Current through Register Vol. 51, No. 3, September 1, 2024
RELATES TO:
KRS
324A.035,
324A.050(1)(j),
12
C.F.R. 225.62-225.67,
12
U.S.C. 3331,
3336,
3339
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
324A.020 and
324A.035
require the Real Estate Appraisers Board, with the approval of the executive
director of the Kentucky Real Estate Authority, to promulgate administrative
regulations necessary to carry out the provisions of
KRS
324A.010 to
324A.090.
KRS
324A.035(3)(d) requires the
board to establish by administrative regulation standards of professional
appraisal practice.
12
U.S.C. 3331,
3336,
and
3339
and
12 C.F.R.
225.64 and
225.65
require that real estate appraisals in connection with federally related
transactions be performed in accordance with appraisal standards promulgated by
the Appraisal Standards Board of the Appraisal Foundation. This administrative
regulation establishes the scope of practice and professional standards of
conduct, and includes the supervision requirements for associate
appraisers.
Section 1. USPAP
Compliance.
(1) Certificate holders and
licensees listed in paragraphs (a) through (e) of this subsection shall comply
with the Uniform Standards of Professional Appraisal Practice:
(a) A certified general real property
appraiser;
(b) A certified
residential real property appraiser;
(c) A licensed residential real property
appraiser;
(d) An associate real
property appraiser; and
(e) A
licensed nonfederal real property appraiser.
(2) The board shall evaluate an appraisal
report in accordance with the USPAP in effect when the certificate holder or
licensee signed the certification of the report, or when the report was
prepared if the report was unsigned.
Section 2. Calculation of Square Footage. The
standard for the calculation and reporting of above-grade square footage and
below-grade square footage in single-family houses shall be the American
National Standard for Single-Family Residential Buildings; Square
Footage-Method for Calculating, ANSI Z765 2013.
Section 3. Appraisal Reporting Requirements.
For each appraisal assignment that includes an appraisal management company
reference as the client or agent for the client, an appraiser shall identify
within the appraisal report:
(1) The name that
is on file with the board for the appraisal management company;
(2) The Kentucky registration number that is
on file with the board for the appraisal management company; and
(3) The fee that will be paid to the
appraiser for each appraisal assignment ordered by an appraisal management
company, unless the appraiser is a W-2 employee of the appraisal management
company.
Section 4.
Licensed Nonfederal Real Property Appraiser Advertising.
(1) In a written or broadcast communication,
a licensed nonfederal real property appraiser shall include the following
statement: "Not licensed or certified to perform appraisals for any
transactions requiring a licensed or certified appraiser pursuant to federal
law or regulations."
(2) A written
or broadcast communication shall include:
(a)
Appraisal reports;
(b)
Advertisements; and
(c) Business
cards and stationery.
(3) In a print advertisement, the statement
shall be in letters at least fifty (50) percent the size of the largest letter
in the advertisement.
(4) In a
radio or television advertisement, the statement shall be stated clearly and
understandably.
Section
5. Supervision of Associate Appraisers.
(1) Each associate appraiser shall maintain
an appraisal log for each supervising appraiser. The associate appraiser shall
record the following information in the log for each appraisal:
(a) Type of property;
(b) Client name and address;
(c) Address of appraised property;
(d) Description of work performed by the
associate;
(e) Scope of the
review;
(f) Scope of the
supervision by the supervising appraiser;
(g) Number of actual hours worked by the
associate on the assignment; and
(h)
Signature and state certification number of the supervising
appraiser.
(2) The
associate shall be entitled to obtain copies of the appraisal reports he or she
prepared. The supervising appraiser shall keep copies of appraisal reports for
a period of at least five (5) years or at least two (2) years after final
disposition of any judicial proceeding in which testimony was given, whichever
period expires last.
(3) The
supervising appraiser shall:
(a) Have been a
state certified real property appraiser for a period of at least three (3)
years;
(b) Be certified by the
board prior to applying to become a supervising appraiser;
(c) Be in good standing and shall not have
received a suspension, a revocation, or other sanction that limited or
prohibited that licensee's practice of real property appraising within the
three (3) year period immediately prior to applying to become a supervising
appraiser; and
(d) Be responsible
for the training and supervision of the associate.
(4) Only a certified general real property
appraiser who satisfies the requirements of a supervising appraiser in
subsection (3) of this section may supervise a person acquiring experience
toward a Certified General Real Property Appraiser certificate.
(5) Any certified general real property
appraiser or a certified residential real property appraiser who satisfies the
requirements of a supervising appraiser in subsection (3) of this section may
supervise a person acquiring experience toward a Certified Residential Real
Property Appraiser certificate.
(6)
The supervising appraiser shall:
(a) Accept
responsibility for an associate's appraisal report by signing and certifying
that the report is in compliance with the Uniform Standards of Professional
Appraisal Practice;
(b) Review
reports by the associate;
(c)
Accompany the associate on all inspections and personally inspect each
appraised property and the comparable sales with the associate on the
associate's real property appraisal assignments, until the associate:
1. Is competent to conduct inspections
independently;
2. Has met all
specific requirements pertaining to property inspection established by KRS
Chapter 324A and 201 KAR Chapter 30; and
3. The supervising appraiser ensures the
associate is acting in accordance with the competency provision of the Uniform
Standards of Professional Appraisal Practice for the property type;
(d) Be limited to a maximum of
three (3) real property associates at a time;
(e) Notify the board immediately if the
supervision of a real property associate has terminated; and
(f) Not be employed by an associate or by a
company, firm, or partnership in which the associate has a controlling
interest.
(7) A person
otherwise qualified to be a supervising appraiser who has been disciplined by
the board under
KRS
324A.050 shall be subject to one (1) or more
of the following, according to the severity of the prior violation:
(a) Prohibited from supervising
associates;
(b) Limited in the
number of associates to supervise; or
(c) Be required to take additional courses
approved by the board before being permitted to supervise an
associate.
(8) If
necessary to determine the competency of the associate, the board shall request
additional reports from the associate.
(9)
(a) A
first time supervisor and a new associate shall attend a Kentucky-specific
seven (7) hour board-approved course in supervision practices prior to
beginning supervision or training.
(b) To remain eligible to provide
supervision, a supervisor shall attend the board-approved course in supervision
practices every three (3) years.
(c) To continue logging creditable
experience, an associate shall attend the board-approved course in supervision
practices every three (3) years.
Section 6. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "Uniform Standards of
Professional Appraisal Practice", 2020-2021 edition; and
(b) "American National Standard for Single
Family Residential Buildings; Square Footage Method for Calculating, ANSI Z765
2013", 2013.
(2) This
material may be inspected, copied, or obtained, subject to applicable copyright
law, at the Kentucky Real Estate Appraisers Board, 321 N. Madison Avenue,
Richmond, Kentucky 40475, (859) 623-1658, Monday through Friday, 8 a.m. to 4:30
p.m.
(3) This material may also be
obtained from the Appraisal Standards Board of the Appraisal Foundation, 1155
15th Street, N.W., Suite 1111, Washington, D.C. 20005, (202)
347-7722.
STATUTORY AUTHORITY:
KRS
324A.035(3)(d)
