisers, general appraisers and broker/appraisers must complete as a condition of biennial renewal of certification.
The Assessors Association of Pennsylvania (AAP) contacted the Board after the close of the public comment period to confirm its understanding that the rulemaking would permit CPEs to complete a 7-hour USPAP course that is taught by a non-AQB approved instructor using AQB instructional materials. Virtually all CPEs obtain their continuing education through the AAP, which does not currently have an AQB-approved USPAP instructor. The Board does not believe that the AQB will approve a USPAP course unless it has an AQB-approved instructor. The Board considers it sufficient that CPEs, who, unlike appraisers, are not statutorily subject to AQB requirements, complete their biennial USPAP training using AQB instructional materials. Accordingly, the final-form rulemaking amends USPAP requirement to provide that CPEs must complete either the 7-hour National USPAP Update Course or an equivalent 7-hour course approved by the Board.
§ 36.271--Reactivation of lapsed certification of CPE
Proposed § 36.271 (relating to reactivation of lapsed certification) provided, in part, that a CPE who performed activities requiring certification during the period when certification was lapsed ''may be subject to disciplinary action'' under the ACA. The HPLC recommended that the language be amended to provide that unauthorized practice by a CPE with a lapsed certification ''shall'' subject the violator to disciplinary action under the ACA. The final-form rulemaking incorporates this amendment.
Fiscal Impact and Paperwork Requirements
Under the final-form rulemaking, candidates for certification as residential and general appraisers will incur additional costs in meeting the increased education requirements for initial certification that are mandated by the AQB. These costs cannot be quantified. The final-form rulemaking, through its elimination of the requirement that residential and general appraisers must accompany appraisal assistants on all property inspections, will allow appraisers who employ appraisal assistants to use their time more efficiently. The savings to appraisers, and indirectly to users of appraisal services, cannot be quantified. The final-form rulemaking will have no direct fiscal impact on the general public or on the Commonwealth and its political subdivisions.
The final-form rulemaking will require residential and general appraisers to provide written notification to the Board when they employ appraisal assistants and to maintain appraisal assistant checklists for the appraisal reports that the assistants help to prepare. The final-form rulemaking will not create additional paperwork for the general public or the Commonwealth and its political subdivisions.
Effective Date
The final-form rulemaking will be effective upon publication in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 17, 2006, the Board submitted a copy of the notice of proposed rulemaking, published at 36 Pa.B. 2530, to IRRC and the Chairpersons of the HPLC and the SCP/PLC for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC, the HPLC and the SCP/PLC were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Board has considered all comments from IRRC, the HPLC, the SCP/PLC and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on May 23, 2007, the final-form rulemaking was approved by the HPLC. On June 6, 2007, the final-form rulemaking was deemed approved by the SCP/PLC. Under section 5.1(e) of the Regulatory Review Act, IRRC met on June 7, 2007, and approved the final-form rulemaking.
Additional Information
Persons who require additional information about the final-form rulemaking should submit inquiries to Heidy Weirich, Administrator, State Board of Certified Real Estate Appraisers, P. O. Box 2649, Harrisburg, PA 17105-2649, (717) 783-4866, ST-APPRAISE@state.pa.us.
Findings
The Board finds that:
(1) Public notice of proposed rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations promulgated thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and all comments were considered.
(3) The amendments to the final-form rulemaking do not enlarge the original purpose of the proposed rulemaking published at 36 Pa.B. 2530.
(4) The final-form rulemaking adopted by this order is necessary and appropriate for the administration of the REACA and the ACA.
Order
The Board, acting under the REACA and the ACA, orders that:
(a) The regulations of the Board, 49 Pa. Code Chapter 36, are amended by adding § 36.54, deleting § 36.225 and amending §§ 36.1--36.3, 36.11--36.13, 36.41, 36.43, 36.51, 36.52, 36.91, 36.224, 36.261, 36.263, 36.271 and 36.281 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Board shall submit this order and Annex A to the Office of Attorney General and the Office of General Counsel for approval as required by law.
(c) The Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) The final-form rulemaking shall take effect upon publication in the Pennsylvania Bulletin.
ROBERT F. MCRAE,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 37 Pa.B. 2909 (June 23, 2007).)
Fiscal Note: Fiscal Note 16A-7014 remains valid for the final adoption of the subject regulations.
ANNEX A TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS PART I. DEPARTMENT OF STATE Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS CHAPTER 36. STATE BOARD OF CERTIFIED REAL ESTATE APPRAISERS Subchapter A. CERTIFIED REAL ESTATE APPRAISERS GENERAL PROVISIONS § 36.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
AQB--The Appraiser Qualifications Board of the Appraisal Foundation.
Act--The Real Estate Appraisers Certification Act (63 P. S. §§ 457.1--457.19).
Ad valorem tax appraisal--Valuation for tax purposes involving the appraisal of real estate, its analysis, opinions and conclusions regarding taxation.
Applicant--A natural person.
Appraisal--A written analysis, opinion or conclusion relating to the nature, quality, value or utility of specified interests in, or aspects of, identified real property, for or in expectation of compensation.
Appraisal review--An analysis of a completed appraisal report to determine if it conforms to specific requirements and guidelines and to insure that the report is consistent and mathematically correct.
Board--The State Board of Certified Real Estate Appraisers of the Commonwealth.
