20141126-IR-876140304PRA Amends 876 IAC 3-3-2 to require that individuals seeking licensure under the current requirements also pass the licensing examination before January 1, 2015. Amends 876 IAC 3-3-3.1 to require that ap...

TITLE 876 INDIANA REAL ESTATE COMMISSION

Proposed Rule LSA Document #14-304

DIGEST

Amends 876 IAC 3-3-2 to require that individuals seeking licensure under the current requirements also pass the licensing examination before January 1, 2015. Amends 876 IAC 3-3-3.1 to require that appraiser trainees complete a supervisor/trainee course to meet licensure requirements and require that qualifying education be completed within the five years prior to the date of application. Amends 876 IAC 3-3-4.1 to require a bachelor's degree for licensure as a certified residential appraiser and to allow qualifying education to be obtained through an accredited college or university. Amends 876 IAC 3-3-5.1 to require a bachelor's degree for licensure as a certified general appraiser and to allow qualifying education to be obtained through an accredited college or university. Amends 876 IAC 3-6-9 to require certified residential and certified general appraisers to hold an Indiana certification for at least three years before acting as a supervisor, have no disciplinary action taken within the last three years against an appraiser license or certification in any jurisdiction that affects the supervisory appraiser's legal ability to engage in appraisal practice, and allow a supervisor to supervise up to three trainees at the same time. Amends 876 IAC 3-6-10 to require that certified residential and certified general appraisers complete the supervisor/trainee course prior to commencing association with an appraiser trainee and modify the requirements of the course. Repeals 876 IAC 3-3-5.2. Effective January 1, 2015.

876 IAC 3-3-2; 876 IAC 3-3-3.1; 876 IAC 3-3-4.1; 876 IAC 3-3-5.1; 876 IAC 3-3-5.2; 876 IAC 3-6-9; 876 IAC 3-6-10

SECTION 1. 876 IAC 3-3-2 IS AMENDED TO READ AS FOLLOWS:

876 IAC 3-3-2 Admittance to examination

Authority: IC 25-34.1-3-8

Affected: IC 25-34.1

Sec. 2. (a) To be admitted to the examination for any of the licenses, an applicant must:

(1) meet all the requirements for the license for which application has been made except for the passing of the examination;

(2) complete the application provided for in section 15 of this rule; and

(3) pay the applicant's cost of purchasing the examination, payable to the examination service.

(b) Notwithstanding subsection (a), individuals who are admitted to the examination under the education and experience requirements in effect before January 1, 2015, must also pass the examination before January 1, 2015, to qualify for the license or certification for which the individual has applied.

(Indiana Real Estate Commission; 876 IAC 3-3-2; filed Sep 24, 1992, 9:00 a.m.: 16 IR 738; filed Jun 14, 1995, 11:00 a.m.: 18 IR 2791; readopted filed May 29, 2001, 10:00 a.m.: 24 IR 3238; readopted filed Jul 19, 2007, 1:16 p.m.: 20070808-IR-876070068RFA; readopted filed Nov 25, 2013, 9:21 a.m.: 20131225-IR-876130283RFA)

SECTION 2. 876 IAC 3-3-3.1 IS AMENDED TO READ AS FOLLOWS:

876 IAC 3-3-3.1 Educational requirements for Indiana licensed trainee appraiser

Authority: IC 25-34.1-3-8

Affected: IC 25-34.1

Sec. 3.1. (a) This section establishes the educational requirements for the Indiana trainee appraiser license.

(b) The minimum prerequisite to sit for the Indiana trainee appraiser examination is ninety (90) classroom hours of specific course content stated in subsection (g) and completion of the supervisor/trainee appraiser course as outlined in 876 IAC 3-6-9.

(c) A classroom hour is defined as fifty (50) minutes of classroom lecture out of each sixty (60) minute segment.

(d) Credit toward the classroom hour requirement may only be granted where the:

(1) length of the educational offering is at least fifteen (15) hours; and

(2) individual successfully completes an a written, proctored examination pertinent to that educational offering.

