H-3465.2          _______________________________________________

 

                                  HOUSE BILL 2430

                  _______________________________________________

 

State of Washington              52nd Legislature             1992 Regular Session

 

By Representatives O'Brien and May

 

Read first time 01/16/92.  Referred to Committee on Commerce & Labor.

Regulating real estate appraisers.


     AN ACT Relating to real estate appraisers; amending RCW 18.140.005, 18.140.010, 18.140.020, 18.140.030, 18.140.040, 18.140.060, 18.140.070, 18.140.080, 18.140.090, 18.140.100, 18.140.110, 18.140.120, 18.140.130, 18.140.140, 18.140.150, 18.140.160, 18.140.170, 18.140.180, and 18.140.190; adding new sections to chapter 18.140 RCW; creating a new section; and declaring an emergency.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

 

     Sec. 1.  RCW 18.140.005 and 1989 c 414 s 1 are each amended to read as follows:

     It is the intent of the legislature that only individuals who meet and maintain minimum standards of competence and conduct may provide certified or licensed appraisal services to the public.

 

     Sec. 2.  RCW 18.140.010 and 1989 c 414 s 3 are each amended to read as follows:

     As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

     (1) "Appraisal" or "real estate appraisal" means an analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate, for or in expectation of compensation.  An appraisal may be classified by subject matter into either a valuation or an analysis.  A "valuation" is an estimate of the value of real estate or real property.  An "analysis" is a study of real estate or real property other than estimating value.

     (2) "Appraisal report" means any communication, written or oral, of an appraisal, except that all appraisal reports in federally related transactions are required to be written reports.

     (3) "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 analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate.  The term "appraisal assignment" may apply to valuation work and analysis work.

     (4) (("Board" means the certified real estate appraiser certification board.

     (5))) "Certified appraisal" means an appraisal prepared or signed by a state-certified real estate appraiser.  A certified appraisal represents to the public that it meets the appraisal standards defined in this chapter.

     (5) "Committee" means the real estate appraiser advisory committee of the state of Washington.

     (6) "Department" means the department of licensing.

     (7) "Director" means the director of the department of licensing.

     (8) "Licensed appraisal" means an appraisal prepared or signed by a state-licensed real estate appraiser.  A licensed appraisal represents to the public that it meets the appraisal standards defined in this chapter.

     (9) "Real estate" means an identified parcel or tract of land, including improvements, if any.

     (((9))) (10) "Real property" means one or more defined interests, benefits, or rights inherent in the ownership of real estate.

     (((10))) (11) "Specialized appraisal services" means all appraisal services which do not fall within the definition of appraisal assignment.  The term "specialized appraisal service" may apply to valuation work and to analysis work.  Regardless of the intention of the client or employer, if the appraiser would be perceived by third parties or the public as acting as a disinterested third party in rendering an unbiased analysis, opinion, or conclusion, the work is classified as an appraisal assignment and not a specialized appraisal service.

     (((11))) (12) "State-certified general real estate appraiser" means a person certified by the director to develop and communicate real estate appraisals of all types of property.  A state-certified general real estate appraiser may designate or identify an appraisal rendered by him or her as a "certified appraisal."

     (13) "State-certified residential real estate appraiser" means a person ((who)) certified by the director to develop((s)) and communicate((s)) real estate appraisals ((and who holds a valid certificate issued to him or her for either general or residential real estate under this chapter)) of all types of residential property of one to four units without regard to transaction value or complexity and nonresidential property having a transaction value less than two hundred fifty thousand dollars.  A ((state-certificated)) state certified residential real estate appraiser may designate or identify an appraisal rendered by him or her as a "certified appraisal." ((and indicate which type of certification is held.))

     (14) "State-licensed real estate appraiser" means a person licensed by the director to develop and communicate real estate appraisals of noncomplex one to four residential units having a transaction value less than one million dollars and complex one to four residential units having a transaction value less than two hundred fifty thousand dollars and nonresidential property having a transaction value less than two hundred fifty thousand dollars.  A state-licensed real estate appraiser may designate or identify an appraisal rendered by him or her as a "licensed appraisal."

 

     Sec. 3.  RCW 18.140.020 and 1989 c 414 s 4 are each amended to read as follows:

     (1) No person, other ((that [than])) than a state-certified or state-licensed real estate appraiser, may assume or use that title or any title, designation, or abbreviation likely to create the impression of certification or licensure as a real estate appraiser by this state.  A person who is not certified or licensed under this chapter shall not describe or refer to any appraisal ((or)) of real estate located in this state by the term "certified" or "licensed."

