HOUSE BILL NO. 695
AS AMENDED BY HOUSE AMENDMENT NO. 2
AN ACT TO AMEND TITLE 24, CHAPTER 29 OF THE DELAWARE CODE RELATING TO THE LICENSURE AND REGULATION OF REAL ESTATE APPRAISERS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (three-fifths of all members elected to each House thereof concurring therein):
Section 1. Amend Title 24, Chapter 29 of the Delaware Code by renumbering subchapter 2 thereof to subchapter 3, redesignating sections 2940 through 2950 as sections 2950 through 2960 and inserting therein a new subchapter 2 to read as follows:
"Subchapter II. Regulation of real estate appraisers.
§2930. Certificate Requirement.
(a) No person, partnership, association or corporation shall act as real estate
(b) appraiser, or advertise or assume to act as such without being registered with and duly licensed or certified by the Council on Real Estate Appraisers.
(c) Corporations, partnerships and associations shall not be licensed under this subchapter, but nothing in this subchapter shall prevent a corporation, partnership or association from acting as an appraiser provided that every member or officer of such partnership, association or corporation who actively participates in the appraisal business of such entity is a licensed or certified real estate appraiser and unless every employee who acts as an appraiser for such partnership, association or corporation is a licensed or a certified appraiser.
(d) A person who Is not a state certified or licensed real estate appraiser under this subchapter may assist a state certified or licensed real estate appraiser in the preparation of an appraisal provided that he or she is actively and personally supervised by a state certified or licensed real estate appraiser and provided that any appraisal report is reviewed and signed by the state certified or licensed appraiser.
§2931. Council on Real Estate Appraisers.
(a) The Council on Real Estate Appraisers is hereby established with a primary objective, to which all other objectives and purposes are secondary, of protecting the general public (specifically those persons who are direct recipients of services regulated by this Chapter) from occupational practices which tend to reduce competition or fix the price of services rendered and meet standards as set by a Federal Financial Regulatory Agency. The secondary objectives of the Council are to maintain minimum standards of practitioner competency, and to maintain certain standards in the delivery of services to the public. In meeting its objectives, the Council shall develop standards assuring professional competence; shall monitor complaints brought against practitioners regulated by the Council; shall adjudicate at formal complaints hearings; shall promulgate rules and regulations; and shall impose sanctions where necessary against practitioners. Although independent of the Real Estate Commission, the Council shall be supported administratively by the Commission's staff. The Council shall meet at least four times each year.
(b) The Council on Real Estate Appraisers shall be composed of 9 members. The Governor shall appoint members of the Council. The terms of the newly appointed members shall be staggered. The first three appointees shall serve for a term of one year, the next three appointees shall serve for a term of two years then the next three appointees shall serve for a term of three years. Thereafter, all new appointees shall serve for a term of three years. A member shall serve for a term of 3 years, and may succeed himself or herself for 1 additional term; provided however, that where a member was initially appointed to fill a vacancy, such member may succeed himself or herself for only 1 additional full term. Any person appointed to fill a vacancy on the Council shall hold office for the remainder of the unexpired term of the former member. Each term of office shall expire on the date specified in the appointment, and the member shall no longer be eligible to participate in Council proceedings unless lawfully appointed. A person who has never served on the Council may be appointed to the Council two consecutive times, but no such person shall thereafter be eligible for two consecutive appointments. No person who has been twice appointed to the Council, or who has served on the Council for six years within any nine-year period, shall again be appointed to the Council until an interim period of at least one term has expired since such person last served. A member of the Council shall be suspended or removed by the Governor for misfeasance, nonfeasance or malfeasance. A member subject to disciplinary proceedings shall be disqualified from Council business until the charge is adjudicated or the matter is otherwise concluded. A member may appeal any suspension or removal to the Superior Court. No member of the Council of Real Estate Appraisers, while serving on the Council, shall be a president, chairperson or other official of a professional association of real estate appraisers.
