RULES AND REGULATIONS
Title 49—PROFESSIONAL AND VOCATIONAL STANDARDS
STATE BOARD OF CERTIFIED REAL ESTATE APPRAISERS
[ 49 PA. CODE CH. 36 ]
Federally-Mandated Revisions
[49 Pa.B. 6667]
[Saturday, November 2, 2019]The State Board of Certified Real Estate Appraisers (Board) hereby amends Chapter 36 to read as set forth in Annex A.
Effective Date
This final-form rulemaking will be effective upon publication in the Pennsylvania Bulletin.
Statutory Authority
Section 5(1) of the Real Estate Appraisers Certification Act (act) (63 P.S. § 457.5(1)) authorizes the Board to pass upon the qualifications and fitness of applicants for certification or licensure and to adopt and revise rules and regulations requiring applicants for certification to pass examinations regarding qualifications for certification. Section 5(2) of the act authorizes the Board to adopt and revise rules and regulations as may be necessary to carry out the act. Under section 6 of the act (63 P.S. § 457.6), the Board is authorized to issue licenses and certificates to real estate appraisers who meet the minimum education and experience criteria established by the Appraiser Qualifications Board (AQB) of The Appraisal Foundation under Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (Pub.L. No. 101-73, 103 Stat. 183) (12 U.S.C.A. §§ 3331—3356).
FIRREA is the Federal legislation that established the broad framework by which state appraiser regulatory bodies are to credential licensed appraiser trainees and real estate appraisers in Federally-related transactions. The Appraisal Foundation, through the AQB, is charged under FIRREA with establishing the minimum initial education, continuing education, examination and experience requirements for state-credentialed appraisers. These minimum qualification criteria are binding on the Board. The AQB publication establishing the minimum education, experience, examination and continuing education requirements for real property appraisers is The Real Property Appraiser Qualification Criteria (AQB Qualification Criteria).
The act of July 7, 2016 (P.L. 474, No. 72) (Act 72) amended the act to implement AQB Qualification Criteria, including minimum requirements for licensed appraiser trainees. Section 4 of Act 72 added section 10(b.2) of the act (63 P.S. § 457.10(b.2)), which provides that licensed appraiser trainees are subject to the same continuing education requirements for licensure renewal as residential and general real estate appraisers.
Background and Purpose
This final-form rulemaking incorporates the mandated Federal amendments, including updates in qualification criteria for general and residential real estate appraisers and licensed appraiser trainees. This final-form rulemaking incorporates the May 1, 2018, AQB Qualification Criteria updates in postsecondary education, appraisal education, experience, examinations, supervisory appraiser criteria and continuing education. This final-form rulemaking also requires applicants to submit an official criminal history record information check.
Historically, the Board has promulgated regulations by adopting the AQB Qualification Criteria almost verbatim in the regulations. The Board has determined that having two separate standards (the AQB Qualification Criteria and the Board regulations that restate the minimum qualification criteria) causes confusion among licensees and is difficult for the Board to administer. When Federal law changes or the AQB evaluates and modifies its minimum qualification criteria, the regulations are not immediately reflective of the new AQB Qualification Criteria because the Board must amend its regulations. The Board determined that it is more efficient and prudent to adopt and incorporate the AQB Qualification Criteria by reference, where practicable. By adopting and incorporating the AQB Qualification Criteria by reference, the Board eliminates the need to amend its regulations when the AQB updates or modifies the minimum qualification criteria. Where the Board requires more stringent standards than the Federal minimum standards, this final-form rulemaking adopts the AQB Qualification Criteria and incorporates the Board's more stringent standards.
Summary of Comments and the Board's Response
Notice of proposed rulemaking was published at 48 Pa.B. 3955 (July 7, 2018), with a 30-day public comment period. The Board received comments from the Appraisal Subcommittee of the Federal Financial Institutions Examination Council (ASC) and the Coalition of Pennsylvania Real Estate Appraisers (CPREA). The Board also received comments from the Independent Regulatory Review Commission (IRRC) as part of its review of the proposed rulemaking under the Regulatory Review Act. The Board did not receive comments from the House Professional Licensure Committee or the Senate Consumer Protection and Professional Licensure Committee.
Generally
ASC is the Federal agency responsible for the oversight of state appraiser regulatory programs. In drafting the proposed rulemaking, the Board worked closely with the ASC to ensure that its proposed regulatory amendments appropriately implement Federal requirements. The ASC audits the Board on a biennial basis and the Board works diligently to ensure compliance with those standards. The ASC submitted a comment supporting the Board's proposed rulemaking.