(e) Credit for the classroom hour requirement must be from a course, including a distance learning course, approved by the Appraisal Qualifications Board. Credit towards qualifying education requirements may be obtained through the completion of a degree program in real estate from an accredited degree-granting college or university provided that the curriculum has been approved by the Appraisal Qualifications Board.

(f) Qualifying education credit will be accepted regardless of when the courses were taken as long as they were taken before the application was filed must be completed within the five (5) year period prior to the date the application was filed.

(g) The minimum classroom hours shall be as follows:

	Basic appraisal principles	30
	Basic appraisal procedures	30
	The fifteen (15) hour National Uniform Standards of Professional Appraisal Practice course or its equivalent	15
	Electives – in any other topic allowed under section 4.1(i) 4.1(h) or 5.1(h) of this rule	15
	TOTAL	90

(h) For a course to meet the fifteen (15) hours of Uniform Standards of Professional Appraisal Practice requirement under subsection (g) after December 31, 2003, the instructor must be:

(1) an Appraiser Qualification Board certified Uniform Standards of Professional Appraisal Practice instructor; and

(2) a state certified residential or certified general real estate appraiser.

However, if the course is taught by two (2) or more instructors, only one (1) is required to have been a state certified residential or certified general real estate appraiser.

(i) Notwithstanding subsection (h), the fifteen (15) hours of Uniform Standards of Professional Appraisal Practice course will meet the requirements under subsection (g) if the course was taken before January 1, 2004.

(Indiana Real Estate Commission; 876 IAC 3-3-3.1; filed Dec 8, 1993, 4:00 p.m.: 17 IR 773; readopted filed May 29, 2001, 10:00 a.m.: 24 IR 3238; readopted filed Jul 19, 2007, 1:16 p.m.: 20070808-IR-876070068RFA; filed Aug 15, 2007, 10:01 a.m.: 20070912-IR-876060095FRA, eff Jan 1, 2008; filed Aug 28, 2013, 10:24 a.m.: 20130925-IR-876120610FRA)

SECTION 3. 876 IAC 3-3-4.1 IS AMENDED TO READ AS FOLLOWS:

876 IAC 3-3-4.1 Educational requirements for Indiana certified residential appraiser

Authority: IC 25-34.1-3-8

Affected: IC 25-34.1

Sec. 4.1. (a) This section establishes the educational requirements for an Indiana certified residential appraiser.

(b) The minimum prerequisite to sit for the Indiana certified residential appraiser examination is two hundred (200) classroom hours of specific course content stated in subsection (i) (h) and meeting the requirements in subsection (g). or (h).

(c) A classroom hour is defined as fifty (50) minutes of classroom lecture out of each sixty (60) minute segment.

(d) Credit toward the classroom hour requirement may only be granted where the:

(1) length of the educational offering is at least fifteen (15) hours; and

(2) individual successfully completes an a written, proctored examination pertinent to that educational offering.

(e) Credit for the classroom hour requirement must be from a course, including a distance learning course, approved by the Appraisal Qualifications Board. Credit towards qualifying education requirements may be obtained through the completion of a degree program in real estate from an accredited degree-granting college or university provided that the curriculum has been approved by the Appraisal Qualifications Board.

(f) Qualifying education credit will be accepted regardless of when the courses were taken as long as they were taken before the application was filed.

(g) Applicants for licensure as a certified residential appraiser must hold an associate a bachelor's degree or higher from an accredited college or university. or community or junior college.

(h) Notwithstanding subsection (g), in lieu of an associate degree, an applicant for licensure as a certified residential appraiser must successfully complete twenty-one (21) semester credit hours in the following subject matter courses from an accredited college or university, or junior or community college:

(1) English composition.

(2) Principles of microeconomics or macroeconomics.

(3) Finance.

(4) Algebra, geometry, or higher mathematics.

(5) Statistics.

(6) Introduction to computers, including word processing and spreadsheets.

(7) Business or real estate law.

