Code of Colorado Regulations
700 - Department of Regulatory Agencies
725 - Division of Real Estate
4 CCR 725-2 - RULES GOVERNING THE PRACTICE OF REAL ESTATE APPRAISERS OF THE BOARD OF REAL ESTATE APPRAISERS
Chapter 1 - DEFINITIONS

1.1. FIRREA: The Financial Institutions Reform, Recovery and Enforcement Act of 1989 as amended.

1.2. Title XI, FIRREA: That part of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 known as the Appraisal Reform Amendments, and also known as 12 U.S.C. sections 3331 through 3355, as amended.

1.3. Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council: A subcommittee created within the Federal Financial Institutions Examination Council as a result of Title XI, FIRREA, or its successor entity, to provide oversight of the appraiser regulatory system.

1.4. The Appraisal Foundation (TAF): An organization that is the source of appraisal standards, qualifications, and ethical conduct in all valuation disciplines to assure public trust in the valuation profession.

1.5. Appraiser Qualifications Board (AQB) of TAF: The AQB establishes the minimum education, experience, and Examination requirements for real property appraisers to obtain state certifications. In addition, the AQB performs a number of ancillary duties related to real property and personal property appraiser qualifications.

1.6. Appraisal Standards Board (ASB) of TAF: The ASB develops, interprets, and amends the USPAP.

1.7. Division of Real Estate (Division): Has the same meaning pursuant to section 12-10-101(2), C.R.S.

1.8. Director of the Division (Director): Has the same meaning pursuant to section 12-10-101(1), C.R.S.

1.9. Colorado Real Estate Appraiser Licensing Act: That portion of Colorado statutes known as sections 12-10-601 through 623, et seq., C.R.S. as amended.

1.10. Board: The Colorado Board of Real Estate Appraisers created and further defined pursuant to section 12-10-603, C.R.S.

1.11. Board Rules or Rules: Those rules adopted by the Board pursuant to the Colorado Real Estate Appraiser Licensing Act.

1.12 Real Property Appraiser Qualification Criteria (Criteria): Pursuant to section 12-10-606(1) and (2), C.R.S. as amended, the Board incorporates by reference in compliance with section 24-4-103 (12.5), C.R.S., the Real Property Appraiser Qualification Criteria adopted by the AQB of TAF on August 24, 2021, including the Required Core Curricula, Guide Notes, and Interpretations relating to the real property appraiser classifications as defined in Rules 1.21., 1.22., and 1.23. This Rule 1.12. excludes and does not incorporate by reference the following: the trainee real property appraiser classification and qualification requirements; the supervisory appraiser requirements; supervisory appraiser/trainee appraiser course objectives and outline; or any later amendments or additions of the Criteria. A certified copy of the Real Property Appraiser Qualification Criteria is on file and available for public inspection at the Office of the Board at 1560 Broadway, Suite 925, Denver, Colorado 80202. Copies of the Real Property Appraiser Qualification Criteria may be examined at the Internet website of TAF at www.appraisalfoundation.org, and copies may be ordered through that mechanism. TAF may also be contacted at 1155 15th Street, NW, Suite 1111, Washington, DC 20005, or by telephone at (202) 347-7722 or telefax at (202) 347-7727. The Real Property Appraiser Qualification Criteria is effective as of January 1, 2022.

1.13. Uniform Standards of Professional Appraisal Practice (USPAP): has the same meaning pursuant to section 12-10-602(10), C.R.S.

1.14. Jurisdiction: All fifty (50) states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, and the United States Virgin Islands.

1.15. Examination: The examination(s) developed by or contracted for the Board and issued or approved by the AQB, if applicable.

1.16. Person: A natural person or an organization, partnership, proprietorship, association, cooperative, estate, trust, or government unit.

1.17. Applicant: Any Person applying for a license, Credential Upgrade, or Temporary Practice Permit.

1.18. Initial License: The first license granted by the Board to an Applicant pursuant to section 12-10-606, C.R.S. An Applicant may apply for an initial license at any credential level as long as all requirements for such credential level have been met pursuant to these Rules. An initial license is valid through December 31 of the year of issuance.