CPREA is the legislative arm of the Appraisal Institute in this Commonwealth and is the largest organization of professional appraisers in Pennsylvania. CPREA supports the proposed rulemaking and is specifically supportive of the technique/strategy of incorporating the AQB Qualification Criteria by means of reference rather than verbatim.
§§ 36.11(e)(2) and 36.12(e)(2)—Experience
The proposed amendments at §§ 36.11(e)(2) and 36.12(e)(2) (relating to qualifications for certification as residential real estate appraiser; and qualifications for certification as general real estate appraiser) would have required at least 50% of the total experience requirement to be in the actual preparation of real estate appraisal reports which includes physical inspection of interior and exterior of the subject properties. CPREA commented on this proposed amendment and suggested increasing the number of hours in the actual preparation of real estate appraisal reports from 50% to 75% for both residential and general real estate appraisers. IRRC also commented regarding this issue and asked whether the Board considered requiring a higher percentage of actual preparation hours to account for the lower number of total hours required by the AQB Qualification Criteria. IRRC also asked the Board to explain why the number of hours of actual preparation of real estate appraisal reports required for both residential and general real estate appraisers is reasonable to protect the public health, safety and welfare.
While the AQB Qualification Criteria does not require a specified number of hours in the actual preparation of real estate appraisal reports, the Board has historically believed and continues to believe that the actual preparation of appraisal reports is a critical component of experience. The public relies upon the accuracy of professionally-prepared real estate appraisals in deciding to purchase or sell (and at what price) real estate, as well as whether to extend a loan secured by real estate. If the public is unable to rely upon the competency and professionalism of appraisers, the credibility of the profession is threatened, which undermines confidence in the real estate and financial markets which base their decisions on sound and credible real property appraisals.
For the residential real estate appraiser certification, the Board's existing regulation in § 36.11(e)(1) requires 2,500 hours of experience with 1,250 hours in the actual preparation of real estate appraisal reports which includes physical inspection of the interior and exterior of the subject properties. The 1,250 hours in actual preparation of real estate appraisal reports represents 50% of the total number of required experience hours. This final-form rulemaking adopting the updated AQB Qualification Criteria decreases the total required experience hours from 2,500 experience hours to 1,500 experience hours. For the general real estate appraiser certification, the Board's existing regulation in § 36.12(e)(1) requires 3,000 hours with 1,500 hours in the actual preparation of real estate appraisal reports which includes physical inspection of interior and exterior of the subject properties. The 1,500 hours in actual preparation of real estate appraisal reports represents 50% of the total number of required experience hours. For the general real estate appraiser certification, this final-form rulemaking adopting the AQB Qualification Criteria does not change the total experience hours required for general appraisers.
When the Board adopted the 50% standard in the proposed rulemaking, the Board considered and adopted the existing regulatory standard for the general and residential real estate appraisers (the equivalent of 50% for both general and residential real estate appraiser certifications). During its September 11, 2018, and March 6, 2019, Board meetings, the Board considered IRRC's comment and the concerns of CPREA. The Board discussed the updated AQB Qualification Criteria that decreases the residential real estate appraiser certification experience requirements and evaluated whether it is more appropriate and, in the public's best interest, to increase the number of hours in actual preparation of real estate appraisal reports to account for the lower number of hours. In doing so, the Board considered the underlying reasons for requiring a specified number of hours in actual preparation of real estate appraisal reports. For residential real estate appraisers, the Board historically required 1,250 hours in the actual preparation of appraisal reports to ensure that trainees receive sufficient exposure to appraising different types of properties. Requiring a significant number of hours in the actual preparation of appraisal reports exposes trainees to dif- ferent problems and issues that may arise in apprais- ing properties. During the training period, trainees must develop appraisal skills, including online searches of properties and analysis of deeds and contracts. Trainees must also develop appraisal skills by using the sales comparison approach, the income approach and the cost approach. Another example of a skill requiring exposure to a variety of property types is rating the quality and condition of properties, as required in a standard Fannie Mae residential appraisal report form. In the Board's opinion, a trainee develops competence in rating the quality and condition of properties after being exposed to many different properties with different qualities and conditions. The Board believes trainees need to learn the theoretical aspects of appraising and must have significant experience in applying those methods and theories to actual properties. Obtaining a variety of experience through actual preparation of appraisal reports, under the supervision of a certified appraiser, develops those critical skills.