Certified broker/appraiser--A person who holds a certificate issued under authority of section 6(a)(3) of the act (63 P. S. § 457.6(a)(3)) and who is authorized to perform appraisals of all types of real property in non-Federally-related transactions.
Certified general real estate appraiser--A person who holds a certificate issued under authority of section 6(a)(2) and (e) of the act and § 36.12 (relating to qualifications for certification as general real estate appraiser) and who is authorized to perform appraisals of all types of real property in all transactions, whether Federally-related or non-Federally-related.
Certified real estate appraiser--A certified broker/appraiser, certified residential real estate appraiser or certified general real estate appraiser.
Certified residential real estate appraiser--A person who holds a certificate issued under authority of section 6(a)(1) and (d) of the act and § 36.11 (relating to qualifications for certification as residential real estate appraiser) and who is authorized to perform appraisals of residential properties of one-to-four dwelling units in all transactions, whether Federally-related or non-Federally-related.
Distance education--An educational process based on the geographical separation of the learner and instructor, which provides interaction between the learner and instructor and includes testing. Examples include CD or DVD ROM, on-line learning, correspondence courses, video conferencing, and video and remote television courses.
FIRREA--The Financial Institutions Reform, Recovery and Enforcement Act of 1989, the act of August 9, 1989 (Pub. L. 101-73, 103 Stat. 183).
Feasibility analysis--A study of the cost-benefit relationship of an economic endeavor.
Federally-related transaction--A real estate-related financial transaction which a Federal financial institution regulatory agency or the Resolution Trust Corporation engages in, contracts for or regulates, and which requires the services of an appraiser.
Highest and best use analysis--A study which represents the reasonable and probable use that results in the highest present value of the land or improved property after considering all legally permissible, physically possible and economically feasible uses.
IDECC--International Distance Education Certification Center.
Real estate counseling--Providing, for a fee, disinterested and unbiased advice, professional guidance and judgment in the broad field of real estate, involving all segments of the business, including marketing, leasing, managing, planning, financing, appraising, providing testimony and other similar services. Real estate counseling is a specialty area in which the counselor clearly identifies the real estate problem to be solved, determines the most satisfactory solutions and, where appropriate, follows through on the implementation.
Real estate-related financial transaction--A transaction involving the following:
(i) Sale, lease, purchase, investment in or exchange of real property, including interests in property or the financing thereof.
(ii) Refinancing of real property or interests in real property.
(iii) Use of real property or interests in property as security for a loan or investment, including mortgage-backed securities.
Review appraiser--A person who performs an appraisal review.
USPAP--The Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal Standards Board of the Appraisal Foundation.
§ 36.2. Application process.
(a) Application form. A person interested in becoming a certified residential real estate appraiser or a certified general real estate appraiser shall complete and file with the Board a notarized application form and an application fee. Application forms may be obtained by visiting the Board's website at www.dos.state.pa.us/real or by writing, telephoning, or e-mailing the Board at Post Office Box 2649, Harrisburg, PA 17105-2649, (717) 783-4866, or ST-APPRAISE@state.pa.us, respectively.
(b) Application fee. The application fee for certification as a residential or general real estate appraiser is set forth in § 36.6 (relating to fees). Application fees are nonrefundable. Payments must be in the form of a personal check or money order made payable to the ''Commonwealth of Pennsylvania.''
(c) Approved applications. Subject to the provisions of subsection (e), an approved application will be valid for 1 year from the date of approval. If an applicant does not pass the certification examination within this 1-year period, the applicant's application will be considered to have been withdrawn. If the applicant wishes to take the examination after 1 year from the date of approval, a new application, along with the required fee, shall be submitted to the Board.
(d) Disapproved applications. Subject to the provisions of subsection (e), an applicant whose application has been disapproved by the Board will be notified in writing of the reasons for the disapproval, and will have 1 year from the date of disapproval to correct the deficiencies or to file a request for reconsideration. A request for reconsideration must give the reason for the applicant's request, must be accompanied by documentary materials not previously submitted which the applicant wishes the Board to consider and may include a request for an informal interview with the Board. If a request for reconsideration is denied or, subject to the provisions of subsection (e), an applicant is unable to correct the deficiencies which resulted in the disapproval of the application within 1 year from the date of disapproval, a new application, along with the required fee, shall be submitted to the Board.
(e) Compliance with new requirements. Except as otherwise provided in §§ 36.11 and 36.12 (relating to qualifications for certification as residential real estate appraiser; and qualifications for certification as general real estate appraiser), an applicant shall comply with any increased education or experience requirements that take effect between the applicant's filing of an initial application and the applicant's passing the certification examination.
§ 36.3. Examinations.
(a) The examination required for certification as a residential real estate appraiser is the AQB-endorsed Uniform State Certified Residential Real Property Appraiser Examination or its equivalent. The examination required for certification as a general real estate appraiser is the AQB-endorsed Uniform State Certified General Real Property Appraiser Examination or its equivalent. The certification examinations are administered by a professional testing organization under contract with the Board at times and places established by the professional testing organization.
(b) Interested persons may obtain information about the certification examinations from the professional testing organization. Contact information for the professional testing organization appears on the Board's website at www.dos.state.pa.us/real.
QUALIFICATIONS FOR CERTIFICATION § 36.11. Qualifications for certification as residential real estate appraiser.