1.19. Credential Upgrade: A Licensee, who has been granted a license pursuant to section 12-10-606, C.R.S., may submit an application to the Board requesting an upgrade of the Licensee's credential if the Licensee has completed the real estate appraisal Qualifying Education, experience, and Examination requirements as set forth in Chapter 2 of these Rules for the credential for which the Licensee is applying. If the Board grants the requested credential, the upgraded license will expire on the same date of the Licensee's current license cycle prior to the upgrade.

1.20. Licensee: A collective term used to refer to a Person who has been licensed by the Board as a Licensed Ad Valorem Appraiser, Licensed Appraiser, Certified Residential Appraiser, Certified General Appraiser, Controlling Appraiser, or an AMC as applicable.

1.21. Licensed Appraiser: A Person who has been granted a license pursuant to section 12-10-606(1)(b)(IV), C.R.S. as a Licensed Appraiser by the Board as a result of meeting the real estate appraisal Qualifying Education, experience, and Examination requirements as set forth in Rule 2.2., or as a result of licensure through endorsement from another Jurisdiction as set forth in Chapter 9 of these Rules. The scope of practice for the Licensed Appraiser is limited to, if competent for the assignment, appraisal of non-complex one (1) to four (4) unit residential properties having a Transaction Value of less than $1,000,000 and complex one (1) to four (4) unit residential properties having a Transaction Value of less than $400,000, or as allowed by section 12-10-606(4), C.R.S. For non-federally related transactions, the scope of practice may include vacant or unimproved land that is to be used for development for a one (1) to four (4) unit Residential Property, or vacant or unimproved land for which the highest and best use is a one (1) to four (4) unit Residential Property. In compliance with Rule 1.52, the scope of practice does not include vacant or unimproved land that has the potential for subdivision development for which the subdivision development analysis method of land valuation is necessary and applicable.

1.22. Certified Residential Appraiser: A Person who has been granted a license pursuant to section 12-10-606(1)(b)(II), C.R.S., as a Certified Residential Appraiser by the Board as a result of meeting the real estate appraisal Qualifying Education, experience, and Examination requirements as set forth in Rule 2.3., or as a result of licensure through endorsement from another Jurisdiction as set forth in Chapter 9 of these Rules. The scope of practice for the Certified Residential Appraiser is limited to, if competent for the assignment, appraisal of one (1) to four (4) unit residential properties without regard to Transaction Value or complexity, or as allowed by section 12-10-606(4), C.R.S. Such scope of practice includes vacant or unimproved land that is to be used for development for a one (1) to four (4) unit Residential Property, or vacant or unimproved land for which the highest and best use is a one (1) to four (4) unit Residential Property. In compliance with Rule 1.52., the scope of practice for a Certified Residential Appraiser does not include vacant or unimproved land that has the potential for subdivision development for which the subdivision development analysis method of land valuation is necessary and applicable.

1.23. Certified General Appraiser: A Person who has been granted a license pursuant to section 12-10-606(1)(b)(I), C.R.S. as a Certified General Appraiser by the Board as a result of meeting the real estate appraisal Qualifying Education, experience, and Examination requirements as set forth in Rule 2.4., or as a result of licensure through endorsement from another Jurisdiction as set forth in Chapter 9 of these Rules. The scope of practice for the Certified General Appraiser will be, if competent for the assignment, appraisal of all types of real property.

1.24. Licensed Ad Valorem Appraiser: A Person who has been granted a license pursuant to section 12-10-606(1)(b)(III), C.R.S., as a Licensed Ad Valorem Appraiser by the Board as a result of meeting the real estate appraisal Qualifying Education and Examination requirements as set forth in Rule 2.9. A Licensed Ad Valorem Appraiser cannot conduct appraisal assignments outside the scope of the appraiser's official duties as a County Assessor, an employee of a County Assessor's Office, or as an employee with the Division of Property Taxation within the Department of Local Affairs.

1.25. Appraisal Management Company or AMC: Has the same meaning pursuant to section 12-10-602(2)(a), C.R.S.

1.26. Controlling Appraiser: A Person who holds a certified credential and who is designated by the AMC. The Controlling Appraiser is responsible for the licensed practices of the AMC, all persons employed by the AMC and the requirements set forth in Chapter 17 of these Rules.