After considering the previous factors with regard to the residential real estate appraiser certification, the Board determined that increasing the number of hours of actual preparation of appraisal reports to 75% will provide sufficient training in the activity for which the licensed appraiser trainee will be certified—preparing appraisal reports. The increased percentage will provide a sufficient number of experience hours for development of basic skills that may be necessary prior to engaging in the actual preparation of real estate appraisal reports and will provide sufficient flexibility to obtain experience in other ways. The Board recognizes other types of experience hours that help develop appraisal competency, including fee and staff appraisals, ad valorem tax appraisal, review appraisals, case studies or practicum courses and research assistance in highest and best use analysis and feasibility analysis; however, experience in actual preparation of appraisal reports is an essential skill that must be developed throughout the training period. Accordingly, regarding the residential real estate appraiser certification, the Board amends § 36.11(e)(2) to require 75% of the total required experience hours in the actual preparation of real estate appraisal reports which includes physical inspection of the interior and exterior of the subject properties.
For general real estate appraisers, the Board does not support an increase in the number of hours in the actual preparation of appraisal reports. The final-form regulation in § 36.12(e)(2) requires 50% or 1,500 hours in the actual preparation of real estate appraisal reports. The Board believes this is a sufficient number of hours and is comparable to the number of hours required for residential real estate appraisers given the disparity between the total number of experience hours required for each certification.
Clarity and Lack of Ambiguity
IRRC questioned how the Board intends to notify the regulated community and applicants of changes in the AQB Qualification Criteria and asked whether the Board considered a mechanism for notification.
The Board currently has mechanisms in place for notification of AQB Qualification Criteria changes and will continue to implement these mechanisms upon publication of this final-form rulemaking. When AQB Qualification Criteria changes, the Board currently notifies licensees and stakeholders by means of e-mail notices and newsletters and through notices on its web site. The Board takes steps to ensure that appropriate associations receive notification and the Board discusses all AQB Qualification Criteria changes in its public board meetings. Additionally, the Board's applications for initial certification, initial licensure and the supervisor registry contain information about and links to the AQB. The AQB web site does not require payment or subscription for AQB Qualification Criteria, but rather, is available to the public. Therefore, the Board is confident that the AQB Qualification Criteria is accessible to applicants, licensees and other stakeholders.
As suggested by IRRC, the Board amends this final-form rulemaking to include a notification requirement. The Board amends § 36.2 (relating to application process) by adding subsection (f). Under this provision, whenever the AQB adopts changes to the AQB Qualification Criteria, the Board will post a notice on the Board's web site, notify all licensees by means of e-mail, and announce the AQB Qualification Criteria changes at its next scheduled board meeting. Additionally, the Board may, in its discretion, publish notice of AQB Qualification Criteria changes in the Pennsylvania Bulletin.
Other Amendments to this Final-form Rulemaking
The following description includes changes other than those based on comments from IRRC and the public.
The Board amends § 36.1 (relating to definitions) to correct a typographical error in the definition of distance education. The proposed rulemaking provided examples of distance education to include ''CD-ROM or DUD-ROM.'' The Board amends this section by changing DUD-ROM to DVD-ROM.
The Board amends § 36.3(a) (relating to examinations) to allow for an examination equivalent to the AQB-approved National examination. While the Board does not currently anticipate a change in the examination, the Board amends this provision so the Board will have some flexibility to change the examination in the event such change is necessary due to amendments in Federal or State law. The existing regulations allow for an equivalent examination; therefore, this amendment is not a change to the existing regulatory authority regarding examinations.
Fiscal Impact and Paperwork Requirements
This final-form rulemaking reflects the AQB Qualification Criteria for postsecondary education and experience standards for certified residential real estate appraiser. Prior to May 1, 2018, the AQB Qualification Criteria required applicants for certified residential real estate appraisers to hold a bachelor's degree, or higher, from an accredited college or university. The new AQB Qualification decreases the post-secondary education requirements and decreases the number of experience hours from 2,500 hours to 1,500 hours. The new AQB Qualification Criteria and this final-form rulemaking will lessen the financial burden on applicants for certified residential real estate appraiser credential due to decreased post-secondary education and experience requirements.
Current AQB Qualification Criteria for certified general real estate appraisers requires applicants to hold a bachelor's degree or higher. This Federal requirement represents an increase in education as compared to the Board's existing regulations. However, because the bachelor's degree is Federally mandated, the Board implemented this requirement on January 1, 2015. Similarly, the regulatory amendments that require licensed appraiser trainees to obtain 28 classroom hours of continuing education reflect the amendments in Act 72 and the current AQB Qualification Criteria and are mandated for compliance with Federal requirements. The Board's amendments also require an official criminal history record information check from the State Police or other state agency for every state in which the candidate has lived or worked during the past 5 years. This final-form rulemaking will have a fiscal impact on the regulated community due to the cost of continuing education for licensed appraiser trainees (total annual cost of approximately $105,315) and criminal history record information checks (annual cost of approximately $7,480).