(a) Overview. An applicant for certification as a residential real estate appraiser shall be of good moral character, meet the following education and experience requirements prior to examination, and pass an examination for certification as a residential real estate appraiser. Neither a real estate salesperson's license nor a real estate broker's license issued under the Real Estate Licensing and Registration Act (63 P. S. § 455.101--455.902) is a prerequisite to certification as a residential real estate appraiser.
(b) Appraisal classroom hours. An applicant shall submit evidence to the Board of having completed 120 classroom hours of courses in subjects related to real estate appraisal, including the 15-hour National USPAP Course, together with coverage of the topics listed in subsection (c)(1). Effective January 1, 2008, an applicant shall submit evidence to the Board of having completed 200 classroom hours in the appraisal curriculum set forth in subsection (c)(2), except that the new requirement does not apply to an applicant who has satisfied the existing education requirement before January 1, 2008.
(1) Length of classroom hour requirement. Credit toward the classroom hour requirement will only be granted when the length of the course is at least 15 hours, and the applicant successfully completes an examination pertinent to the course. A classroom hour is defined as 50 minutes out of each 60 minute segment.
(2) Teaching credit. Credit toward the classroom hour requirement may be awarded to teachers of appraisal courses for actual classroom time, but credit will not be given for course repetition.
(3) Providers of appraisal courses. Credit for the classroom hour requirement may be obtained from accredited colleges or universities and community or junior colleges. Subject to Board approval under § 36.31 (relating to provider registration/appraisal courses), credit for the classroom hour requirement may also be obtained from real estate appraisal or real estate related organizations, State or Federal agencies or commissions, proprietary schools and other providers.
(4) Distance education. A distance education course is acceptable to meet the classroom hour requirement if the course is approved by the Board and meets the following conditions:
(i) The course is presented by one of the following:
(A) An accredited (Commission on Colleges or a regional accreditation association) college or university that offers distance education programs in other disciplines.
(B) A course provider that has received approval for course design and delivery mechanism from the IDECC and approval for course content from the Board or from the AQB through its Course Approval Program.
(ii) The applicant successfully completes a written examination proctored by an official approved by the college, university or other course provider.
(iii) The length and content of the course meet the requirements of paragraph (1) and subsection (c), respectively.
(5) Credit for challenge examination. The Board may accept toward the classroom hour requirement a course for which the applicant obtained credit from the course provider by challenge examination without attending the course, if the course provider granted credit prior to July 1, 1990, and the Board is satisfied with the quality of the challenge examination that was administered by the course provider.
(c) Content of appraisal education. The content of an applicant's appraisal education must be as follows:
(1) An applicant who is subject to the 120-classroom hour requirement in subsection (b) shall demonstrate that the classroom hours included coverage of the following topics, with particular emphasis on the appraisal of one-to-four unit residential properties:
* * * * * (2) An applicant who is subject to the 200-classroom hour requirement in subsection (b) shall demonstrate that the classroom hours satisfy the following curriculum requirements:
(i) Basic appraisal principles (30 hours).
(A) Real property concepts and characteristics.
(I) Basic real property concepts.
(II) Real property characteristics.
(III) Legal description.
(B) Legal considerations.
(I) Forms of ownership.
(II) Public and private controls.
(III) Real estate contracts.
(IV) Leases.
(C) Influences on real estate.
(I) Governmental.
(II) Economic.
(III) Social.
(IV) Environmental, geographic and physical.
(D) Types of value.
(I) Market value.
(II) Other value types.
(E) Economic principles.
(I) Classical economic principles.
(II) Application and illustrations of the economic principles.
(F) Overview of real estate markets and analysis.
(I) Market fundamentals, characteristics and definitions.
(II) Supply analysis.
(III) Demand analysis.
(IV) Use of market analysis.
(G) Ethics and how they apply in appraisal theory and practice.
(ii) Basic appraisal procedures (30 hours).
(A) Overview of approaches to value.
(B) Valuation procedure.
(I) Defining the problem.
(II) Collecting and selecting the data.
(III) Analyzing.
(IV) Reconciling and final value opinion.
(V) Communicating the appraisal.
(C) Property description.
(I) Geographic characteristics of the land/site.
(II) Geologic characteristics of the land/site.
(III) Location and neighborhood characteristics.
(IV) Land/site considerations for highest and best use.
(V) Improvements--architectural styles and types of construction.
(D) Residential applications.
(iii) National USPAP Course or equivalent (15 hours).
(A) Preamble and ethics rules.
(B) Standard 1.
(C) Standard 2.
(D) Standards 3 to 10.
(E) Statements and advisory opinions.
(iv) Residential market analysis and highest and best use (15 hours).
(A) Residential markets and analysis.
(I) Market fundamentals, characteristics and definitions.
(II) Supply analysis.
(III) Demand analysis.
(IV) Use of market analysis.
(B) Highest and best use.
(I) Test constraints.
(II) Application of highest and best use.
(III) Special considerations.
(IV) Market analysis.
(V) Case studies.
(v) Residential appraiser site valuation and cost approach (15 hours).
(A) Site valuation.
(I) Methods.
(II) Case studies.
(B) Cost approach.
(I) Concepts and definitions.
(II) Replacement/reproduction cost new.
(III) Accrued depreciation.
(IV) Methods of estimating accrued depreciation.
(V) Case studies.