(c) A balanced membership shall be maintained on the Council by the appointment of three members engaged primarily in the real estate appraisal business who are certified appraisers, two members engaged in the real estate brokerage business who are also licensed real estate appraisers, one member from the banking community and three members from the public at large. To serve on the Council, a public member shall not be nor ever have been a real estate appraiser, nor a member of the immediate family of a real estate appraiser; shall not have been employed by a real estate appraiser; shall not have had a material financial interest in the providing of goods and services to real estate appraisers nor have been engaged in an activity directly related to real estate appraisal. Such public member shall be accessible to inquiries, comments and suggestions from the general public. Members of the Council shall receive $50 per meeting as compensation for each meeting attended up to 10 meetings per calendar year; provided, however, no member shall receive compensation for the year in excess of $500. Council members may be reimbursed for reasonable and necessary expenses incident to their duties as members of the Council. A chairman of the Council shall be chosen by the members, shall serve in that capacity for a term of one year and shall be eligible for re-election. Any appointment, pursuant to this section, to replace a member whose position becomes vacant prior to the expiration of his term, shall be only for the remainder of that term.
Notwithstanding the foregoing, the members of the first Council who are real estate appraisers need not be licensed or certified as appraisers for their initial term.
(d) A majority of members shall constitute a quorum; and no action shall be taken without the affirmative vote of at least 5 members. Any member who fails to attend 3 consecutive meetings, or who fails to attend at least half of all regular business meetings during any calendar year, shall automatically upon such occurrence be deemed to have resigned from office and a replacement shall be appointed.
(e) Minutes of all meetings shall be recorded, and copies shall be maintained by the Division of Professional Regulation. A stenographic record of any disciplinary hearing shall be made by a qualified court reporter. At the request and expense of any party such record shall be transcribed and made available to the requesting party.
§2932. Powers of the Council on Real Estate Appraisers.
(a) The Council on Real Estate Appraisers is hereby empowered and is required to promulgate necessary rules and regulations which comply in all respects with, and are not more stringent than the requirements of Title 12, United States Code, Chapter 34A and any subsequent amendments thereto. Regulations must be promulgated within 90 days following completion of the adoption of regulations by the Federal Financial Institutions Regulatory Agencies and the Resolution Trust Corporation; provided, however, that regulations must be promulgated to take effect not later than July 1, 1991 unless an extension is granted by the Appraisal Subcommittee of the Federal Financial Institutions Examination Council, or any other dates specified by a subsequent act of the Federal Congress. Such regulations are subject to administrative review under the Administrative Procedures Act and to judicial review by application to the Superior Court.
In addition, the Council may:
(1) Adopt and revise such rules and regulations consistent with the law and this subchapter as may be necessary and convenient to enable it to carry into effect this subchapter.
(2) Examine, license, certify and renew the licenses and certifications of duly qualified applicants, including applicants for conducting real estate appraisal schools;
(3) Conduct hearings upon charges calling for discipline of a licensed or certified real estate appraiser, or the revocation of such license or certification;
(4) Issue subpoenas and compel the attendance of witnesses, and administer oaths to persons giving testimony at hearings;
(5) Keep records of all its proceedings;
(6) Make an annual report to the Governor and the General Assembly.
(b) The Council on Real Estate Appraisers is required to include in its regulations educational, experience and testing requirements for licensure and certification of real estate appraisers that ensure protection of the public interest. Educational experience and testing requirements for certified and licensed appraisers must specifically meet the criteria established by the Appraiser Qualification Board of the Appraisal Foundation, if any, or such additional standards as may be specified by a Federal Financial Regulatory Agency or by 12 United States Code, Chapter 34A.
§2933. Roster of Appraisers; Annual Fees.
(a) The Council on Real Estate Appraisers is required each year to publish a roster of all licensed and certified appraisers and to transmit the roster annually to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.