Regarding paperwork requirements, the Board has revised its application forms to reflect the current Federal standards. Therefore, the Board does not anticipate additional paperwork requirements. This final-form rulemaking requires completion of experience logs for licensed appraiser trainees and certified residential real estate appraisers pursuing experience credit.
Sunset Date
The Board continuously monitors the effectiveness of the regulations and will continue to do so with respect to these regulations. Therefore, no sunset date has been assigned.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P.S. § 745.5(a)), on June 22, 2018, the Board submitted a copy of the proposed rulemaking, published at 48 Pa.B. 3955, and a copy of a Regulatory Analysis form to IRRC and to the Chairpersons of the Senate Consumer Protection and Professional Licensure Committee (SCP/PLC) and the House Professional Licensure Committee (HPLC) for review. A copy of this material is available to the public upon request.
Under section 5(c) of the Regulatory Review Act (71 P.S. § 745.5(c)), IRRC and the House and Senate Committees 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 regulation, the Board has considered the comments received from IRRC, the House and Senate Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P.S. § 745.5a(j.2)), on September 18, 2019, the final-form rulemaking was deemed approved by the HPLC and by the SCP/PLC. Under section 5.1(e) of the Regulatory Review Act, IRRC met on September 19, 2019, and approved this final-form rulemaking.
Additional Information
Further information may be obtained by contacting Heidy Weirich, Board Administrator, State Board of Certified Real Estate Appraisers, P.O. Box 2649, Harrisburg, PA 17105-2649. Reference No. 16A-7022 (Federally-Mandated Revisions) when requesting information.
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 regulations promulgated thereunder, 1 Pa. Code §§ 7.1 and 7.2 (relating to notice of proposed rulemaking required; and adoption of regulations).
(2) A public comment period was provided as required by law.
(3) This final-form rulemaking does not include any amendments that would enlarge the scope of the proposed rulemaking published at 48 Pa.B. 3955.
(4) The final-form rulemaking adopted by this order is necessary and appropriate for the administration of the act.
Order
The Board, acting under its authorizing statute, orders that:
(a) The regulations of the Board at 49 Pa. Code Chapter 36, are amended by amending §§ 36.1—36.3, 36.11, 36.12, 36.12a, 36.13, 36.41—36.43 and 36.54 to read as set forth in Annex A.
(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 submit this order and Annex A to IRRC, the HPLC and the SCP/PLC as required by law.
(d) The Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(e) This final-form rulemaking shall take effect upon publication in the Pennsylvania Bulletin.
JOSEPH D. PASQUARELLA,
Chairperson(Editor's Note: See 49 Pa.B. 5769 (October 5, 2019) for IRRC's approval order.)
Fiscal Note: Fiscal Note 16A-7022 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. GENERAL PROVISIONS
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—The independent board of The Appraisal Foundation that establishes the minimum education, experience, examination and continuing education requirements for real property appraisers under Title XI of FIRREA (12 U.S.C.A. §§ 3331—3356). The term includes any successor organization as designated by the United States Congress or the ASC.
AQB Qualification Criteria—The AQB publication, The Real Property Appraiser Qualification Criteria, establishing the minimum education, experience, examination and continuing education requirements for real property appraisers to obtain a state license or certification. The publication may be accessed at The Appraisal Foundation web site at www.appraisalfoundation.org.
ASC—The Appraisal Subcommittee of the Federal Financial Institutions Examination Council.
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 ensure that the report is consistent and mathematically correct.
Board—The State Board of Certified Real Estate Appraisers within the Bureau of Professional and Occupational Affairs in the Department of State 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—Except as otherwise required by AQB Qualification Criteria, 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-ROM 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 (Pub.L. No. 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.
In good standing—
(i) When referring to an individual certified or licensed by the Board to perform appraisals, an individual who is authorized under the act to perform appraisals or to act as a licensed appraiser trainee.
(ii) The term includes an individual who has an active, unrestricted certificate or license, or a certificate or license that is on probation or subject to a restriction ordered by the Board.
(iii) The term does not include an individual who holds a certificate or license that is inactive, expired, suspended or revoked.