(i) (h) The minimum qualifying education classroom hours shall be as follows:

	Basic appraisal principles	30
	Basic appraisal procedures	30
	The fifteen (15) hour National Uniform Standards of Professional Appraisal Practice course or its equivalent	15
	Residential market analysis and highest and best use	15
	Residential appraiser site valuation and cost approach	15
	Residential sales comparison and income approaches	30
	Residential report writing and case studies	15
	Statistics, modeling, and finance	15
	Advanced residential applications and case studies	15
	Appraisal subject matter electives	20
	TOTAL	200

(j) (i) For a course to meet the fifteen (15) hours of Uniform Standards of Professional Appraisal Practice requirement under subsection (i) (h) after December 31, 2003, the instructor must be:

(1) an Appraiser Qualification Board certified Uniform Standards of Professional Appraisal Practice instructor; and

(2) a state certified residential or certified general real estate appraiser.

However, if the course is taught by two (2) or more instructors, only one (1) is required to have been a state certified residential or certified general real estate appraiser.

(k) (j) Notwithstanding subsection (j), (i), the fifteen (15) hours of Uniform Standards of Professional Appraisal Practice course will meet the requirements under subsection (i) (h) if the course was taken prior to January 1, 2004.

(Indiana Real Estate Commission; 876 IAC 3-3-4.1; filed Aug 15, 2007, 10:01 a.m.: 20070912-IR-876060095FRA, eff Jan 1, 2008; filed Aug 28, 2013, 10:24 a.m.: 20130925-IR-876120610FRA)

SECTION 4. 876 IAC 3-3-5.1 IS AMENDED TO READ AS FOLLOWS:

876 IAC 3-3-5.1 Educational requirements for Indiana certified general appraiser

Authority: IC 25-34.1-3-8

Affected: IC 25-34.1

Sec. 5.1. (a) This section establishes the educational requirements for an Indiana certified general appraiser.

(b) The prerequisite to sit for the Indiana certified general appraiser examination is three hundred (300) classroom hours with specific course content stated in subsection (h) and meeting the requirements in subsection (f) or (g).

(c) A classroom hour is defined as fifty (50) minutes of classroom lecture out of each sixty (60) minute segment.

(d) Credit toward the classroom hour requirement may only be granted where the:

(1) length of the educational offering is at least fifteen (15) hours; and

(2) individual successfully completes an a written, proctored examination pertinent to that educational offering.

(e) Credit for the classroom hour requirement must be from a course, including a distance learning course, approved by the Appraisal Qualifications Board. Credit towards qualifying education requirements may be obtained through the completion of a degree program in real estate from an accredited degree-granting college or university provided that the curriculum has been approved by the Appraisal Qualifications Board.

(f) Qualifying education credit will be accepted regardless of when the courses were taken as long as they were taken before the application was filed.

(f) (g) Applicants for licensure as a certified general appraiser must hold a bachelor's degree or higher from an accredited college or university. or community or junior college.

(g) Notwithstanding subsection (f), in lieu of a bachelor's degree, an applicant for licensure as a certified general appraiser must successfully complete thirty (30) semester credit hours in the following subject matter courses from an accredited college, university, or junior or community college:

(1) English composition.

(2) Microeconomics.

(3) Macroeconomics.

(4) Finance.

(5) Algebra, geometry, or higher mathematics.

(6) Statistics.

(7) Introduction to computers, including word processing and spreadsheets.

(8) Business or real estate law.

(9) Two (2) elective courses in any of the following:

(A) Accounting.

(B) Geography.

(C) Ag-economics.

(D) Business management.

(E) Real estate.

(h) The minimum qualifying education classroom hours shall be as follows:

	Basic appraisal principles	30
	Basic appraisal procedures	30
	The fifteen (15) hour National Uniform Standards of Professional Appraisal Practice course or its equivalent	15
	General appraiser market analysis and highest and best use	30
	Statistics, modeling, and finance	15
	General appraiser sales comparison approach	30
	General appraiser site valuation and cost approach	30
	General appraiser income approach	60
	General appraiser report writing and case studies	30
	Appraisal subject matter electives	30
	TOTAL	300

(i) For a course to meet the fifteen (15) hours Uniform Standards of Professional Appraisal Practice requirement under subsection (h) after December 31, 2003, the instructor must be:

(1) an Appraiser Qualification Board certified Uniform Standards of Professional Appraisal Practice instructor; and

(2) a state certified residential or certified general real estate appraiser.