(vi) Residential sales comparison and income approaches (30 hours).
(A) Valuation principles and procedures--sales comparison approach.
(B) Valuation principles and procedures--income approach.
(C) Finance and cash equivalency.
(D) Financial calculator introduction.
(E) Identification, derivation and measurement of adjustments.
(F) Gross rent multipliers.
(G) Partial interests.
(H) Reconciliation.
(I) Case studies and applications.
(vii) Residential report writing and case studies (15 hours).
(A) Writing and reasoning skills.
(B) Common writing problems.
(C) Form reports.
(D) Report options and USPAP compliance.
(E) Case studies.
(viii) Statistics, modeling and finance (15 hours).
(A) Statistics.
(B) Valuation models (AVMs and mass appraisal).
(C) Real estate finance.
(ix) Advanced residential applications and case studies (15 hours).
(A) Complex property, ownership and market conditions.
(B) Deriving and supporting adjustments.
(C) Residential market analysis.
(D) Advanced case studies.
(x) Appraisal subject matter electives (20 hours).
(d) Postsecondary education.
(1) Effective January 1, 2008, an applicant shall submit evidence to the Board of having satisfied one of the following requirements:
(i) Possession of an associate's degree, or higher, from an accredited college or university.
(ii) Completion of 21 semester credit hours in the following college-level subjects at an accredited college or university:
(A) English composition.
(B) Principles of economics (micro or macro).
(C) Finance.
(D) Algebra, geometry or higher mathematics.
(E) Statistics.
(F) Introduction to computers-word processing/spread- sheets.
(G) Business or real estate law.
(2) This subsection does not apply to an applicant who completed 120 classroom hours of qualifying appraisal education under subsection (b) before January 1, 2008.
(e) Experience.
(1) In addition to meeting the education requirements, an applicant shall submit evidence to the Board of having acquired 2,500 hours of acceptable appraisal experience during a period of at least 24 months. At least 1,250 hours of the experience acquired by an applicant must be in the actual preparation of real estate appraisal reports, which includes physical inspections of the interior and exterior of the subject properties, in accordance with § 36.13 (relating to experience options regarding preparation of appraisal reports). Hours may be treated as cumulative to achieve the necessary 2,500 hours of appraisal experience. Cumulative is defined to mean that experience may be acquired over any time period in excess of 24 months. There is no minimum number of hours which must be acquired in any 12 months. The following will serve as an example:
Year 1 400 Hours Year 2 800 Hours Year 3 200 Hours Year 4 500 Hours Year 5 600 Hours Total 2,500 Hours (2) Effective January 1, 2008, experience must be acquired after January 30, 1989, and must comply with USPAP. Experience acquired after August 2, 1993, will not be accepted unless the applicant has first completed 45 classroom hours of appraisal education, including 15 hours on USPAP. Acceptable categories of appraisal experience include:
(i) Fee and staff appraisals.
(ii) Ad valorem tax appraisals, if the appraiser can demonstrate that the appraiser used techniques to value properties similar to those used by other appraisers and that the appraiser effectively used the appraisal process.
(iii) Review appraisals.
(iv) Appraisal analysis (synonymous with an appraisal).
(v) Real estate counseling, if the counselor can satisfactorily demonstrate that:
(A) The client clearly asked for counseling services.
(B) The client was informed that the counselor's time would be devoted to counseling services, which are separate from other real estate functions such as appraising, sales management and mortgage lending.
(C) A file memorandum was prepared on each assignment indicating the nature of the assignment, recommendations and disposition.
(D) Compensation for the counseling services was separate from other real estate services rendered.
(vi) Highest and best use analysis.
(vii) Feasibility analysis/study.
(viii) Real estate related experience such as that of an officer of a lending institution, if the experience consists of the actual performance or professional review of real estate appraisals.
(ix) Evaluations under FIRREA in accordance with requirements of Federal financial institution regulatory agencies.
(x) Case studies or practicum courses that are approved by the AQB Course Approval Program.
§ 36.12. Qualifications for certification as general real estate appraiser.
(a) Overview. An applicant for certification as a general real estate appraiser shall be of good moral character, meet the following education and experience requirements prior to examination, and pass an examination for certification as a general real estate appraiser. Neither a real estate salesperson's license nor a real estate broker's license issued under the Real Estate Licensing and Registration Act (63 P. S. §§ 455.101--455.902) is a prerequisite to certification as a general real estate appraiser.
(b) Appraisal classroom hours. An applicant shall submit evidence to the Board of having completed 180 classroom hours of courses in subjects related to real estate appraisal, including the 15-hour National USPAP Course, together with coverage of the topics listed in subsection (c)(1). Effective January 1, 2008, an applicant shall submit evidence to the Board of having completed 300 classroom hours in the appraisal curriculum set forth in subsection (c)(2), except that the new requirement does not apply to an applicant who has satisfied the existing education requirement before January 1, 2008.
(1) Length of classroom hour requirement. Credit toward the classroom hour requirement will only be granted when the length of the course is at least 15 hours, and the applicant successfully completes an examination pertinent to the course. A classroom hour is defined as 50 minutes out of each 60 minute segment.
(2) Teaching credit. Credit toward the classroom hour requirement may be awarded to teachers of appraisal courses for actual classroom time, but credit will not be given for course repetition.