Licensed appraiser trainee—A person who holds a license issued under section 6(a.1) of the act and § 36.12a (relating to qualifications for licensure as appraiser trainee) and who is authorized to assist a certified residential real estate appraiser or certified general real estate appraiser in the performance of an appraisal.
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. An individual who applies for licensure as a licensed appraiser trainee or for certification as a certified residential real estate appraiser or a certified general real estate appraiser shall do all of the following:
(1) Submit an application to the Board on a form provided by the Board.
(2) Submit an official criminal history record information check from the State Police or other state agency for every state in which the candidate has lived or worked during the past 5 years. A report must be dated within 90 days of the date of application.
(3) Pay the required application fee in the amount prescribed in § 36.6 (relating to fees).
(4) Satisfy the requirements for licensure or certification in this subchapter.
(5) Satisfy the requirements in the AQB Qualification Criteria.
(b) Application fee. The payment of a fee for processing an application is nonrefundable and must satisfy the following conditions:
(1) The application fee must be in the amount in § 36.6.
(2) Payment of the application fee must be in the form of a personal check or money order payable to ''Commonwealth of Pennsylvania'' or an electronic payment in a form or method approved by the Commissioner of Professional and Occupational Affairs.
(c) Approved applications. Residential real estate appraiser and general real estate appraiser certification applications approved by the Board are subject to all of the following conditions:
(1) Approval by the Board of an initial application for certification as a residential real estate appraiser or a general real estate appraiser constitutes approval to take the examination approved by the AQB with all of the following limitations:
(i) Approval of the application will be valid for 1 year from the date of approval.
(ii) Approval of the application will be subject to subsection (e).
(iii) If an applicant does not pass the certification examination approved by the AQB within 1 year of the date of approval, the application will be deemed to be withdrawn.
(iv) If an applicant wishes to take the certification examination approved by the AQB more than 1 year after the date of approval of an application, the applicant shall file a new application that complies with subsections (a) and (b).
(2) Approval by the Board of an application for licensure as an appraiser trainee, certification as a residential real estate appraiser or certification as a general real estate appraiser under section 7 of the act (63 P.S. § 457.7), regarding reciprocity, constitutes approval to issue a license or certificate to the applicant.
(d) Disapproved applications. Subject to subsection (e), an applicant for licensure as an appraiser trainee, certification as a residential real estate appraiser or certification as a general real estate appraiser 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.
(1) 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.
(2) If a request for reconsideration is denied or, subject to 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.
(1) Residential real estate appraiser and general real estate appraiser applicants. 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) or as required by the AQB Qualification Criteria, an applicant for certification as a residential real estate appraiser or general real estate appraiser 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.
(2) Appraiser trainee applicants. Except as otherwise provided in § 36.12a (relating to qualifications for licensure as appraiser trainee), or as required by the AQB Qualification Criteria, an applicant for licensure as an appraiser trainee shall comply with any increased education requirement that takes effect between the applicant's filing of an application that is disapproved and the applicant's filing of a new application.
(f) Notification of AQB Qualification Criteria changes.
(1) Whenever the AQB adopts changes to the AQB Qualification Criteria, the Board will:
(i) Post a notice on the Board's web site.
(ii) Notify licensees by means of e-mail.
(iii) Announce the AQB Qualification Criteria changes at the next scheduled Board meeting.
(2) The Board may in its discretion publish notice of AQB Qualification Criteria changes in the Pennsylvania Bulletin.
§ 36.3. Examinations.
(a) The examination required for certification as a residential real estate appraiser or a general real estate appraiser is the AQB-approved National examination, or its equivalent, for the certification for which an applicant is applying. 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. An examination is not required for licensure as an appraiser trainee.
(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 web site.
QUALIFICATIONS FOR CERTIFICATION OR LICENSURE § 36.11. Qualifications for certification as residential real estate appraiser.
(a) General qualifications. An applicant for certification as a residential real estate appraiser shall:
(1) Be of good moral character.
(2) Satisfy the education and experience requirements prescribed by this section prior to the date of examination.
(3) Pass an AQB-approved examination for certification as a residential real estate appraiser.
(4) Satisfy the requirements in the AQB Qualification Criteria for certification as a residential real estate appraiser.
(b) Appraisal classroom hours. An applicant for certification as a residential real estate appraiser shall submit evidence to the Board of having completed the classroom hours required by the AQB Qualification Criteria as of the date of the application.
(1) Length of classroom hour and courses; course examination requirement.
(i) The length of classroom hours and courses must comply with the requirements in the AQB Qualification Criteria.