However, if the course is taught by two (2) or more instructors, only one (1) is required to have been a state certified residential or certified general real estate appraiser.

(j) Notwithstanding subsection (i), the fifteen (15) hours of Uniform Standards of Professional Appraisal Practice course will meet the requirements under subsection (h) if the course was taken before January 1, 2004.

(Indiana Real Estate Commission; 876 IAC 3-3-5.1; filed Aug 15, 2007, 10:01 a.m.: 20070912-IR-876060095FRA, eff Jan 1, 2008; filed Aug 28, 2013, 10:24 a.m.: 20130925-IR-876120610FRA)

SECTION 5. 876 IAC 3-6-9 IS AMENDED TO READ AS FOLLOWS:

876 IAC 3-6-9 Indiana licensed trainee appraisers; supervision

Authority: IC 25-34.1-3-8

Affected: IC 25-34.1

Sec. 9. (a) This section establishes requirements for the use and supervision of licensed trainee appraisers.

(b) Indiana licensed trainee appraisers shall be subject to direct supervision, including inspection of all properties except as allowed by subsection (i), by a supervising appraiser who:

(1) shall be a certified residential appraiser or certified general appraiser in Indiana for at least three (3) years prior to the date of application under 876 IAC 3-3-22(b);

(2) has had no disciplinary action taken within the last two (2) three (3) years against an appraiser license or certification in Indiana or any other jurisdiction that affects the supervisory appraiser's legal ability to engage in appraisal practice;

(3) does not have an appraiser license or certificate, in Indiana or any other jurisdiction, currently on probation or suspended or has been revoked; and

(4) completes a board approved supervisor/trainee appraiser's course as required by section 10 of this rule.

(c) The supervising appraiser shall be responsible for the direct supervision of the Indiana licensed trainee appraiser by signing and certifying the report as in compliance with the Uniform Standards of Professional Appraisal Practice.

(d) The Indiana licensed trainee appraiser is permitted to have more than one (1) supervising appraiser in the office of the supervising appraiser with whom the Indiana licensed trainee appraiser has associated under 876 IAC 3-3-22. Such an additional supervisor shall be acting in substitution for the supervising appraiser identified under 876 IAC 3-3-22 and is only responsible for the Indiana licensed trainee appraiser on appraisals where such responsibility is assumed by the additional supervisor, at the consent of the supervisor of record identified under 876 IAC 3-3-22. Overall responsibility for the trainee appraiser remains with the supervisor of record as long as the association with the trainee appraiser is in effect under 876 IAC 3-3-22.

(e) An appraiser may not be the supervising appraiser for more than two (2) three (3) trainees.

(f) An appraisal log shall be maintained by the Indiana licensed trainee appraiser and supervising appraiser and shall, at a minimum, include the following for each appraisal:

(1) Client name.

(2) Address of appraised property.

(3) Description of work performed and scope of the review and supervision of the supervising appraiser.

(4) Number of work hours.

(5) Type of property.

(6) Date of report.

(g) The supervising appraiser shall:

(1) review and sign the appraisal log annually;

(2) provide the log to the trainee; and

(3) include his or her state certification number.

It is the responsibility of the trainee to retain the log for submission to the board with any future application for license certification. The trainee appraiser shall be entitled to copies of appraisals, including appraisal reports and any work files, that the trainee appraiser completes. However, the original records shall be maintained at the office of the supervising appraiser.

(h) Separate appraisal logs shall be maintained by each supervising appraiser.

(i) The Indiana licensed trainee appraiser shall be subject to direct supervision until the Indiana licensed trainee appraiser is competent in accordance with the Competency Provision of the Uniform Standards of Professional Appraisal Practice, as adopted in section 2 of this rule, to perform appraisals for the specific property type. After the Indiana licensed trainee appraiser demonstrates competency, the supervising appraiser is not required to inspect the properties. However, the supervising appraiser must continue to sign and accept full responsibility for all appraisals performed by the Indiana licensed trainee appraiser.

