DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
BOARD OF REAL ESTATE APPRAISERS
4 CCR 725-2

NOTICE OF PROPOSED PERMANENT RULEMAKING HEARING
November 3, 2016

CHAPTER 11:  STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE

Pursuant to and in compliance with Title 12, Article 61 and Title 24, Article 4, C.R.S. as amended, notice of proposed rulemaking is hereby given, including notice to the Attorney General of the State of Colorado and to all persons who have requested to be advised of the intention of the Colorado Board of Real Estate Appraisers (the “Board”) to promulgate rules, or to amend, repeal or repeal and re-enact the present rules of the Board.

STATEMENT OF BASIS

The statutory basis for the rules titled the Board of Real Estate Appraisers is Chapter 7 of Title 12, Article 61, Colorado Revised Statutes, as amended.  

STATEMENT OF PURPOSE

The purpose of this rule is to effectuate the legislative directive to promulgate necessary and appropriate rules in conformity with the statute and the provisions of the federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 as amended.

SPECIFIC PURPOSE OF THIS RULEMAKING

The purpose of this rule is to modify the standards of professional appraisal practice in Colorado.

Proposed New, Amended and Repealed Rules

Deleted material is showed by struck through; new material is indicated by Small Caps or underline. Rules, or portions of rules, which are unaffected are reproduced.  Readers are advised to obtain a copy of the complete rules of the Board at www.dora.colorado.gov/dre.

CHAPTER 11:  STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE

11.1	Pursuant to Section 12-61-713(1)(g), C.R.S. (as amended), the Board adopts, and incorporates by reference in compliance with Section 24-4-103(12.5), C.R.S., as the generally accepted standards of professional appraisal practice the definitions, preamble, rules, standards, and standards rules of the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Standards Board of the Appraisal Foundation on January 30, 1989 and amended through February 6, 2015 and known as the 2016-2017 edition. Amendments to the Uniform Standards of Professional Appraisal Practice subsequent to February 6, 2015 are not included in this Rule. A certified copy of the Uniform Standards of Professional Appraisal Practice is on file and available for public inspection at the offices of the Board of Real Estate Appraisers at 1560Broadway, Suite 925, Denver, Colorado. Copies of the Uniform Standards of Professional Appraisal Practice adopted under this rule may be examined at any state publications depository library. The 2016-2017 edition of the Uniform Standards of Professional Appraisal Practice may be examined at the Internet website of The Appraisal Foundation at www.appraisalfoundation.org, and copies may be ordered through that mechanism. The Appraisal Foundation may also be contacted at 1155 15th Street, NW, Suite 1111, Washington, DC 20005, or by telephone at (202) 347-7722 or by telefax at (202) 347-7727. The USPAP was adopted and incorporated by reference in Board Rule 1.10.The 2014-2015 edition of the Uniform Standards of Professional Appraisal Practice USPAP, incorporating the amendments made through February 1, 2013 shall will remain in effect through January 6, 2016. Beginning January 7, 2016, the 2016-2017 edition of the Uniform Standards of Professional Appraisal Practice USPAP shall will be in effect.

11.2	A licensee appraiser using the services of an unlicensed assistant under the provisions of Section section 12-61-721, C.R.S. (as amended), or the services of another licensee in the preparation of appraisals or other work products shall, will, consistent with the Uniform Standards of Professional Appraisal Practice USPAP, supervise each such assistant or licensee in an active, diligent and personal manner. When any portion of the work involves significant real property appraisal assistance, the licensee appraiser must describe and summarize the research, analysis and reporting contributions of each such assistant or other licensee within each such report or other work product in a manner specified in USPAP standard Standard 2.

11.3	When disclosing a contingent fee arrangement pursuant to Section 12-61-702(6), Section 12-61-713(1)(g), and Section 12-61-716(1)(b), (c) and (d), C.R.S. (as amended), Board Rule 1.20, a licensee shall disclose the contingent compensation agreement in a clear and unequivocal manner in any oral report, and in the letter of transmittal, summary of salient facts and conclusions, statement of limiting conditions, and certifications of any written report. The licensee is not required to disclose the amount of the contingent fee, but is not prohibited from full disclosure of the amount of the contingent fee. A licensee must not have a compensation arrangement for an assignment that is based on his or her opinion of value. A licensee performing any consulting services pursuant to section 12-61-702(6), C.R.S., must not represent any analysis, opinion, or conclusions as an independent appraisal assignment. In compliance with sections 12-61-713(1)(g) and 12-61-716(1)(b), (c) and (d), C.R.S, a licensee compensated by a Contingent Fee as defined in Board Rule 1.20, must disclose in a clear and conspicuous manner in any oral report, or the letter of transmittal, summary of salient facts and conclusions, statement of limiting conditions, and certifications of any written report the following:

A.	A contingent fee is being paid;
	
B.   The licensee is performing a consulting service and not an independent appraisal; and;
		
C.         Any oral or written reports were not required to be compliant with the Ethics Rule of the USPAP.

A hearing on the above subject matter will be held on Thursday, November 3, 2016, at the Colorado Division of Real Estate, 1560 Broadway, Suite 1250-C, Denver, Colorado 80202 beginning at 9:00 a.m. 

Any interested person may participate in the rule making through submission of written data, views and arguments to the Division of Real Estate.  Persons are requested to submit data, views and arguments to the Division of Real Estate in writing no less than ten (10) days prior to the hearing date and time set forth above. However, all data, views and arguments submitted prior to or at the rulemaking hearing or prior to the closure of the rulemaking record (if different from the date and time of hearing), shall be considered.

Please be advised that the rule being considered is subject to further changes and modifications after public comment and formal hearing.