(ii) Credit toward the classroom hour requirement will be granted only if the applicant successfully completes an examination pertinent to the course and attends at least the minimum length of time, as required by the AQB Qualification Criteria, to receive course credit.
(iii) The course examination must comply with the requirements in the AQB Qualification Criteria.
(2) Providers of appraisal courses. Credit for the classroom hour requirement may be obtained from types of providers set forth in the AQB Qualification Criteria subject to the following:
(i) Credit for the classroom hour requirement may be obtained from accredited colleges or universities and community or junior colleges.
(ii) Real estate appraisal or real estate related organizations, State or Federal agencies or commissions, proprietary schools, and other providers are subject to Board approval under § 36.31 (relating to provider registration/appraisal courses).
(3) Distance education. Distance education courses must comply with the requirements in the AQB Qualification Criteria. A distance education course is acceptable to meet the classroom hour requirement if the course is approved by the Board and meets all of 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.
(c) Content of appraisal education.
(1) The content of an applicant's appraisal education must comply with the qualifying education requirements in the AQB Qualification Criteria and as specified in the Required Core Curriculum in the AQB Qualification Criteria.
(2) All courses must consist of instruction in the subject areas in Guide Note 1 of the AQB Qualification Criteria or any successor Guide Note.
(d) Postsecondary education. An applicant for certification as a residential real estate appraiser shall satisfy the postsecondary education requirements in the AQB Qualification Criteria.
(e) Experience. An applicant's experience must comply with all of the following:
(1) An applicant for certification as a residential real estate appraiser shall satisfy the experience requirements in the AQB Qualification Criteria.
(2) At least 75% of the total experience requirement 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 for preparation of appraisal reports; experience logs).
(3) 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 completed 45 classroom hours of appraisal education, including 15 hours on USPAP prior to acquiring the experience. Effective January 1, 2020, experience credit may be obtained only by individuals who possess a license as an appraiser trainee.
(4) Acceptable categories of appraisal experience include all of the following:
(i) Fee and staff appraisals.
(ii) Ad valorem tax appraisals, if the applicant can demonstrate that the applicant used techniques to value properties similar to those used by appraisers and that the applicant 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) General qualifications. An applicant for certification as a general real estate appraiser shall:
(1) Be of good moral character.
(2) Satisfy the education and experience requirements prescribed by this section as of the date of the examination.
(3) Pass an AQB-approved examination for certification as a general real estate appraiser.
(4) Satisfy all the requirements in the AQB Qualification Criteria for certification as a general real estate appraiser.
(b) Appraisal classroom hours. An applicant for certification as a general real estate appraiser shall submit evidence to the Board of having completed the classroom hours required by the AQB Qualification Criteria as of the date of application.
(1) Length of classroom hour and courses; course examination requirement.
(i) The length of classroom hours and courses must comply with the requirements in the AQB Qualification Criteria.
(ii) Credit toward the classroom hour requirement will be granted only if the applicant successfully completes an examination pertinent to the course and attends at least the minimum length of time, as required by the AQB Qualification Criteria, to receive course credit.
(iii) The course examination must comply with the requirements in the AQB Qualification Criteria.
(2) Providers of appraisal courses. Credit for the classroom hour requirement may be obtained from the types of providers set forth in the AQB Qualification Criteria subject to all of the following:
(i) Credit for the classroom hour requirement may be obtained from accredited colleges or universities and community or junior colleges.
(ii) Real estate appraisal or real estate related organizations, State or Federal agencies or commissions, proprietary schools, and other providers are subject to Board approval under § 36.31 (relating to provider registration/appraisal courses).
(3) Distance education. Distance education courses must comply with the requirements in the AQB Qualification Criteria. A distance education course is acceptable to meet the classroom hour requirement if the course is approved by the Board, and meets all of 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.
(c) Content of appraisal education.
(1) The content of an applicant's appraisal education must comply with the qualifying education requirements in the AQB Qualification Criteria and as specified in the Required Core Curriculum in the AQB Qualification Criteria.
(2) All courses must consist of instruction in the subject areas outlined in Guide Note 1 of the AQB Qualification Criteria or any successor Guide Note.
(d) Postsecondary education. An applicant for certification as a general real estate appraiser shall satisfy the postsecondary education requirements in the AQB Qualification Criteria.
(e) Experience. An applicant's experience must comply with all of the following:
(1) An applicant for certification as a general real estate appraiser shall satisfy the experience requirements in the AQB Qualification Criteria.
(2) At least 50% of the total experience requirement 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 for preparation of appraisal reports; experience logs).