1.27. Fee: The prescribed non-refundable license Fee as set by the Division.

1.28. Deemed Complete: An Applicant has submitted a complete and satisfactory application in compliance with sections 12-10-606(1)(a) and 12-10-607(1), C.R.S. that includes the Fee and the accompanying required documentation as set forth in Chapters 2, 3, 4, 5, 6 and 17 of these Rules.

1.29. Active: A current, Valid license that allows a Person to engage in real estate appraisal activities within their licensed level scope of practice.

1.30. Inactive: A Licensee who holds a Valid license shown in the Board's records as being Inactive is not permitted to engage in any activities requiring licensure. To maintain licensure on Inactive status, a Licensee must continue to renew their license and meet the Continuing Education requirements as set forth in Chapter 7 of these Rules as applicable.

1.31. Valid: A license that is approved and shown in the Board's records as either Active or Inactive as well as being eligible for renewable status.

1.32. Temporary Practice Permit: A permit issued pursuant to section 12-10-611(3), C.R.S. as amended and Chapter 10 of these Rules allowing an appraiser licensed or certified in another Jurisdiction to appraise property in Colorado under certain conditions without obtaining Colorado licensure.

1.33. Qualifying Education: Real estate appraisal education courses completed for credit toward the licensing requirements set forth in Chapter 2 of these Rules and meeting the requirements of Chapter 3 of these Rules. Qualifying education courses must be at least fifteen (15) classroom hours in length except for the 8-hour course on Valuation Bias and Fair Housing Laws and Regulations and must include an examination.

1.34. Continuing Education: Real estate and real estate appraisal related courses completed for credit toward meeting the continuing education requirements set forth in Chapter 7 of these Rules.

1.35. Accredited College or University: A higher education institution (i.e., accredited college, junior college, community college or university) accredited by the Commission on Colleges, a regional or national accreditation association, or an accrediting agency that is recognized by the U. S. Secretary of Education.

1.36. College Level Examination Program (CLEP): A group of standardized tests created and administered by the College Board to assess college-level knowledge in certain subject areas and provide a mechanism for earning college credits without taking college courses.

1.37. Distance Education: Any education process based on the geographical separation of student and instructor. Components of distance education include Synchronous, Asynchronous, and Hybrid.

1.38. The Course Approval Program (CAP) of TAF: A voluntary program established by the AQB to provide a minimum level of acceptance for real property appraisal education courses satisfying the Criteria as defined in Rule 1.12.

1.39. Synchronous Distance Education: The instructor and students interact simultaneously online, similar to a phone call, video chat, live webinar, or web-based meeting.

1.40. Asynchronous Distance Education: The instructor and student interaction is non-simultaneous; the students progress at their own pace and follow a structured course content and quiz/exam schedule.

1.41. Hybrid Course Education: Learning environments that allow for both in-person and online (synchronous or asynchronous) interaction.

1.42. Bio-Metric Proctoring: A student's identity is continually verified through processes, such as facial recognition, consistency in keystroke cadence, and the observation of activity in the testing location. Aberrant behavior or activity can be readily observed.

1.43. Practical Applications of Real Estate Appraisal (PAREA): Training programs designed to offer practical experience in a simulated and controlled environment, incorporating the concepts learned in a participant's Qualifying Education. Multiple types of training techniques may be utilized, including, but not limited to computer-based learning; video gaming; video tutorial; virtual assistant; and virtual reality training.

1.44. Evaluation: has the same meaning pursuant to section 12-10-602 (5.5), C.R.S.

1.45. Appraisal (Valuation) Process: The analysis of factors that create value to develop an opinion of value. Steps in the analytical process are: defining the problem; determining an appropriate scope of work; gathering and analyzing general and specific data; applying the appropriate analyses, procedures and methodology; the application of reconciliation criteria to reach a final defined value opinion; and correctly reporting that opinion in compliance with the USPAP.

1.46. Draft Appraisal: A draft appraisal must be identified and labeled as a "draft". The purpose of issuing a draft appraisal cannot be to allow the client and/or the intended user(s) to improperly influence the appraiser.

1.47. Amendment: A written modification of any appraisal, which is dated and signed by the appraiser, and delivered to the client. An amendment is a true and integral component of an appraisal. Amendments may also be referred to as correction pages.