     (2) This section does not preclude a person who is not certified or licensed as a state-certified or state-licensed real estate appraiser from appraising real estate in this state for compensation, except in federally related transactions requiring licensure or certification to perform appraisal services.

 

     Sec. 4.  RCW 18.140.030 and 1989 c 414 s 7 are each amended to read as follows:

     The director shall have the following powers and duties:

     (1) To adopt rules in accordance with chapter 34.05 RCW necessary to implement this chapter;

     (2) To receive and approve or deny applications for certification or licensure as a state-certified or state-licensed real estate appraiser under this chapter; to establish appropriate administrative procedures for the processing of such applications; to issue certificates or licenses to qualified applicants pursuant to the provisions of this chapter; and to maintain a register of the names and addresses of individuals who are currently certified or licensed under this chapter;

     (3) To establish, provide administrative assistance ((to)), and appoint the members for the real estate appraiser ((certification board)) advisory committee to enable the ((board)) committee to ((carry out its responsibilities under this chapter)) act in an advisory capacity to the director;

     (4) To solicit bids and enter into contracts with educational testing services or organizations for the preparation of questions and answers for certification or licensure examinations;

     (5) To administer or contract for administration of certification or licensure examinations at locations and times as may be required to carry out the responsibilities under this chapter;

     (6) To enter into contracts for professional services determined to be necessary for adequate enforcement of this chapter;

     (7) To consider recommendations by the real estate appraiser ((certification board)) advisory committee relating to the experience, education, and examination requirements for each classification of state-certified appraiser and for licensure;

     (((7))) (8) To impose continuing education requirements as a prerequisite to renewal of certification or licensure;

     (((8))) (9) To consider recommendations by the real estate appraiser ((certification board)) advisory committee relating to standards of professional appraisal practice in the enforcement of this chapter;

     (((9) To issue an annual statement describing the receipts and expenditures in the administration of this chapter during each fiscal year;))

     (10) To investigate all complaints or reports of unprofessional conduct as defined in this chapter and to hold hearings as provided in this chapter;

     (11) To establish appropriate administrative procedures for disciplinary proceedings conducted pursuant to the provisions of this chapter;

     (((11))) (12) To compel the attendance of witnesses and production of books, documents, records, and other papers; to administer oaths; and to take testimony and receive evidence concerning all matters within their jurisdiction.  These powers may be exercised directly by the director or the director's authorized representatives acting by authority of law;

     (((12))) (13) To take emergency action ordering summary suspension of a license or certification pending proceedings by the director;

     (14) To employ such professional, clerical, and technical assistance as may be necessary to properly administer the work of the director;

     (((13))) (15) To establish forms necessary to administer this chapter; ((and

     (14))) (16) To adopt standards of professional conduct or practice; and

     (17) To do all other things necessary to carry out the provisions of this chapter and minimally meet the requirements of federal guidelines regarding state certification or licensure of appraisers that the director determines are appropriate for state-certified and state-licensed appraisers in this state.

 

     Sec. 5.  RCW 18.140.040 and 1989 c 414 s 8 are each amended to read as follows:

     The director((, members of the board,)) or individuals acting on ((their)) behalf of the director are immune from suit in any action, civil or criminal, based on any acts performed in the course of their duties except for their intentional or willful misconduct.

 

     Sec. 6.  RCW 18.140.060 and 1989 c 414 s 10 are each amended to read as follows:

     (1) Applications for examinations, original certification or licensure, and renewal certification or licensure shall be made in writing to the department on forms approved by the director.  Applications for original and renewal certification or licensure shall include a statement confirming that the applicant shall comply with applicable rules and regulations and that the applicant understands the penalties for misconduct.

     (2) The appropriate fees shall accompany all applications for examination, reexamination, original certification or licensure, and renewal certification or licensure.

 

     Sec. 7.  RCW 18.140.070 and 1989 c 414 s 11 are each amended to read as follows:

     There shall be one category of state-licensed real estate appraisers and two categories of state-certified real estate appraisers as follows:

     (1) The ((state-certified residential)) state-licensed real estate appraiser ((classification shall consist of those persons meeting the requirements for appraisal of residential real property of one to four units.));

     (2) The state-certified ((general)) residential real estate appraiser ((classification shall consist of those persons meeting the requirements for certification relating to the appraisal of all types of real property));

     (3) The state-certified general real estate appraiser.