(3) Providers of appraisal courses. Credit for the classroom hour requirement may be obtained from accredited colleges or universities and community or junior colleges. Subject to Board approval under § 36.31 (relating to provider registration/appraisal courses), credit for the classroom hour requirement may also be obtained from real estate appraisal or real estate related organizations, State or Federal agencies or commissions, proprietary schools and other providers.
(4) Distance education. A distance education course is acceptable to meet the classroom hour requirement if the course is approved by the Board and meets the following conditions:
(i) The course is presented by one of the following:
(A) An accredited (Commission on Colleges or a regional accreditation association) college or university that offers distance education programs in other disciplines.
(B) A course provider that has received approval for course design and delivery mechanism from the IDECC and approval for course content from the Board or from the AQB through its Course Approval Program.
(ii) The applicant successfully completes a written examination proctored by an official approved by the college, university or other course provider.
(iii) The length and content of the course meet the requirements of paragraph (1) and subsection (c), respectively.
(5) Credit for challenge examination. The Board may accept toward the classroom hour requirement a course for which the applicant obtained credit from the course provider by challenge examination without attending the course, if the course provider granted credit prior to July 1, 1990, and the Board is satisfied with the quality of the challenge examination that was administered by the course provider.
(c) Content of appraisal education. The content of an applicant's appraisal education must be as follows:
(1) An applicant who is subject to the 180-classroom hour requirement in subsection (b) shall demonstrate that the classroom hours included coverage of the following topics, with particular emphasis on the appraisal of nonresidential properties. Residential is defined as one to four residential units.
* * * * * (2) An applicant who is subject to the 300-hour classroom requirement in subsection (b) shall demonstrate that the classroom hours satisfy the following curriculum requirements:
(i) Basic appraisal principles (30 hours).
(A) Real property concepts and characteristics.
(I) Basic real property concepts.
(II) Real property characteristics.
(III) Legal description.
(B) Legal considerations.
(I) Forms of ownership.
(II) Public and private controls.
(III) Real estate contracts.
(IV) Leases.
(C) Influences on real estate.
(I) Governmental.
(II) Economic.
(III) Social.
(IV) Environmental, geographic and physical.
(D) Types of value.
(I) Market value.
(II) Other value types.
(E) Economic principles.
(I) Classical economic principles.
(II) Application and illustrations of the economic principles.
(F) Overview of real estate markets and analysis.
(I) Market fundamentals, characteristics and definitions.
(II) Supply analysis.
(III) Demand analysis.
(IV) Use of market analysis.
(G) Ethics and how they apply in appraisal theory and practice.
(ii) Basic appraisal procedures (30 hours).
(A) Overview of approaches to value.
(B) Valuation procedure.
(I) Defining the problem.
(II) Collecting and selecting the data.
(III) Analyzing.
(IV) Reconciling and final value opinion.
(V) Communicating the appraisal.
(C) Property description.
(I) Geographic characteristics of the land/site.
(II) Geologic characteristics of the land/site.
(III) Location and neighborhood characteristics.
(IV) Land/site considerations for highest and best use.
(V) Improvements--architectural styles and types of construction.
(D) Residential applications.
(iii) National USPAP Course or equivalent (15 hours).
(A) Preamble and ethics rules.
(B) Standard 1.
(C) Standard 2.
(D) Standards 3 to 10.
(E) Statements and advisory opinions.
(iv) General appraiser market analysis and highest and best use (30 hours).
(A) Real estate markets and analysis.
(I) Market fundamentals, characteristics and definitions.
(II) Supply analysis.
(III) Demand analysis.
(IV) Use of market analysis.
(B) Highest and best use.
(I) Test constraints.
(II) Application of highest and best use.
(III) Special considerations.
(IV) Market analysis.
(V) Case studies.
(v) General appraiser site valuation and cost approach (30 hours).
(A) Site valuation.
(I) Methods.
(II) Case studies.
(B) Cost approach.
(I) Concepts and definitions.
(II) Replacement/reproduction cost new.
(III) Accrued depreciation.
(IV) Methods of estimating accrued depreciation.
(V) Case studies.
(vi) General appraiser sales comparison approach (30 hours).
(A) Value principles.
(B) Procedures.
(C) Identification and measurement of adjustments.
(D) Reconciliation.
(E) Case studies.
(vii) General appraiser income approach (60 hours).
(A) Overview.
(B) Compound interest.
(C) Lease analysis.
(D) Income analysis.
(E) Vacancy and collection loss.
(F) Estimating operating expenses and reserves.
(G) Reconstructed income and expense statement.
(H) Stabilized net operating income estimate.
(I) Direct capitalization.
(J) Discounted cash flow.
(K) Yield capitalization.
(L) Partial interests.
(M) Case studies.
(viii) General appraiser report writing and case studies (30 hours).
(A) Writing and reasoning skills.
(B) Common writing problems.
(C) Report options and USPAP compliance.
(D) Case studies.
(ix) Statistics, modeling and finance (15 hours).
(A) Statistics.
(B) Valuation models (AVMs and mass appraisal).
(C) Real estate finance.
(x) Appraisal subject matter electives (30 hours).
(d) Postsecondary education.
(1) Effective January 1, 2008, an applicant shall submit evidence to the Board of having satisfied one of the following requirements:
(i) Possession of a bachelor's degree, or higher, from an accredited college or university.
