4 CCR 725-2, ch. 1 - [Effective 1/1/2024] 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:
A. For
appraisal assignments carried out as part of a loan transaction, the amount of
the loan; or
B. For appraisal
assignments carried out for other than a loan transaction, the market value of
the real property interest.
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:
A. Not have been
subject to a stipulation and a final agency order or final agency order, the
terms of which were completed not less than three (3) years prior, or had a
license revoked or permanently surrendered for any of the violations pursuant
to sections
12-10-613,
12-10-614,
12-10-616 or
12-10-617, C.R.S. A license will
be considered to be in good standing three years following the completion of
all terms of an executed stipulation or final agency order.
B. Not have been subject to a stipulation for
diversion, the terms of which have not been fully completed. A Licensee will be
considered to be in good standing once all terms of the stipulation of
diversion have been successfully completed.
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:
A. For State-licensed AMCs:
1. Applying for Initial Licensure, the
previous twelve (12) month period or the period the AMC has been in business,
whichever period is less.
2.
Applying for renewal, the twelve (12) month period beginning November 1 of the
prior year through October 31 of the year of renewal.
3. Applying for reinstatement of an expired
license, the twelve (12) month period beginning November 1 of the year prior to
expiration through October 31 of the year of expiration.
B. For Federally Regulated AMCs reporting to
the state, the twelve (12) month period beginning November 1 of the prior year
through October 31 of the current year.
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:
A. That is subject to a finance charge or is
payable by written agreement in more than four installments (not including a
down payment), and to whom the obligation is initially payable, either on the
face of the note or contract, or by agreement when there is no note or
contract; or
B. If the Person
extended the credit (other than credit subject to the requirements of high cost
mortgages) more than five (5) times for transactions secured by a Dwelling in
the preceding calendar year. If a Person did not meet these numerical standards
in the preceding calendar year, the numerical standards will be applied to the
current calendar year. A Person regularly extends Consumer Credit if, in any
12-month period, the Person originates more than one (1) credit extension that
is subject to the requirements of high cost mortgages or one (1) or more such
credit extensions through a mortgage broker.
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.
Notes
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