(j) In addition to the requirements in subsection (i), the supervising appraiser shall accompany the Indiana licensed trainee appraiser and inspect the subject and comparable properties on the following appraisal assignments:

(1) The first fifty (50) assignments performed by the trainee where the scope of the work includes a physical inspection of the property.

(2) During the first year the trainee holds an active license, all assignments located more than fifty (50) miles from the supervising appraiser's office.

(k) The supervising appraiser and the licensed trainee appraiser shall meet with each other on a reasonable schedule to interact about the appraisal work of the trainee.

(l) Subsections (e) and (j) do not apply when an Indiana licensed trainee appraiser is an employee of a governmental entity acting in the course of the governmental entity's activities.

(Indiana Real Estate Commission; 876 IAC 3-6-9; filed Dec 8, 1993, 4:00 p.m.: 17 IR 782; filed Apr 10, 1995, 10:00 a.m.: 18 IR 2124; readopted filed May 29, 2001, 10:00 a.m.: 24 IR 3238; filed Dec 3, 2002, 3:00 p.m.: 26 IR 1108; filed Dec 1, 2003, 9:45 a.m.: 27 IR 1182; readopted filed Jul 19, 2007, 1:16 p.m.: 20070808-IR-876070068RFA; filed Aug 15, 2007, 10:01 a.m.: 20070912-IR-876060095FRA, eff Jan 1, 2008; errata filed Jan 23, 2008, 10:22 a.m.: 20080206-IR-876060095ACA; filed Apr 16, 2012, 3:43 p.m.: 20120516-IR-876110428FRA; readopted filed Nov 25, 2013, 9:21 a.m.: 20131225-IR-876130283RFA)

SECTION 6. 876 IAC 3-6-10 IS AMENDED TO READ AS FOLLOWS:

876 IAC 3-6-10 Indiana licensed trainee appraisers; supervisor/trainee appraiser course

Authority: IC 25-34.1-3-8

Affected: IC 25-34.1-8

Sec. 10. (a) A supervising appraiser under section 9 of this rule shall successfully complete a supervising supervisor/trainee appraiser course in order to be a supervising appraiser. The course must be completed

(1) within six (6) months after the commencement of an association with an Indiana licensed trainee appraiser under 876 IAC 3-3-22; and

(2) by the end of the third two (2) year renewal period after the initial, and each subsequent, completion of the course as long as the appraiser continues to function as a supervising appraiser.

Notwithstanding subdivision (1), supervising appraisers who are associated with an Indiana licensed trainee appraiser on the effective date of this section shall initially complete the course no later than June 30, 2013.

(b) If a supervising appraiser does not complete the mandatory supervisor appraiser's course by a required date, the supervising appraiser may no longer function as a supervising appraiser immediately upon not meeting the required date. prior to commencement of association with a trainee appraiser.

(c) (b) The supervising appraiser's supervisor/trainee appraiser course shall qualify for continuing education credit for the supervising appraiser under 876 IAC 3-5.

(d) A supervising appraiser course shall meet the requirements applicable for board approved continuing education courses under 876 IAC 3-5 and the requirements of this section. Notwithstanding 876 IAC 3-5-2(a), this course shall be approved by the board and not the Appraisal Qualifications Board (AQB).

(e) (c) A supervising supervisor/trainee appraiser course shall be approved by the board or the Appraisal Qualifications Board and shall include fourteen (14) hours of instruction on real estate appraising and related topics as required in this rule, and a one (1) hour examination, that presents the following topics and materials:

(1) The history of the appraisal profession leading to the creation of the Appraisal Foundation, the state appraiser boards, and the other regulatory changes.

(2) The function of the Appraisal Foundation.

(3) The function of the Appraisal Subcommittee (ASC).

(4) The Financial Institutions Reform and Recovery Act (FIRREA).

(5) The Indiana law concerning real estate appraising with specific discussion of IC 25-34.1-8, the board's rules, this article, and any significant changes within the last thirty-six (36) months.