(ii) Completion of 30 semester credit hours in the following college-level subjects at an accredited college or university:
(A) English composition.
(B) Macroeconomics.
(C) Microeconomics.
(D) Finance.
(E) Algebra, geometry or higher mathematics.
(F) Statistics.
(G) Introduction to computers--word processing/spreadsheets.
(H) Business or real estate law.
(I) Two elective courses in accounting, geography, ag-economics, business management or real estate.
(2) This subsection does not apply to an applicant who completed 180 classroom hours of qualifying appraisal education under subsection (b) before January 1, 2008.
(e) Experience.
(1) In addition to meeting the education requirements, an applicant shall submit evidence to the Board of having acquired 3,000 hours of acceptable appraisal experience, including 1,500 hours in nonresidential work, during a period of no less than 30 months. At least 1,500 hours of the experience acquired by an applicant shall be in the actual preparation of real estate appraisal reports, which includes physical inspections of the interior and exterior of the subject properties, in accordance with § 36.13 (relating to experience options regarding preparation of appraisal reports). Hours may be treated as cumulative to achieve the necessary 3,000 hours of appraisal experience. Cumulative is defined to mean that experience may be acquired over any time period in excess of 30 months. There is no minimum number of hours which must be acquired in any 1 year. The following will serve as an example:
Year 1 1,000 Hours Year 2 800 Hours Year 3 100 Hours Year 4 1,000 Hours Year 5 100 Hours Total 3,000 Hours (2) Effective January 1, 2008, experience must be acquired after January 30, 1989, and must comply with USPAP. Experience acquired after August 2, 1993, will not be accepted unless the applicant has first completed 45 classroom hours of appraisal education, including 15 hours on USPAP. Acceptable categories of appraisal experience include:
(i) Fee and staff appraisals.
(ii) Ad valorem tax appraisals, if the appraiser can demonstrate that the appraiser used techniques to value properties similar to those used by other appraisers and that the appraiser effectively used the appraisal process.
(iii) Review appraisals.
(iv) Appraisal analysis (synonymous with an appraisal).
(v) Real estate counseling, if the counselor can satisfactorily demonstrate that:
(A) The client clearly asked for counseling services.
(B) The client was informed that the counselor's time would be devoted to counseling services, which are separate from other real estate functions such as appraising, sales management and mortgage lending.
(C) A file memorandum was prepared on each assignment, indicating the nature of the assignment, recommendations and disposition.
(D) Compensation for the counseling services was separate from other real estate services rendered.
(vi) Highest and best use analysis.
(vii) Feasibility analysis/study.
(viii) Real estate experience such as that of an officer of a lending institution, if the experience consists of the actual performance or professional review of real estate appraisals.
(ix) Evaluations under FIRREA in accordance with requirements of Federal financial institution regulatory agencies.
(x) Case studies or practicum courses that are approved by the AQB Course Approval Program.
§ 36.13. Experience options for preparation of appraisal reports.
(a) An applicant for certification as a residential real estate appraiser or a general real estate appraiser under §§ 36.11 and 36.12 (relating to qualifications for certification as residential real estate appraiser; and qualifications for certification as general real estate appraiser) shall have acquired experience in the preparation of appraisal reports in one or more of the following:
(1) Prior to September 3, 1998:
(i) As a licensed real estate broker under the Real Estate Licensing and Registration Act (63 P. S. §§ 455.101--455.902) and Chapter 35 (relating to State Real Estate Commission).
(ii) As an elected officer, director or employee of a banking institution, savings institution, savings bank, credit union or trust company operating under applicable Federal or State laws, when acting on behalf of the institution in connection with a loan transaction.
(iii) As a certified broker/appraiser.
(iv) As an assistant to a certified residential real estate appraiser or certified general real estate appraiser, provided the assistant satisfies the requirements of subsection (b).
(2) On or after September 3, 1998:
(i) As a certified broker/appraiser.
(ii) As an assistant to a certified residential real estate appraiser or certified general real estate appraiser, provided the assistant satisfies the requirements of subsection (b).
(b) An assistant to a certified general appraiser or certified residential appraiser shall observe the following requirements when preparing an appraisal report:
(1) The assistant shall perform an inspection of the interior and exterior of the property.
(2) The assistant may not arrive at an independent determination of value.
(3) The assistant shall sign the appraisal report as ''assistant to the certified real estate appraiser'' or be referenced in the certification section of the appraisal report, or in an addendum to the appraisal report, as having provided significant professional assistance.
CONTINUING EDUCATION § 36.41. Continuing education requirement.
(a) Continuing education for certified real estate appraisers is necessary to ensure that they maintain and increase their skill, knowledge and competency in real estate appraising. Except as provided in subsection (b), a certified real estate appraiser shall complete 28 classroom hours of continuing education--including the 7-hour National USPAP Update Course, or an equivalent 7-hour course approved by the AQB, and at least 2 hours on the act, this chapter and the policies of the Board--during each biennial renewal period as a condition of renewal of certification for the next biennial renewal period.
(b) A certified general real estate appraiser or residential real estate appraiser whose initial certification becomes effective between January 1 and June 30 of a biennial renewal year will not be required to furnish proof of continuing education as a condition of renewal of certification in that biennial renewal year.
§ 36. 43. Distance education.