(3) 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 completed 45 classroom hours of appraisal education, including 15 hours on USPAP prior to acquiring the experience. Effective January 1, 2020, experience credit can be obtained only by individuals who possess a license as an appraiser trainee or a certification as a residential real estate appraiser.
(4) Acceptable categories of appraisal experience include:
(i) Fee and staff appraisals.
(ii) Ad valorem tax appraisals, if the applicant can demonstrate that the applicant used techniques to value properties similar to those used by appraisers and that the applicant 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.
§ 36.12a. Qualifications for licensure as appraiser trainee.
(a) General qualifications. An applicant for licensure as an appraiser trainee shall:
(1) Be of good moral character.
(2) Satisfy the education requirements prescribed by this section.
(3) Complete a course that, at a minimum, complies with the specifications for course content established by the AQB Qualification Criteria, which is specifically oriented to the requirements and responsibilities of supervisory appraisers and licensed appraiser trainees.
(4) Satisfy the requirements in the AQB Qualification Criteria for licensure as an appraiser trainee.
(b) Appraisal classroom hours. An applicant for licensure as an appraiser trainee shall comply with the qualifying educational standards required by the AQB Qualification Criteria.
(1) Content of appraisal education.
(i) The content of an applicant's appraisal education must comply with the qualifying education requirements in the AQB Qualification Criteria.
(ii) All courses must consist of instruction in the subject areas outlined in Guide Note 1 of the AQB Qualification Criteria or any successor Guide Note.
(2) Length of classroom hour and courses; course examination requirement. The length of classroom hours and course requirements must comply with all of the following:
(i) The length of classroom hours and courses must comply with the requirements in the AQB Qualification Criteria.
(ii) Credit toward the classroom hour requirement will be granted only when the applicant successfully completes an examination pertinent to the course and attends at least the minimum length of time, as required by the AQB Qualification Criteria, to receive course credit.
(iii) The course examination must comply with the requirements in the AQB Qualification Criteria.
(3) Providers of appraisal courses. Credit for the classroom hour requirement may be obtained from the types of providers set forth in the AQB Qualification Criteria subject to all of the following:
(i) Credit for the classroom hour requirement may be obtained from accredited colleges or universities and community or junior colleges.
(ii) Real estate appraisal or real estate related organizations, State or Federal agencies or commissions, proprietary schools, and other providers are subject to Board approval under § 36.31 (relating to provider registration/appraisal courses).
(4) Distance education. Distance education courses must comply with the requirements in the AQB Qualification Criteria. A distance education course is acceptable to meet the classroom hour requirement if the course is approved by the Board and meets all of 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 content and classroom hours of the course meet the requirements of paragraphs (1) and (2).
(c) Noneligibility for licensure. A certified real estate appraiser is not eligible to be licensed as an appraiser trainee.
(d) Limitation on license renewal. An appraiser trainee license may not be biennially renewed more than four times unless the Board, for good cause shown and on a case-by-case basis, should determine that one or more additional renewals is warranted.
§ 36.13. Experience options for preparation of appraisal reports; experience logs.
* * * * * (b) For experience acquired before October 1, 2010, an assistant to a certified general real estate appraiser or certified residential real estate appraiser shall comply with all of the following requirements when preparing an appraisal report:
* * * * * (c) A licensed appraiser trainee shall comply with all of the following requirements when preparing an appraisal report for a certified general real estate appraiser or certified residential real estate appraiser:
* * * * * (d) A certified residential real estate appraiser shall comply with all of the following requirements when preparing an appraisal report for a certified general real estate appraiser:
(1) The residential appraiser shall perform an inspection of the interior and exterior of the property.
(2) The residential appraiser may not arrive at an independent determination of value.
(3) The residential appraiser shall comply with USPAP.
(4) The residential appraiser shall co-sign the appraisal report as set forth in § 36.52 (relating to use of certificate number and title) and ensure that the nature of his significant real property appraisal assistance is specified in the report.
(5) Jointly maintain an appraisal experience log with the general real estate appraiser on forms provided by the Board.
(e) The licensed appraiser trainee shall jointly maintain an appraisal experience log with the supervisory appraiser on forms provided by the Board. An appraisal experience log must comply with the requirements in the AQB Qualification Criteria.
CONTINUING EDUCATION § 36.41. Continuing education requirement.
(a) Continuing education for certified real estate appraisers and licensed appraiser trainees is necessary to ensure that they maintain and increase their skill, knowledge and competency in real estate appraising. Except as provided in subsection (b), certified real estate appraisers and licensed appraiser trainees shall satisfy the continuing education requirements in the AQB Qualification Criteria, which must include 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, residential real estate appraiser or licensed appraiser trainee whose initial certification or license 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.