(b) The Council on Real Estate Appraisers is also required to charge and collect fees for applications, registrations, examinations, original licensure and/or certification and annual renewals thereof, as well as for each additional officer, change of place of business or employer, and for duplicate documents. The amount to be charged for each fee imposed under this subchapter shall approximate and reasonably reflect all costs necessary to defray the expenses of the Council, as well as the proportional expenses incurred by the Division of Professional Regulation in Its services on behalf of the Council. There shall be a separate fee charged for each service or activity. At the beginning of each calendar year the Division of Professional Regulation, or any other state agency acting on its behalf, shall compute for each separate activity or service, the appropriate fee for the coming year. In addition, the Council shall collect an annual registry fee of not more than $25 to be transmitted by the Council to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.
(c) In those instances where the uniform national examination is to be taken in Delaware, applicants shall nevertheless pay all fees charged by the testing service directly to the testing service. Where the testing service refuses to accept direct payment, the applicant may pay the Council. In the event there are extra local expenses incurred by the State for its services in administering the examination, the applicant shall pay an additional fee to the Council to defray those local expenses.
§2934. Real Estate Appraiser Qualifications Criteria: General Certification Classification.
(a) The General Certification Classification of real estate appraisers shall apply to appraisals of all types of real property. Applicants for initial certification must meet the requirements, and renewal applicants the continuing education requirements as required by rifle 12, United States Code, Chapter 34A and any subsequent amendments thereto and any regulations adopted thereunder.
(b) An applicant for certification under this subchapter shall not have been convicted of a felony, nor have been professionally penalized for drug abuse nor have been professionally penalized or convicted for fraud within the past 5 years.
(c) Each applicant shall provide such information as may be required on an application form designed and furnished by the Council. No application form shall require a picture of the applicant; require information relating to citizenship, place of birth, length of state residency; nor require personal references.
(d) Where the Council has found to its satisfaction that an application has been intentionally fraudulent, or that false information has been intentionally supplied, it shall report its finding to the Attorney General for further action.
(e) Where the application of a person has been refused or rejected and such applicant feels that the Board has acted without justification; has imposed higher or different standards for him or her than for other applicants or licensees; or has in some other manner contributed to or caused the failure of such application, the applicant may appeal to the Superior Court.
§2935. Appraiser Qualifications Criteria: Residential Certification Classification.
(a) The Residential Certification Classification of real estate appraisers would apply to the appraisals of one to four units and up to twelve units when a net income capitalization analysis is not required. Applicants for initial certification must meet the requirements, and renewal applicants the continuing education requirements as required by Title 12, United States Code, Chapter 34A and any subsequent amendments thereto and any regulations adopted thereunder.
§2936. Requirements for Licensing Appraiser Trainees, Real Estate Appraisers and Real Property Appraisers.
(a) Applicants for appraiser trainee licenses, residential real estate appraisers licenses and real property appraisers licenses must meet the minimum qualifications as established by the Uniform Standards of Professional Appraisal Practice as issued by the Appraisal foundation or its successor. In the absence of such standards the following shall be required by the Council.
(1) Any applicant for a real estate appraiser trainee license shall have successfully completed a minimum of 40 classroom hours of education on real estate matters satisfactory to the Council, including classroom hours on the topic of the Code of Professional Ethics and Uniform Standards of Professional Appraiser Practice.
(2) An applicant for a license as residential real estate appraiser, in addition to the education requirements of a trainee license shall have successfully completed an additional 20 classroom hours. The applicant must have had at least two years of continuous experience under the supervision of a Delaware certified or licensed residential or general real estate appraiser as an appraiser trainee. The applicant must submit to the Council a list of at least 30 appraisals of residential real estate of one to four family units or up to twelve units when a net income capitalization analysis is not required, which appraisals were completed by the applicant during his or her two years of experience with verification by the supervising appraiser that the work was substantially completed by the applicant. The applicant must complete and pass an examination approved by the Council. An applicant for license must not have been subjected to any disciplinary action by another licensing authority during the period of licensure in that jurisdiction. A statement to this effect must be provided by the licensing authority in each and every state in which the applicant has ever held a license to practice real estate appraisal.
