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S1059.......................................by COMMERCE AND HUMAN RESOURCES
REAL ESTATE APPRAISALS - Amends existing law to provide for the unlawful
practice of real estate appraisal; to add definitions; to add exceptions to
the application of the chapter for a broker's price opinion, a property
owner's personal opinion of value, a lender's opinion of collateral value
or an attorney's or accountant's rendering of professional advice; and to
provide for the suspension or revocation of a real estate broker's or
salesman's license upon entry of a judgment for fraud in any real estate
related transaction.
01/27 Senate intro - 1st rdg - to printing
01/28 Rpt prt - to Com/HuRes
02/10 Rpt out - rec d/p - to 2nd rdg
02/11 2nd rdg - to 3rd rdg
02/15 3rd rdg - PASSED - 25-1-9
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Darrington, Davis, Deide, Dunklin, Frasure, Geddes, Keough,
Lee, McLaughlin, Richardson, Risch, Sandy, Schroeder, Sorensen,
Stegner, Thorne, Twiggs, Wheeler
NAYS--Whitworth
Absent and excused--Danielson, Hawkins, Ingram, Ipsen, King, Noh,
Parry, Riggs, Stennett
Floor Sponsor - Andreason
Title apvd - to House
02/16 House intro - 1st rdg - to Comm/Hu Res
02/26 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/02 3rd rdg - PASSED - 63-0-7
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Black, Bruneel,
Campbell, Chase, Clark, Crow, Cuddy, Deal, Denney, Ellsworth,
Field(13), Field(20), Gagner, Geddes, Gould, Hadley, Hammond,
Hansen(23), Hansen(29), Henbest, Hornbeck, Jaquet, Jones, Judd,
Kempton, Kendell, Kunz, Lake, Limbaugh, Linford, McKague, Meyer,
Montgomery, Mortensen, Moyle, Pischner, Pomeroy, Reynolds, Ridinger,
Ringo, Robison, Sali, Schaefer, Sellman, Smith, Smylie, Stevenson,
Stoicheff, Stone, Taylor, Tilman, Tippets, Trail, Watson, Wheeler,
Williams, Wood, Zimmermann
NAYS -- None
Absent and excused -- Boe, Callister, Kellogg, Loertscher, Mader,
Marley, Mr Speaker
Floor Sponsor - Hadley
Title apvd - to Senate
03/03 To enrol
03/04 Rpt enrol - Pres signed - Sp signed
03/05 To Governor
03/11 Governor signed
Session Law Chapter 54
Effective: 07/01/99
S1059|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE SENATE SENATE BILL NO. 1059 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO REAL ESTATE APPRAISERS; AMENDING SECTION 54-4103, IDAHO CODE, TO 3 PROVIDE FOR THE UNLAWFUL PRACTICE OF APPRAISAL; AMENDING SECTION 54-4104, 4 IDAHO CODE, TO ADD DEFINITIONS; AMENDING SECTION 54-4105, IDAHO CODE, TO 5 ADD EXCEPTIONS TO THE APPLICATION OF THE CHAPTER FOR A BROKER'S PRICE 6 OPINION, A PROPERTY OWNER'S PERSONAL OPINION OF VALUE, A LENDER'S OPINION 7 OF COLLATERAL VALUE OR AN ATTORNEY'S OR ACCOUNTANT'S RENDERING OF PROFES- 8 SIONAL ADVICE; AND AMENDING SECTION 54-2040, IDAHO CODE, TO PROVIDE FOR 9 SUSPENSION OR REVOCATION OF A REAL ESTATE BROKER'S OR SALESMAN'S LICENSE 10 UPON ENTRY OF A JUDGMENT FOR FRAUD IN ANY REAL ESTATE RELATED TRANSACTION 11 AND TO MAKE A TECHNICAL CORRECTION. 12 Be It Enacted by the Legislature of the State of Idaho: 13 SECTION 1. That Section 54-4103, Idaho Code, be, and the same is hereby 14 amended to read as follows: 15 54-4103. USE OF TERM "LICENSED" OR "CERTIFIED" APPRAISER -- UNLAW- 16 FUL PRACTICE OF APPRAISAL .From and after July 1, 1992, i17I t shall be unlawful for any person in this state to assume 18 or use the title "state licensed" or "state certified real estate appraiser" 19 or any title, designation or abbreviation likely to create the impression of 20 licensure or certification by the state of Idaho for any real estate 21 appraisal, unless the person has first been licensed or certified by the real 22 estate appraiser board under the provisions of this chapter. The board may 23 adopt for the exclusive use of persons licensed or certified under the provi- 24 sions of this chapter, a seal, symbol or other mark identifying the user as a 25 state licensed or certified real estate appraiser. 26From and after July 1, 1992, iI t shall be unlaw- 27 ful for anyreal estate appraiserperson to appraise, prac- 28 tice appraisal, assume to act as, or hold themselves out to the public as an 29 appraiser, or carry on the calling of an appraiser within the state, or 30 to perform an appraisal of real estate located in this state unless the person 31 has first been licensed or certified by the board under the provisions of this 32 chapter. 33 SECTION 2. That Section 54-4104, Idaho Code, be, and the same is hereby 34 amended to read as follows: 35 54-4104. DEFINITIONS. As used in this chapter: 36 (1) "Appraisal" or "real estate appraisal" means an analysis, opinion or 37 conclusion relating to the value, nature, quality, or utility of specified 38 interests in, or aspects of, identified real estate. 39 (2) "Appraisal assignment" means an engagement for which an appraiser is 40 employed or retained to act, or would be perceived by third parties or the 41 public as acting, as a disinterested third party in rendering an unbiased 2 1 opinion or conclusion relating to the value, nature, quality or utility of 2 specified interests in, or aspects of, identified real estate. 