A distance education course is acceptable for continuing education credit if it is approved by the Board and meets the following conditions:
(1) The course is presented by one of the following:
(i) A course provider that presents the course to an organized group in an instructional setting with a person qualified and available to answer questions, provide information and monitor attendance.
(ii) An accredited (Commission on Colleges or a regional accreditation association) college or university that offers distance education programs in other disciplines.
(iii) A course provider that has received approval for course design and delivery mechanism from the IDECC and approval for course content from the Board or from the AQB through its Course Approval Program.
(2) With regard to a course presented under paragraph (1)(ii) or (iii), the certified real estate appraiser either successfully completes a written examination proctored by an official approved by the college, university or other course provider or successfully completes the course mechanisms required for course accreditation that evidence the learner's mastery and fluency of the course content.
(3) The content and length of the course meet the requirements of § 36.42 (relating to continuing education subject matter).
STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE § 36.51. Compliance with USPAP.
A certified real estate appraiser shall perform an appraisal in accordance with USPAP. A certified real estate appraiser who violates one or more provisions of USPAP shall be subject to disciplinary action under the act. A certified real estate appraiser can obtain a current edition of USPAP by writing, telephoning or e-mailing the Appraisal Foundation at 1029 Vermont Avenue, N.W., Suite 900, Washington D.C. 20005-3517, (202) 347-7722, or info@appraisalfoundation.org, respectively.
§ 36.52. Use of certificate number and title.
A certified real estate appraiser shall place his name, signature and certificate number adjacent to or immediately below the title ''Pennsylvania certified general real estate appraiser,'' ''Pennsylvania certified residential real estate appraiser'' or ''Pennsylvania certified broker/appraiser,'' as appropriate, on each written appraisal report and each written appraisal agreement. Professional designations may be included adjacent to the signature, if applicable. The following will serve as an example:
/s/__________
John Doe, (Professional designation, if applicable)
Pennsylvania Certified Residential Real Estate Appraiser
Certification number RL-999999-L
§ 36.54. Supervision of appraisal assistant.
A certified residential real estate appraiser or certified general real estate appraiser who utilizes an appraisal assistant shall:
(1) Provide written notification to the Board of the name and address of the assistant when the assistant begins work for the appraiser.
(2) Directly supervise and control the assistant's work, assuming total responsibility for the contents of the appraisal report, including all value conclusions.
(3) Accompany the assistant during the physical inspection of the property as follows:
(i) In the case of an assistant who is not a certified residential real estate appraiser, accompany the assistant during the physical inspection of the property until the assistant has logged 300 hours of experience or until the supervising appraiser determines the assistant is competent under USPAP to perform the physical inspection unaccompanied, whichever is the longer period.
(ii) In the case of an assistant who is a certified residential real estate appraiser seeking to obtain qualifying experience for certification as a general real estate appraiser, accompany the assistant during the physical inspection of the property until the supervising appraiser determines the assistant is competent under USPAP to perform the physical inspection unaccompanied.
(4) Sign the appraisal report as a certified real estate appraiser under § 36.52 (relating to use of certificate number and title) and either have the assistant sign the appraisal report as assistant to the certified real estate appraiser or identify the assistant in the certification section of the appraisal report, or in addendum to the appraisal report, as having provided significant professional assistance.
(5) Sign a Board-approved appraisal assistant checklist that has been completed by the assistant and that relates to the assistant's work on the appraisal report.
(6) Provide a current or former assistant who is applying for appraiser certification with copies of designated appraisal reports and appraisal assistant checklists requested by the Board to verify the assistant's experience.
MISCELLANEOUS PROVISIONS § 36.91. Reactivation of lapsed certification.
A certified real estate appraiser whose certification has lapsed for failure to biennially renew certification may apply to the Board for reactivation of certification by paying the renewal fee required under § 36.6 (relating to fees) and providing documentation of having completed the continuing education hours that would have been required under § 36.41 (relating to continuing education requirement) if the certified real estate appraiser had maintained current certification, except that only the most recent versions of the 7-hour National USPAP update course and the 2-hour course on the act, this chapter and Board policies must be completed. A certified real estate appraiser who performed an appraisal, or held himself out as an appraiser, during a period when his certification was lapsed shall be subject to disciplinary action by the Board under section 3 of the act (63 P. S. § 457.3) in addition to being required to pay late renewal fees under section 225 of the Bureau of Professional and Occupational Affairs Fee Act (63 P. S. § 1401-225).
Subchapter C. CERTIFIED PENNSYLVANIA EVALUATORS QUALIFICATIONS FOR CERTIFICATION § 36.224. Distance education courses.
A distance education course is acceptable to meet the classroom hour requirement if the course is approved by the Board and meets the following conditions:
(1) The course is presented by one of the following:
(i) An accredited (Commission on Colleges or a regional accreditation association) college or university that offers distance education programs in other disciplines.
(ii) A course provider that has received approval for course design and delivery mechanism from the IDECC and approval for course content from the Board or from the AQB through its Course Approval Program.
(2) The applicant successfully completes a written examination proctored by an official approved by the college, university or other course provider.
(3) The content and length of the course meet the requirements of § 36.222 (relating to required courses of study).
§ 36.225. (Reserved).
CONTINUING EDUCATION § 36.261. Continuing education requirement.