(6) The 2010 Frank-Dodd Bill – subtitle F – Appraisal Activities.

(7) Statistics for appraisers and supervisors.

(8) Mortgage loan analysis and time value of money calculations.

(9) A supervisor's review of residential appraisal forms.

(10) Case studies focused on recent issues before the board and common problems.

(f) A supervising appraiser course must also meet the following requirements:

(1) The course must reflect the most current version of the board's rules including the Uniform Standards of Professional Appraisal Practice.

(2) The course materials or syllabus must include a course description, which clearly describes the content of the course.

(3) Compliance with 876 IAC 3-5-2.5(b)(2)(B) shall be specific to a supervising appraiser's course.

(4) Instructional materials for students must be provided to each student in compliance with 876 IAC 3-5-2.5(b)(3). The exception in that provision that allows materials not to be provided in some situations shall not apply to this section.

(g) The examination for the course must comply with the following criteria:

(1) Include a one (1) hour examination that must consist of a series of questions that test the student's ability to comprehend the material included in the course material.

(2) Contain a sufficient number of questions to adequately test the subject matter covered in the course. The minimum number of questions shall be twenty-five (25).

(3) Have a maximum examination writing time of one (1) hour.

(4) Examination questions must, individually and collectively, test at a difficulty level appropriate to measure attendee achievement of the stated course learning objectives.

(5) The subject matter tested by examination questions must be adequately addressed in the course instructional materials.

(6) Examination questions must be written in a clear and unambiguous manner.

(7) Examination questions must be accurate, and the intended correct answer must clearly be the best answer choice.

(8) At least fifty percent (50%) of the examination questions must be focused on provisions of this article.

(9) A student may only retake the written examination twice before attendance in another course is required.

(h) The instructor for the supervising appraiser course must:

(1) be a current certified appraiser as listed on the ASC roster;

(2) be a current AQB certified USPAP instructor as approved and maintained by the AQB of the Appraisal Foundation; and

(3) have attended at least two (2) regularly scheduled meetings of the board in the twelve (12) months preceding the offering of the supervising appraiser course. Attendance is defined as personal attendance for at least seventy-five percent (75%) of the hours the board meeting is in session.

(i) Upon completion of the supervising appraiser course, the provider of the approved supervising appraiser course shall provide the board with a list of all attendees with determination of who passed the examination. provide adequate information to ensure the supervisory appraiser and trainee appraiser understand the qualifications and responsibilities of that role. Specifically, the objective of the course shall be that the student understands the following:

(1) Appraisal Qualifications Board minimum qualifications for becoming and remaining a supervisory appraiser, as well as jurisdictional licensure or certification requirements that may exceed those of the Appraisal Qualifications Board.

(2) Appraisal Qualifications Board minimum qualifications for becoming a trainee appraiser.

(3) Expectations and responsibilities of the supervisory appraiser.

(4) Expectations and responsibilities of the trainee appraiser.

(5) Processes and roles of the entities involved in establishing qualifications for certified and licensed appraisers.

(6) Qualifications to become a certified or licensed appraiser.

(7) Basics of the Uniform Standards of Professional Appraisal Practice.

(8) Responsibilities and requirements of a supervisory appraiser in maintaining and signing all appropriate trainee appraiser experience logs.

(9) Responsibilities and requirements of a trainee appraiser's role in maintaining and signing all appropriate trainee appraiser experience logs.

(Indiana Real Estate Commission; 876 IAC 3-6-10; filed Apr 16, 2012, 3:43 p.m.: 20120516-IR-876110428FRA; readopted filed Nov 25, 2013, 9:21 a.m.: 20131225-IR-876130283RFA)

SECTION 7. 876 IAC 3-3-5.2 IS REPEALED.

SECTION 8. SECTIONS 1 through 7 of this document take effect January 1, 2015.

Posted: 11/26/2014 by Legislative Services Agency

DIN: 20141126-IR-876140304PRA

Composed: Nov 01,2016 1:57:11AM EDT

A PDF version of this document.