3 (3) "Appraisal foundation" or "foundation" means the appraisal foundation 4 established on November 20, 1987, as a not-for-profit corporation under the 5 laws of Illinois. 6 (4) "Board" means the real estate appraiser board. 7 (5) "Broker's price opinion" means a written price opinion of the 8 estimated price for identified real property that is prepared by a real estate 9 broker or associate broker licensed under chapter 20, title 54, Idaho Code, 10 pursuant to the requirements and content provisions for the broker's price 11 opinions contained in this chapter. 12 (6) "Federally related transaction" means any real estate related finan- 13 cial transaction that a federally regulated institution, regulatory agency, or 14 the resolution trust corporation engages in, funds, contracts for, or regu- 15 lates. 16 (57 ) "License" or "certificate" means that doc- 17 ument issued by the real estate appraiser board certifying that the person 18 named thereon has satisfied the requirements for licensure or certification as 19 a state licensed or certified real estate appraiser and bearing a license or 20 certificate number assigned by the board. 21 (68 ) "Noncomplex appraisal" is one in which the 22 subject property has an active market of essentially identical properties, 23 there is adequate market data available, adjustments do not exceed the typical 24 range found in the market for essentially identical properties, and in the 25 instance of residential property, the contract sales price would fall within 26 the market norm for homes or lots within the same area. 27 (79 ) "Real estate appraiser" or "appraiser" 28 means a person who for a fee or other valuable consideration or the expecta- 29 tion thereof, develops and communicates real estate appraisals or otherwise 30 gives an opinion of the value of real estate or any interest therein. 31 (10) "Real estate related financial transaction" means any transac- 32 tion involving: 33 (a) The sale, lease, purchase, investment in or exchange of real prop- 34 erty, including interest in property or the financing thereof; 35 (b) The financing or refinancing of real property, or any interest in 36 real property; 37 (c) The use of real property or an interest in real property as security 38 for a loan or investment, including a mortgage backed security. 39 (811 ) "Real property" or "real estate" means and 40 includes leaseholds as well as any other interest or estate in land, whether 41 corporeal, incorporeal, freehold or nonfreehold and whether situated in this 42 state or elsewhere. 43 (912 ) "State certified general real estate 44 appraiser" means a person who is certified to appraise all types of real prop- 45 erty. 46 (103 ) "State certified residential real estate 47 appraiser" means a person who holds a current, valid certificate as a state 48 certified residential appraiser issued under the provisions of this chapter 49 whose practice is limited to appraisal of residential properties of four (4) 50 or less units without regard to transaction value or complexity. 51 (114 ) "State licensed residential real estate 52 appraiser" means a person who is licensed to appraise residential real prop- 53 erty consisting of one (1) to four (4) noncomplex residential units having a 54 transaction value less than one million dollars ($1,000,000) and complex one 55 (1) to four (4) residential units having a transaction value less than two 3 1 hundred fifty thousand dollars ($250,000). 2 SECTION 3. That Section 54-4105, Idaho Code, be, and the same is hereby 3 amended to read as follows: 4 54-4105. EXCEPTIONS. (1)The provisions of this chapter do not5apply to any person who does not hold himself out as, or offer to perform ser-6vices as, a real estate appraiser.7(2)The provisions of this chapter do not restrict the right to 8 use the term "appraiser," provided that such term is not used in a manner that 9 creates the impression of certification by the state of Idaho to perform real 10 estate appraisals other than ad valorem tax appraisals. However, nothing in 11 this chapter shall entitle a state licensed or state certified real estate 12 appraiser to appraise real estate for ad valorem tax purposes unless he has 13 first been certified by the Idaho state tax commission pursuant to section 14 63-105A(17), Idaho Code. 15 (32 ) The provisions of this chapter shall not 16 apply to a licensed real estate broker, associate broker or salesperson who, 17 in the ordinary course of his business gives an opinion of the price of real 18 estate for the purpose of a prospective listing or sale, provided that such 19 person does not represent himself as being a state licensed or certified real 20 estate appraiser. 