§ 36.42. Subject matter and sources of continuing education.
(a) Continuing education subject matter and sources must comply with the requirements in the AQB Qualification Criteria.
(b) Subjects acceptable for continuing education include the subjects set forth by the AQB Qualification Criteria.
(c) Credit for the classroom hour requirement may be obtained from 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.
(d) Educational offerings which cover real estate appraisal related topics other than those in subsection (b) may be acceptable for continuing education credit if the applicant can demonstrate to the Board that the topic or program contributed to the applicant's professional competence and is consistent with the purpose of continuing education as stated in § 36.41 (relating to continuing education requirement).
§ 36.43. Distance education.
Distance education courses must comply with the requirements in the AQB Qualification Criteria. A distance education course is acceptable for continuing education credit if it is approved by the Board and meets all of 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 or the licensed appraiser trainee 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 subject matter and sources of continuing education).
STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE § 36.54. Duties of supervisory appraiser.
* * * * * (b) A certified residential real estate appraiser or certified general real estate appraiser who utilizes a licensed appraiser trainee shall:
(1) Have at least 5 years of experience as a residential real estate or general real estate appraiser.
(2) Comply with the supervisory appraiser requirements in the AQB Qualification Criteria.
(3) Provide written notification to the Board of the name and address of the licensed appraiser trainee before the trainee begins work for the appraiser.
(4) Be a certified residential real estate appraiser or certified general real estate appraiser in this Commonwealth for at least 3 years immediately preceding the supervisory appraiser's notification to the Board.
(5) Be a certified residential real estate appraiser or certified general real estate appraiser in good standing in this Commonwealth.
(i) The supervisory appraiser shall be in good standing in this Commonwealth for a period of at least 3 years immediately preceding the supervisory appraiser's notification to the Board.
(ii) The supervisory appraiser shall be in good standing while serving as a supervisor.
(6) Have not received from the Board or any jurisdiction any disciplinary action that affects or affected the supervisor's legal eligibility to engage in appraisal practice within 3 years immediately preceding the supervisory appraiser's notification to the Board.
(7) Prior to supervising a licensed appraiser trainee, complete a course, that, at a minimum, complies with the specifications for course content established by the AQB Qualification Criteria, which is specifically oriented to the requirements and responsibilities of supervisory appraisers and licensed appraiser trainees.
(8) Supervise no more than three licensed appraiser trainees at one time.
(9) Directly supervise and control the licensed appraiser trainee's work, assuming total responsibility for the contents of the appraisal report, including all value conclusions.
(10) Accompany the licensed appraiser trainee during the physical inspection of the property until the licensed appraiser trainee has logged 300 hours of appraisal experience or until the supervising appraiser determines the licensed appraiser trainee is competent under USPAP to perform the physical inspection unaccompanied, whichever is the longer period.
(11) Co-sign a Board-approved appraiser trainee checklist that has been completed by the licensed appraiser trainee, relates to the licensed appraiser trainee's work on the appraisal report and is made part of the appraisal report submitted to the client.
(12) Jointly maintain an appraisal experience log with the licensed appraiser trainee. An appraisal experience log must comply with the requirements in the AQB Qualification Criteria.
(13) Provide a current or former licensed appraiser trainee who is applying for appraiser certification with copies of designated appraisal reports requested by the Board to verify the licensed appraiser trainee's experience.
(c) A certified general real estate appraiser who utilizes a certified residential real estate appraiser as an assistant for an appraisal of nonresidential property or an appraisal of residential property of more than four dwelling units shall:
(1) Directly supervise and control the residential appraiser's work, assuming total responsibility for the contents of the appraisal report, including all value conclusions.
(2) Accompany the residential appraiser during the physical inspection of the property until the general appraiser determines the residential appraiser is competent under USPAP to perform the physical inspection unaccompanied.
(3) Co-sign the appraisal report as set forth in § 36.52 and specify in the appraisal report the nature of the significant real property appraisal assistance rendered by the residential appraiser.
(4) Provide the residential appraiser, at the time of application for general appraiser certification, with copies of designated appraisal reports requested by the Board to verify the residential appraiser's experience.
(5) Jointly maintain an appraisal experience log with the general real estate appraiser on forms provided by the Board.
(6) Comply with the requirements in the AQB Qualification Criteria.
[Pa.B. Doc. No. 19-1666. Filed for public inspection November 1, 2019, 9:00 a.m.]
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