(a) Except as provided in subsection (b), a certified Pennsylvania evaluator shall complete 28 classroom hours of continuing education--including at least 4 hours on USPAP and at least 2 hours on the act, this chapter and the policies of the Board--during each biennial renewal period as a condition of renewal of certification for the next biennial renewal period. Effective with renewal of certification for the 2007--2009 biennial renewal period, the USPAP requirement shall be the 7-hour National USPAP Update Course or an equivalent 7-hour course approved by the Board.
(b) A certified Pennsylvania evaluator whose initial certification becomes effective between January 1 and June 30 of a biennial renewal year will not be required to furnish proof of continuing education as a condition of biennial renewal of certification in that biennial renewal year.
§ 36.263. Distance education.
A distance education course is acceptable for continuing education credit if it is approved by the Board and meets the following conditions:
(1) The course is presented by one of the following:
(i) A course provider that presents the course to an organized group in an instructional setting with a person qualified and available to answer questions, provide information and monitor attendance.
(ii) An accredited (Commission on Colleges or a regional accreditation association) college or university that offers distance education programs in other disciplines.
(iii) A course provider that has received approval for course design and delivery mechanism from the IDECC and approval for course content from the Board or from the AQB through its Course Approval Program.
(2) With regard to a course presented under paragraph (1)(ii) or (iii), the certified Pennsylvania evaluator either successfully completes a written examination proctored by an official approved by the college, university or other course provider or successfully completes the course mechanisms required for course accreditation that evidence the learner's mastery and fluency of the course content.
(3) The content and length of the course meets the requirements of § 36.262 (relating to continuing education subject matter).
REACTIVATION OF CERTIFICATION § 36.271. Reactivation of lapsed certification.
A certified Pennsylvania evaluator whose certification has lapsed for failure to biennially renew certification may apply to the Board for reactivation of certification by paying the renewal fee required under § 36.6 (relating to fees) and providing documentation of having completed 28 hours of continuing education as required under § 36.261 (relating to continuing education requirement) within the 2-year period immediately preceding the date of filing of the reactivation application. A certified Pennsylvania evaluator who performed a valuation of real property for ad valorem tax purposes, or held himself out as a certified Pennsylvania evaluator, during a period when his certification was lapsed shall be subject to disciplinary action by the Board under the act in addition to being required to pay late renewal fees under section 225 of the Bureau of Professional and Occupational Affairs Fee Act (63 P. S. § 1401-225).
STANDARDS OF PROFESSIONAL CONDUCT § 36.281. Standards of Professional Conduct.
Preamble
Certified Pennsylvania evaluators shall comply with the act and this subchapter and conform to the standards of professional conduct in this section. Certified Pennsylvania evaluators who fail to adhere to these standards will be subject to professional discipline under section 7(a)(6) of the act (63 P. S. § 458.7(a)(6)).
Standard 1. General duties.
Certified Pennsylvania evaluators shall perform their duties in accordance with the general and specific county assessment laws and generally accepted assessment standards. Certified Pennsylvania evaluators shall perform all assessments in accordance with USPAP. Certified Pennsylvania evaluators may obtain a copy of the current edition of USPAP by writing, telephoning or e-mailing the Appraisal Foundation at 1029 Vermont Avenue, N.W., Suite 900, Washington, D.C. 20005-3517, (202) 347-7722 or info@appraisalfoundation.org, respectively.
Standard 2. Public review of assessments and records.
Certified Pennsylvania evaluators shall make property assessments available for public review and shall make all other records in their custody available for public review unless access to the records is specifically limited or prohibited by law or the information has been obtained on a confidential basis and the law permits the information to be treated confidentially.
Standard 3. Professional qualifications.
Certified Pennsylvania evaluators shall use professional designations only when they are properly authorized to do so. Certified Pennsylvania evaluators may not claim qualifications that are false, misleading or deceptive.
Standard 4. Limitations on activities.
Certified Pennsylvania evaluators may not perform assessment and appraisal-related assignments that could reasonably be construed as being in conflict with their responsibilities to their jurisdictions, employers or clients, in which they have unrevealed personal interests or biases, or that they are not qualified to perform.
Standard 5. Contingent fees.
Certified Pennsylvania evaluators may not perform an assessment or appraisal-related assignment if the employment itself is contingent upon the reporting of a predetermined analysis or opinion, or if the fee to be paid for the performance of the assignment is contingent upon the opinion, conclusion or valuation reached, or upon the consequences resulting from the assignment.
Standard 6. Advertising and promotion.
Certified Pennsylvania evaluators may not make false, misleading or deceptive statements or claims in advertising or promotions to solicit assessment and appraisal-related assignments.
Standard 7. Conflict of interest.
Certified Pennsylvania evaluators who are government employees may not solicit or perform assessment and appraisal-related assignments that could create conflicts of interest or the appearance of conflicts of interest.
Standard 8. Reporting of unethical practices.
Certified Pennsylvania evaluators shall report unethical practices or other similar actions or activities which may discredit or reflect adversely upon the appraisal or assessment profession to the Complaints Office of the Bureau of Professional and Occupational Affairs by telephoning the Complaints Office at (800) 822-2113 or by submitting a written complaint to the Complaints Officer of the Bureau of Professional and Occupational Affairs, Post Office Box 2649, Harrisburg, Pennsylvania 17105-2649.
[Pa.B. Doc. No. 07-1275. Filed for public inspection July 20, 2007, 9:00 a.m.]