21 (3) The provisions of this chapter shall not prohibit a real estate 22 broker or associate broker licensed under chapter 20, title 54, Idaho Code, 23 whose license is active and in good standing, from rendering a broker's price 24 opinion, for which the broker may charge a fee, provided the broker's price 25 opinion complies with the following requirements: 26 (a) The broker's price opinion shall be in writing and contain the fol- 27 lowing: 28 (i) A statement of the intended purpose of the price opinion; 29 (ii) A brief description of the subject property and property 30 interest to be priced; 31 (iii) The basis of reasoning used to reach the conclusion of the 32 price, including the applicable market data and/or capitalization 33 computation; 34 (iv) Any assumptions or limiting conditions; 35 (v) A disclosure of any existing or contemplated interest of the 36 broker(s) issuing the opinion; 37 (vi) The name and signature of the broker(s) issuing the price 38 opinion and the date of its issuance; 39 (vii) A disclaimer that, unless the broker is licensed under the 40 Idaho real estate appraisers act, chapter 41, title 54, Idaho Code, 41 the report is not intended to meet the uniform standards of profes- 42 sional appraisal practice. 43 (viii) A disclaimer that the broker's price opinion is not intended 44 to be an appraisal of the market value of the property, and that if 45 an appraisal is desired, the services of a licensed or certified 46 appraiser should be obtained. 47 The broker's price opinion permitted under this chapter may not be used as 48 an appraisal, or in lieu of an appraisal, in a federally related transac- 49 tion. 50 (4) Any person who is not licensed or certified under the provisions of 51 this chapter may assist a state licensed or certified real estate appraiser in 52 the performance of an appraisal, provided that he is actively and personally 53 supervised by the state licensed or certified appraiser and provided further 4 1 that any appraisal report rendered in connection with the appraisal is 2 reviewed and signed by the state licensed or certified real estate appraiser. 3 (5) The provisions of this chapter requiring mandatory licensure or cer- 4 tification shall not apply to employees or agents of the Idaho transportation 5 department when appraising transportation department property with a fair mar- 6 ket value of ten thousand dollars ($10,000) or less. 7 (6) This chapter shall not prohibit a property owner from express- 8 ing his personal opinion of the value of his own property, nor shall the pro- 9 visions of this chapter prohibit a lender, or employee of a lending institu- 10 tion, from forming and expressing an opinion of collateral value in the ordi- 11 nary course of business including, but not limited to, mortgaging property, 12 underwriting a loan, or foreclosing a loan, so long as such opinion of collat- 13 eral value is not represented as being an appraisal of the market value of the 14 property, or prepared under the provisions of this chapter. 15 (7) This chapter shall not prohibit an attorney or accountant from ren- 16 dering professional advice within the ordinary course of his profession, so 17 long as such advice is not represented to be an appraisal of the market value 18 of the property. 19 SECTION 4. That Section 54-2040, Idaho Code, be, and the same is hereby 20 amended to read as follows: 21 54-2040. REVOCATION OR SUSPENSION OF LICENSE -- GROUNDS THEREFOR. A. The 22 commission may upon its own motion, and shall upon verified complaint in writ- 23 ing of any person claiming to have been injured or defrauded, investigate the 24 action of any person engaged in the business or acting in the capacity of real 25 estate broker or real estate salesman within this state and shall have the 26 power to temporarily suspend or permanently revoke licenses issued under the 27 provisions of this act and/or to impose a civil penalty in an amount not to 28 exceed five thousand dollars ($5,000) and to assess costs and attorney 's 29 fees against the person for the cost of any investigation and/or admin- 30 istrative or other proceedings upon the licensee at any time where the holder 31 thereof in performing or attempting to perform any of the acts mentioned in 32 section 54-2022, Idaho Code, regardless of whether the acts were for his own 33 account or in his capacity as a broker or salesman, is guilty of (a) making 34 any fraudulent misrepresentations; or, (b) a continued or flagrant course of 35 misrepresentation or making of false promises whether through agents or sales- 36 men; or, (c) failure to account for or remit any property or moneys coming 37 into his possession which belong to another; or, (d) failure to keep adequate 38 records of all property transactions in which he acts in the capacity of real 39 estate broker or real estate salesman; or, (e) failing or refusing upon demand 40 to disclose any information within his knowledge, or to produce any documents, 41 books, or records in his possession for inspection by the commission or its 42 authorized representatives when acting within the jurisdiction or by authority 43 of law; or, (f) employment of fraud, deception, misrepresentation, misstate- 