(3) An applicant for licensure as a licensed general real estate appraiser, in addition to the educational requirements for licensure as a licensed real estate appraiser trainee, must have successfully completed an additional 45 classroom hours of Council approved courses relating to the appraisal of income-producing and/or non-residential property, including classroom hours on the topics of the Code of Professional Ethics and Uniform Standards of Professional Appraisal Practice. The applicant must have at least three years of experience as an appraiser trainee under the supervision of a Delaware licensed or certified general real estate appraiser, at least two years of which shall have been under the supervision of a Delaware certified general real estate appraiser or Delaware licensed general real estate appraiser. The applicant must submit to the Council a list of at least 30 appraisals of residential real estate of one to four family units or up to twelve units when a net income capitalization analysis Is not required, and ten appraisals of non-residential, multi-family residential (In excess of four units) and/or income-producing properties which appraisals were completed by the applicant under said supervision, with verification by the supervisor that the work was substantially completed by the applicant. Having obtained the prerequisite education and experience requirements, the applicant must, prior to licensing, pass an examination approved by the Council.
§2937. Council Administration.
(a) Nothing herein contained shall preclude the Council from determining, after investigation as to the facts of a particular case, that any or all of the above education and experience requirements are met by the background and qualifications of an applicant which are recognized by the Council as meeting the requirements of this subchapter.
§2938. Non-resident Licensure and Certification.
(a) Every applicant for certification or licensure under this subchapter who is not a resident of this State shall submit, with the application for Certification or licensure, an irrevocable consent that service of process upon him or her may be made by delivery of the process to the Secretary of State if, in an action against the applicant In a court of this state arising out of the applicant's activities as a real estate appraiser, the plaintiff cannot, in the exercise of due diligence, effect personal service upon the applicant.
(b) A non-resident of this State who has complied with the provisions of this subchapter shall obtain a licensure or certification for real estate appraisal.
(c) If, in the determination by the Council, another State is found to have licensure and/or certification provisions approved by the Appraisal Subcommittee of the Federal Financial Institutions Examination council, an applicant who Is licensed or certified as a real estate appraiser in that State shall obtain the equivalent license or certification in this State.
§2939. Disciplinary Proceedings; Reprimand; Revocation of Privileges.
All complaints shall be received and investigated In accordance with subsection (i), Section 8810, Chapter 88, Title 29 of the Delaware Code. The rights of any person as a state certified or licensed real estate appraiser may be revoked or suspended, or the person may be otherwise disciplined in accordance with the provisions of this subchapter, upon any of the grounds set forth in this section. The Council may investigate the actions of a state certified or licensed real estate appraiser, and may revoke or suspend the rights of a certified or licensed real estate appraiser, or otherwise discipline an appraiser for any of the following acts or omissions:
(a) Procuring or attempting to procure licensure or certification pursuant to this subchapter by knowingly making a false statement, submitting false information, refusing to provide complete information in response to a question in an application for licensure or certification, or through any form of fraud or misrepresentation;
(b) Failing to meet the minimum qualifications established by this subchapter;
(c) Paying money other than provided for by this subchapter to any member or employee of the Council to procure licensure or certification under this subchapter;
(d) A conviction of a felony or a misdemeanor which is substantially related to the qualifications, functions and duties of a person developing real estate appraisals and communicating real estate appraisals to others;
(e) An act or omission involving dishonesty, fraud or misrepresentation with the intent to substantially benefit the licensed or certified appraiser or another person or with the intent to substantially injure another person;
(f) Failure or refusal without good cause to exercise reasonable diligence In developing an appraisal, preparing an appraisal report or communicating an appraise);
(g) Negligence or incompetence in developing an appraisal, in preparing an appraisal report, or in communicating an appraisal;
(h) Willfully disregarding or violating any of the provisions of this subchapter or the regulations of the Council for the administration and enforcement of the provisions of this subchapter;
(i) Accepting an appraisal assignment when the employment itself is contingent upon the appraiser reporting a predetermined estimate, analysis or opinion, or where the fee to be paid is contingent upon the appraiser reporting a predetermined estimate, analysis or opinion, or where the fee to be paid is contingent upon the opinion, conclusion or valuation reached, or upon the consequences resulting from the appraisal assignment;
(j) Violating the confidential nature of client records to which he or she gained access through employment or engagement as an appraiser; or
(k) Entry of a final civil judgment against the person on grounds of fraud, misrepresentation or deceit in the making of any appraisal of real property. In a disciplinary proceeding based upon a civil judgment, the real estate appraiser shall be afforded an opportunity to present matters in mitigation and extenuation, but may not collaterally attack the civil judgment.