 

     Sec. 8.  RCW 18.140.080 and 1989 c 414 s 12 are each amended to read as follows:

     (((1))) As a prerequisite to taking ((the)) an examination for certification ((as a state-certified general real estate appraiser)) or licensure, an applicant shall present evidence satisfactory to the director that he or she has successfully completed the education requirements adopted by the director.

     (((2) As a prerequisite to taking the examination for certification as a state-certified residential real estate appraiser, an applicant shall present evidence satisfactory to the director that he or she has successfully completed the education requirements adopted by the director.

     (3) The education requirements of subsections (1) and (2) of this section may be waived by the director if the applicant presents evidence to the satisfaction of the director that the applicant was practicing as a real estate appraiser in the state of Washington on July 1, 1990.))

 

     Sec. 9.  RCW 18.140.090 and 1989 c 414 s 13 are each amended to read as follows:

     As a prerequisite to taking ((the)) an examination for certification ((as a state-certified real estate appraiser)) or licensure, an applicant must meet the experience requirements adopted by the director.

 

     Sec. 10.  RCW 18.140.100 and 1989 c 414 s 14 are each amended to read as follows:

     An original ((certification as a state-certified real estate appraiser)) license or certificate shall be issued to persons who have satisfactorily passed ((a)) the written examination as endorsed by the Appraisal Qualification Board of the Appraisal Foundation and as adopted by the director.

 

     Sec. 11.  RCW 18.140.110 and 1989 c 414 s 15 are each amended to read as follows:

     Every applicant for licensing or certification who is not a resident of this state shall submit, with the application for licensing or certification, an irrevocable consent that service of process upon him or her may be made by service on the director if, in an action against the applicant in a court of this state arising out of the applicant's activities as a state-licensed or state-certified real estate appraiser, the plaintiff cannot, in the exercise of due diligence, obtain personal service upon the applicant.

 

     Sec. 12.  RCW 18.140.120 and 1989 c 414 s 16 are each amended to read as follows:

     An applicant for licensure or certification who is currently licensed or certified and in good standing under the laws of another state may obtain a license or certificate as a Washington state-licensed or state-certified real estate appraiser without being required to satisfy the examination requirements of this chapter if:  The director determines that the licensure or certification requirements are substantially similar to those found in Washington state; and that the other state has a written reciprocal agreement to provide similar treatment to holders of Washington state licenses and/or certificates.

 

     Sec. 13.  RCW 18.140.130 and 1989 c 414 s 17 are each amended to read as follows:

     (1) Each original and renewal license or certificate issued under this chapter shall ((be for a period of two years)) expire on the applicant's second birthday following issuance of the license or certificate.

     (2) To be renewed as a state-licensed or state-certified real estate appraiser, the holder of a valid license or certificate shall apply and pay the prescribed fee to the director no earlier than one hundred twenty days prior to the expiration date of the license or certificate and shall demonstrate satisfaction of any continuing education requirements.

     (3) If a person fails to renew a license or certificate prior to its expiration and no more than two years have passed since the person last held a valid license or certificate, the person may obtain a renewal license or certificate by satisfying all of the requirements for renewal and paying late renewal fees.

     The director shall cancel the license or certificate of any person whose renewal fee is not received within two years from the date of expiration.  A person may obtain a new license or certificate by satisfying the procedures and qualifications for initial licensure or certification, including the successful completion of any applicable examinations.

 

     Sec. 14.  RCW 18.140.140 and 1989 c 414 s 18 are each amended to read as follows:

     (1) A license or certificate issued under this chapter shall bear the signature or facsimile signature of the director and a license or certificate number assigned by the director.

     (2) Each state-licensed or state-certified real estate appraiser shall place his or her certificate number adjacent to or immediately below the title "state-licensed real estate appraiser," "state-certified residential real estate appraiser," or "state-certified general real estate appraiser" when used in an appraisal report or in a contract or other instrument used by the licensee or certificate holder in conducting real property appraisal activities.

 

     Sec. 15.  RCW 18.140.150 and 1989 c 414 s 19 are each amended to read as follows:

     (1) The term "state-licensed" or "state-certified real estate appraiser" may only be used to refer to individuals who hold the license or certificate and may not be used following or immediately in connection with the name or signature of a firm, partnership, corporation, or group, or in such manner that it might be interpreted as referring to a firm, partnership, corporation, group, or anyone other than an individual holder of the license or certificate.