44 ment or any unlawful means in applying for or securing a license to act as 45 real estate broker or salesman in the state of Idaho; or, (g) acting as a real 46 estate broker or salesman under an assumed name; or, (h) violation of any 47 provision of sections 54-2021 through 54-2053, Idaho Code, or any of the rules 48 made or promulgated by the real estate commission, or final order of the com- 49 mission; or, (i) any other conduct whether of the same or a different charac- 50 ter than hereinabove specified which constitutes dishonest or dishonorable 51 dealings; or, (j) the use by a licensee of any provision allowing the licensee 52 an option to purchase in any agreement authorizing or employing such licensee 53 to sell, buy, list or exchange real estate for compensation or commission, 5 1 except when such licensee, prior to or coincident with entering into such 2 agreement, discloses in writing to his principal the purpose for which the 3 property will be purchased, that the licensee is licensed, and such other 4 information as the commission may require by rule; or, (k) gross negligence or 5 reckless conduct in a regulated real estate transaction. Conduct is grossly 6 negligent or reckless when, taken as a whole, the conduct substantially fails 7 to meet the generally accepted standard of care in the practice of real estate 8 in Idaho. 9 B. The commission may also temporarily suspend or permanently revoke a 10 license where the holder thereof (a) is convicted of any felony in a state or 11 federal court, or is convicted of a misdemeanor involving moral turpitude. The 12 record of conviction, or a certified copy thereof, certified by the clerk of 13 the court, or the judge in whose court the judgment was had, shall be prima 14 facie evidence of conviction in such cases; (b) is declared insane by a court 15 of competent jurisdiction; provided, however, that when a license shall have 16 been revoked or suspended for this cause, such license may be reactivated by 17 the commission upon a declaration of sanity being made; (c) has a judgment 18 entered against him in a civil action upon grounds of fraud, misrepresenta- 19 tion, or deceit with reference to any real estate related 20 transaction .for which a license is required.21 C. The commission may also temporarily suspend or permanently revoke a 22 license of a broker or salesman where the license of such licensee, issued by 23 another jurisdiction, is suspended or revoked for acts or omissions which 24 would be grounds for suspension or revocation under chapter 20, title 54, 25 Idaho Code. A certified copy of the findings of fact, conclusions of law, mem- 26 orandum opinion and/or final order from the appropriate administrative agency 27 or court shall be prima facie evidence of the suspension or revocation and the 28 facts stated therein. 29 D. If the commission temporarily suspends or permanently revokes a 30 license, and/or imposes a civil penalty, the commission may withhold execution 31 of said suspension, revocation and/or civil penalty on such terms and for such 32 time as it may prescribe. 33 E. In the event of the revocation or suspension of the broker's license 34 issued to the designated broker of a partnership, limited liability company or 35 corporation, the license issued to such partnership, limited liability company 36 or corporation shall be revoked or suspended by the commission. However, the 37 commission may withhold execution of the revocation or suspension on such 38 terms and for such time as it may prescribe. 39 F. All civil penalties collected by the commission under the provisions 40 of this chapter shall be deposited in the state treasury to the credit of the 41 special real estate account established pursuant to section 54-2037, Idaho 42 Code. 43 G. The commission may accept, on such conditions as it may prescribe, or 44 reject any offer to voluntarily terminate the license of a person whose activ- 45 ity is under investigation or against whom a formal complaint has been filed.
STATEMENT OF PURPOSE
RS 08618C1
AMENDMENTS TO THB IDAHO REAL ESTATE APPRAISERS ACT
The purpose of the legislation is to clarify the practice of appraisal and define real estate
broker's price opinions. The legislation defines a real estate related financial transaction as
it relates to the appraisal act.
The legislation also clarifies exemptions to the law that allow property owners, lending
institutions, attorneys and accountants to express opinions and provide advice.
The legislation also provides a procedure for the Idaho Real Estate Commission to
implement diciplinary action against a real estate licensee when they are found to be at
fault in a civil action regarding fraud, misrepresentation or deceit.
FISCAL NOTE
There is no fiscal impact to the state of local government budgets.
CONTACT: Ed Morse, Idaho Real Estate Appraisers Board 667-5583
Mark Dunham, Idaho Association of Realtors 342-3585
Alex LaBeau, Idaho Association of Realtors 342-3585
STATEMENT OF PURPOSE/ FISCAL NOTE S1059