§244(). Disciplinary Sanctions.
(a) The Council may impose any of the following sanctions, singly or in combination when it finds, after a hearing, that one of the conditions or violations set forth in §2962 of this title applies to a practitioner regulated by this subchapter.
(1) Issue a letter of reprimand;
(2) Censure a practitioner;
(3) Place a practitioner on probationary status, and require the practitioner to
a. Report regularly to the Council upon the matters which are the basis of the probation.
b. Limit all practice and professional activities to those areas prescribed by the Council; and/or
c. Continue or renew his professional education until the required degree of skill has been attained in those areas which are the basis of the probation.
(4) Suspend or revoke any practitioner's certification or license.
§2941. Hearing Procedures.
(a) Upon receipt of a complaint from the Attorney General's office or an investigative report of a complaint from the Division of Professional Regulation, the Council shall determine what action, if any, it shall take. If the Council decides not to take any further action, and the complainant is known to the Council, the Council shall forward by letter to the complainant its reasons for not taking further action. Where the Council has determined to take further action, the matter shall be heard by the Council within 3 months from the date on which the complaint was received. The Council shall fix the time and place for a full hearing of the matter, and shall cause a copy of the complaint, together with a notice of the time and place fixed for the hearing, to be personally delivered or served upon the practitioner at least 30 days before the date fixed for the hearing. In cases where the practitioner cannot be located or where personal service cannot be effected, substitute service shall be effected in the same manner as with civil litigation.
(b) All hearings shall be informal without use of the rules of evidence. If the Council finds, by a majority vote of all members, that the complaint has merit, the Council shall take such action permitted under this Chapter as it deems necessary. The Council decision shall be in writing and shall include its reasons for such decision. A copy of the decision shall be mailed immediately to the practitioner. The Council decision shall become effective on the 30th day after the date it is mailed or served on the practitioner, unless there is an appeal by the practitioner to the Superior Court within that time.
§2942. Practicing without a licensure; penalties.
(a) Where the Council has determined that person is practicing real estate appraising within this State without having lawfully obtained a license therefor, or that a person previously licensed is unlawfully practicing although his or her license has been suspended or revoked, the Council shall formally warn such person. If the offense continues, the Council shall make a formal complaint to the Attorney General. The complaint shall include all evidence known to, or in the possession of, the Council.
(b) Where the Council has placed a practitioner on probationary status under certain restrictions or conditions, and the Council has determined that such restrictions or conditions are being or have been violated by the practitioner, it may, after a hearing on the matter, suspend or revoke the practitioner's license.
(a) This act specifically adopts the terms 'appraisal subcommittee,' federally related transaction', 'real estate related financial transaction', 'federal financial institutions regulatory agencies', and 'financial institution' contained in Title 12 United States Code, Chapter 34A and in any subsequent amendments thereto.
(b) 'Real estate appraiser' means any person who, subsequent to the effective date of this subchapter, for compensation or valuable consideration, advises, consults or prepares analyses with respect to real estate values, uses, sales developments or disposition including acquisitions by eminent domain, or renders opinions relevant to the marketability of real estate, as a whole or partial vocation. This subchapter does not apply to any real estate licensee who-prepares a competitive market analysis survey used only for the purpose of listing a property for sale or lease nor to any individual who prepares real estate appraisals for his full-time employer for the employer's internal use only and which is performed in the regular course of employee's position."