     (2) No license or certificate may be issued under this chapter to a corporation, partnership, firm, or group.  This shall not be construed to prevent a state-licensed or state-certified appraiser from signing an appraisal report on behalf of a corporation, partnership, firm, or group practice.

 

     NEW SECTION.  Sec. 16.  A new section is added to chapter 18.140 RCW to read as follows:

     (1) A real estate appraiser from another state who is licensed or certified by another state may apply for registration to receive temporary licensing or certification in Washington by paying a fee and filing a notarized application with the department on a form provided by the department.

     (2) Licensing and certification privileges granted under the provisions of this section shall expire sixty days from issuance.  Licensing or certification shall not be renewed, nor shall an applicant receive more than two registrations within any twelve-month period.

     (3) Persons granted temporary licensing or certification privileges under this section shall not advertise or otherwise hold themselves out as being licensed or certified by the state of Washington.

     (4) Persons granted temporary licensure or certification are subject to all provisions under this chapter.

 

     Sec. 17.  RCW 18.140.160 and 1989 c 414 s 20 are each amended to read as follows:

     An application for licensure or certification ((or recertification)) may be denied((, and the certification of any state-certified real estate appraiser may be revoked, suspended,)).  The director may impose any one or more of the following sanctions against state-licensed or state-certified appraisers:  Suspend, revoke, or levy a fine not to exceed one thousand dollars for each offense and/or otherwise ((disciplined)) discipline in accordance with the provisions of this chapter, for any of the following acts or omissions:

     (1) Failing to meet the minimum qualifications for state licensure or certification established by or pursuant to this chapter;

     (2) Procuring or attempting to procure state licensure or certification under this chapter by knowingly making a false statement, knowingly submitting false information, or knowingly making a material misrepresentation on any application filed with the director;

     (3) Paying money other than the fees provided for by this chapter to any employee of the director or the board to procure state licensure or certification under this chapter;

     (4) Obtaining a license or certification through the mistake or inadvertence of the director;

     (5) Conviction of any gross misdemeanor or felony or the commission of any act involving moral turpitude, dishonesty, or corruption whether or not the act constitutes a crime.  If the act constitutes a crime, conviction in a criminal proceeding is not a condition precedent to disciplinary action.  Upon such a conviction, however, the judgment and sentence is conclusive evidence at the ensuing disciplinary hearing of the guilt of the license or certificate holder or applicant of the crime described in the indictment or information, and of the person's violation of the statute on which it is based.  For the purposes of this section, conviction includes all instances in which a plea of guilty or nolo contendere is the basis for the conviction and all proceedings in which the sentence has been deferred or suspended.  Nothing in this section abrogates rights guaranteed under chapter 9.96A RCW;

     (6) Failure or refusal without good cause to exercise reasonable diligence in developing an appraisal, preparing an appraisal report, or communicating an appraisal;

     (((5))) (7) Negligence or incompetence in developing an appraisal, preparing an appraisal report, or communicating an appraisal;

     (((6))) (8) Continuing to act as a state-licensed or state-certified real estate appraiser when his or her license or certificate is on an expired status;

     (((7))) (9) Failing, upon demand, to disclose any information within his or her knowledge to, or to produce any document, book, or record in his or her possession for inspection of the director or the director's authorized representatives acting by authority of law; ((and

     (8))) (10) Violating any provision of this chapter or any lawful rule or regulation made by the director pursuant thereto;

     (11)  Advertising in a false, fraudulent, or misleading manner;

     (12) Suspension, revocation, or restriction of the individual's license or certification to practice the profession by competent authority in any state, federal, or foreign jurisdiction, with a certified copy of the order, stipulation, or agreement being conclusive evidence of the revocation, suspension, or restriction;

     (13) Failing to comply with an order issued by the director;

     (14) Committing any act of fraudulent or dishonest dealing or a crime involving moral turpitude, with a certified copy of the final holding of any court of competent jurisdiction in such matter being conclusive evidence in any hearing under this chapter; and

     (15) Issuing an appraisal report on any real property in which the appraiser has an interest unless his or her interest is clearly stated in the appraisal report.

 

     Sec. 18.  RCW 18.140.170 and 1989 c 414 s 21 are each amended to read as follows:

     The director may investigate the actions of a state-licensed or state-certified real estate appraiser or an applicant for licensure or certification or relicensure or recertification.  Upon receipt of information indicating that a state-licensed or state-certified real estate appraiser under this chapter may have violated this chapter, the director shall cause one or more of the staff investigators to make an investigation of the facts to determine whether or not there is admissible evidence of any such violation.  If technical assistance is required, a staff investigator may consult with ((not)) one or more ((than one)) of the ((appraiser)) members of the ((board.  If an appraiser member of the board is consulted and renders assistance in an investigation, the appraiser member is excused from service on the board in connection with any administrative hearing that may result from such investigation)) committee.