1.48. Review Appraiser: An appraiser, who is actively credentialed in a Jurisdiction that is in compliance with Title XI, FIRREA, as determined by the ASC as defined in Rule 1.3., who performs a review of another appraiser's work subject to the USPAP Standard 3. A review appraiser is not required to obtain a Colorado appraiser's license unless the review appraiser arrives at his or her own opinion of value for real property located in Colorado.

1.49. Contingent Fee: Compensation paid to a Person who is licensed as a licensed or certified appraiser, as a result of reporting a predetermined value or direction of value that favors the cause of the client, the amount of value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the appraiser's opinion and specific to the assignment's purpose. A Person licensed as a licensed or certified appraiser employed by a business entity which is compensated by a contingent fee is considered to be compensated by a contingent fee.

1.50. Signature: As defined in the USPAP, and including all methods of indicating a signature, such as, without limitation, a handwritten mark, digitized image, coded authentication number, stamped impression, embossed or applied seal, or other means.

1.51. Transaction Value: For purposes of these Rules transaction value means:

1.52. Residential Property: Properties comprising one (1) to four (4) residential units; also includes building sites suitable for development to one (1) to four (4) residential units. Residential property does not include land for which a subdivision analysis or appraisal is necessary.

1.53. Non-Residential Property: Properties other than those comprised of one (1) to four (4) residential units and building sites suitable for development to one (1) to four (4) residential units. Non-residential property includes, without limitation, properties comprised of five (5) or more Dwelling units, farm and ranch, retail, manufacturing, warehousing, office properties, large vacant land parcels, and other properties not within the definition of residential property as defined in Rule 1.52.

1.54. Complex Residential Property: Properties comprising one (1) to four (4) residential Dwelling units, or land suitable for development to one (1) to four (4) residential units exhibiting complex appraisal factors such as atypical form of ownership, atypical size, atypical design characteristics, atypical locational characteristics, atypical physical condition characteristics, landmark designation, non- conforming zoning, lack of appraisal data, and other similar factors. Complex residential property does not include land for which a subdivision analysis or appraisal is necessary.

1.55. Good Standing: A Licensee, AMC, or Controlling Appraiser must:

1.56. Panel Size Threshold: Has the same meaning pursuant to section 12-10-604(1)(a)(IV), C.R.S.

1.57. Panel: Has the same meaning pursuant to section 12-10-602(8), C.R.S.

1.58. Federally Regulated AMC: Has the same meaning pursuant to section 12-10-607(9), C.R.S.

1.59. AMC Registry Fee: The annual fee collected from AMC that meet the Panel Size Threshold, including state-licensed AMC and Federally Regulated AMCs, for transmitting to the ASC. The fee is calculated by multiplying the number of licensed or certified appraisers who provided an appraisal in connection with a Covered Transaction on the AMC's Panel in Colorado during the Reporting Period by the registry fee as prescribed by the ASC.

1.60. AMC National Registry: The registry of state-licensed AMCs and Federally Regulated AMCs maintained by the ASC.

1.61. Reporting Period:

1.62. Consumer Credit: Credit offered or extended to a consumer primarily for personal, family, or household purposes.

1.63. Covered Transaction: Any Consumer Credit transaction secured by the consumer's principal Dwelling.

1.64. Creditor: A Person who regularly extends Consumer Credit:

1.65. Dwelling: A residential structure that contains one (1) to four (4) units, whether or not that structure is attached to real property. This includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence.

1.66. Secondary Mortgage Market Participant: A guarantor or insurer of mortgage-backed securities, or an underwriter or issuer of mortgage-backed securities. Secondary mortgage market participant only includes an individual investor in a mortgage-backed security if that investor also serves in the capacity of a guarantor, insurer, underwriter, or issuer for the mortgage-backed security.

1.67. Safe and Secure Manner: Reasonable measures are taken to minimize the risk of loss, damage, or theft.

1.68. Petitioner: For the purposes of implementing the provisions of Chapter 14 of these Rules, any Person who has filed with the Board a petition or has been granted leave to intervene by the Board for a declaratory order pursuant to section 24-4-105(11), C.R.S. and as set forth in Chapter 14 of these Rules.