Section 2. Amend Section 2901(a)(3), Chapter 29, Title 24, Delaware Code by striking said paragraph in its entirety and renumbering the remaining paragraphs accordingly.
Section 3. Amend Section 2905(b), Title 24, Delaware Code by striking said subsection in its entirety.
Section 4. Amend Section 2905(c), Chapter 29, Title 24, Delaware Code by striking the phrase "real estate salespersons and real estate appraisers." at the end of subsection "c" and substituting In lieu thereof the phrase "and real estate salespersons."
Section 5. Amend Section 2906, Chapter 29, Title 24, Delaware Code by striking said section and substituting in lieu thereof the following:
"No person, partnership, association or corporation shall act as a real estate broker or real estate salesperson, or advertise or assume to act as such real estate broker or real estate salesperson without being registered and without a certificate of registration issued by the Commission.
No partnership, association or corporation shall be granted a certificate unless every member or officer of such partnership, association, or corporation who actively participates in the brokerage business of such partnership, association or corporation holds a certificate as a real estate broker and unless every employee who acts as a salesperson for such person, partnership, association or corporation holds a certificate as a real estate salesperson."
Section 6. Amend §2907, Chapter 29, Title 24, Delaware Code, by striking the words ", real estate salesperson or real estate appraiser" as the same appear in said section and substituting the words "and real estate salesperson" in lieu thereof.
Section 7. Amend §2904, Chapter 29, Title 24, Delaware Code by striking said section in its entirety.
Section 8. Severability.
If any section or subsection of this act shall be declared invalid by a court of competent jurisdiction or the Appraisal Subcommittee Council, the validity shall not affect other provisions of this act which can be given effect without the invalid provision or, to this end, are severable from any invalid section.
Section 9. Amend §2901, Title 24, Delaware Code, by redesignating subsections (a)(1) through (a)(5) as subsections (a)(2) through (a)(6) and adding a new subsection (a)(1) to read as follows:
"(a)(1) "Appraisal assignment" means an engagement for which an appraiser is employed or retained to act, or would be perceived by third parties or the public as acting, as a disinterested third party in rendering an unbiased appraisal."
Section 10. The provisions of this Act shall become effective September 30, 1990.
Further amend Chapter 29, Title 24 Delaware Code by redesignating existing Sections 2940 through 2950 as Sections 2950 through 2960.
Section 11. Amend §2909, Chapter 29, Title 24, Delaware Code, by striking the words ", salesperson or appraiser" and ", salesperson's or appraiser's" as the same appear in said section and substituting the words "and salesperson" and "or salesperson's" in lieu thereof.
Section 12. Amend §2909, Chapter 29, Title 24, Delaware Code, by striking the words "When an applicant for licensure by reciprocity as a real estate appraiser can show that he or she possesses the relevant background the Commission shall license the applicant as a real estate appraiser." as the same appear in said section.
Section 13. Amend §2912, Chapter 29, Title 24, Delaware Code, by striking the words ", real estate salesperson or real estate appraiser" as the same appear in said section and substituting the words "or real estate salesperson" in lieu thereof.
Section 14. Amend §2916, Chapter 29, Title 24, Delaware Code, by striking the words ", salespersons and appraisers." as the same appear in said section and substituting "and salespersons" in lieu thereof.
Section 15. Amend §2921, Chapter 29, Title 24, Delaware Code, by striking the words ", real estate salesperson or real estate appraiser", ", real estate salesperson and real estate appraiser" and", real estate salesperson's or real estate appraiser's" as the same appear In said section and substituting "or salesperson", "and real estate salesperson" and "and real estate salesperson's" In lieu thereof.
Approved July 17, 1990.