     In any investigation made by the director's investigative staff, the director shall have the power to compel the attendance of witnesses and the production of books, documents, records, and other papers, to administer oaths, and to take testimony and receive evidence concerning all matters within the director's jurisdiction.

     If the director determines, upon investigation, that a state-licensed or state-certified real estate appraiser under this chapter has violated this chapter, a statement of charges shall be prepared and served upon the state-licensed or state-certified real estate appraiser.  This statement of charges shall require the accused party to file an answer to the statement of charges within twenty days of the date of service.

     In responding to a statement of charges, the accused party may admit to the allegations, deny the allegations, or otherwise ((plea)) plead. Failure to make a timely response shall be deemed an admission of the allegations contained in the statement of charges and will result in a default whereupon the director may enter an order under RCW 34.05.440.  If a hearing is requested, the time of the hearing shall be scheduled but the hearing shall not be held earlier than thirty days after service of the charges upon the accused.  A notice of hearing shall be issued at least twenty days prior to the hearing, specifying the time, date, and place of hearing.

 

     NEW SECTION.  Sec. 19.  A new section is added to chapter 18.140 RCW to read as follows:

     (1) The director may issue a cease and desist order to a person after notice and hearing and upon a determination that the person has violated a provision of this chapter or a lawful order or rule of the director.

     (2) If the director makes a written finding of fact that the public interest will be irreparably harmed by delay in issuing an order, the director may issue a temporary cease and desist order.  Before issuing the temporary cease and desist order, whenever possible, the director shall give notice by telephone or otherwise of the proposal to issue a temporary cease and desist order to the person.  Every temporary cease and desist order shall include a provision that a hearing will be held upon request to determine whether the order will become permanent.

     At the time the temporary cease and desist order is served, the person shall be notified that he or she is entitled to request a hearing for the sole purpose of determining whether the public interest requires that the temporary cease and desist order be continued or modified pending the outcome of the hearing to determine whether the order will become permanent.  The hearing shall be held within thirty days after the department receives the request for hearing, unless the person requests a later hearing.  A person may secure review of any decision rendered at a temporary cease and desist order review hearing in the same manner as an adjudicative proceeding.

 

     Sec. 20.  RCW 18.140.180 and 1989 c 414 s 22 are each amended to read as follows:

     The administrative hearing on the allegations in the statement of charges may be heard by ((the board or)) an administrative law judge appointed under chapter 34.12 RCW at the time and place prescribed by the director and in accordance with the provisions of the administrative procedure act, chapter 34.05 RCW.  If the ((board or the)) administrative law judge determines that a state-licensed or state-certified real estate appraiser is guilty of a violation of any of the provisions of this chapter, a formal decision shall be prepared that contains findings of fact and recommendations to the director concerning the appropriate disciplinary action to be taken.

     In such event the director shall enter an order to that effect and shall file the same in his or her office and immediately mail a copy thereof to the affected party at the addresses of record with the department.  Such order shall not be operative for a period of ten days from the date thereof.  Any ((licensee or applicant)) party aggrieved by a final decision by the director in an adjudicative proceeding whether such decision is affirmative or negative in form, is entitled to a judicial review in the superior court under the provisions of the administrative procedure act, chapter 34.05 RCW.

 

     Sec. 21.  RCW 18.140.190 and 1989 c 414 s 23 are each amended to read as follows:

     The attorney general shall render to the director ((and board)) opinions upon all questions of law relating to the construction or interpretation of this chapter, or arising in the administration thereof that may be submitted by the director ((or board)), and shall act as attorney for the director ((and board)) in all actions and proceedings brought by or against the director ((and board)) under or pursuant to any provisions of this chapter.

 

     NEW SECTION.  Sec. 22.     The department shall identify and notify all holders of state-certified residential appraiser certificates that their certificates will be converted to the designation of state-licensed real estate appraiser if they have not met the educational requirements for state-certified residential appraiser as prescribed by the director and the Appraiser Qualifications Board of the Appraisal Foundation.  The department shall issue licenses with the new designation which reflects the person's qualifications as prescribed by the director.

 

     NEW SECTION.  Sec. 23.     This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.