PRINTER'S NO. 1942
No. 1637 Session of 1989
INTRODUCED BY O'BRIEN, NAHILL, BATTISTO, ALLEN, PISTELLA,
MORRIS, TRELLO, DISTLER, ROBINSON, COHEN, GODSHALL, ADOLPH,
KENNEY, MELIO, BELARDI, FLICK, WILLIAMS, LANGTRY, FARMER,
RITTER, CORRIGAN, DONATUCCI, MICOZZIE, HERMAN, E. Z. TAYLOR,
MILLER, BUNT, CORNELL, PRESTON, KAISER, MARKOSEK AND JAROLIN,
JUNE 5, 1989
REFERRED TO COMMITTEE ON PROFESSIONAL LICENSURE, JUNE 5, 1989
AN ACT
1 Amending the act of February 19, 1980 (P.L.15, No.9), entitled
2 "An act establishing the State Real Estate Commission and
3 providing for the licensing of real estate brokers and
4 salesmen," providing for the licensing of real estate
5 appraisers.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Section 201 of the act of February 19, 1980
9 (P.L.15, No.9), known as the Real Estate Licensing and
10 Registration Act, amended March 29, 1984 (P.L.162, No.32), is
11 amended by adding definitions to read:
12 Section 201. Definitions.
13 The following words and phrases when used in this act shall
14 have, unless the context clearly indicates otherwise, the
15 meanings given to them in this section:
16 "Appraisal assignment." An engagement for which an appraiser
17 is employed or retained to serve, or would be perceived by third
1 parties or the public as serving, as a disinterested third party
2 in rendering an unbiased analysis, opinion or conclusion
3 relating to the nature, quality, value or utility of specified
4 interests in, or aspects of, identified real estate.
5 "Appraisal report." A written analysis, opinion or
6 conclusion relating to the nature, quality, value or utility of
7 specified interests in, or aspects of, identified real estate,
8 including, but not limited to, valuation reports, real estate
9 counseling reports, real estate tax counseling reports, real
10 estate offering memoranda, mortgage banking offers, highest and
11 best use studies, market demand and economic feasibility studies
12 and all other reports communicating an appraisal analysis,
13 opinion or conclusion, regardless of title.
14 * * *
15 "Certified appraisal." An appraisal report prepared by a
16 State-certified real estate appraiser.
17 * * *
18 "Real estate appraisal" or "appraisal." An analysis, opinion
19 or conclusion relating to the nature, quality, value or utility
20 of specified interests in, or aspects of, identified real
21 estate, for or in expectation of compensation.
22 * * *
23 "State-certified real estate appraiser." A natural person
24 licensed as a real estate broker who also holds a current valid
25 certificate as an appraiser issued to him under this act.
26 * * *
27 Section 2. Sections 202(a) and 401 of the act, amended or
28 added March 29, 1984 (P.L.162, No.32), are amended to read:
29 Section 202. State Real Estate Commission.
30 (a) The State Real Estate Commission is hereby created and
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1 shall consist of the Commissioner of Professional and
2 Occupational Affairs; the Director of the Bureau of Consumer
3 Protection, or his designee; three members who shall be persons
4 representing the public at large; five other persons, each of
5 whom shall at the time of his appointment be a licensed and
6 qualified real estate broker under the existing law of this
7 Commonwealth, and shall have been engaged in the real estate
8 business in this Commonwealth for a period of not less than ten
9 years immediately prior to his appointment; and one other person
10 who shall have been licensed as a real estate broker, or limited
11 real estate broker, for a period of at least five years and
12 shall have been engaged in selling cemetery lots for at least
13 ten years immediately prior to his appointment. Each of said
14 members of the commission shall be appointed by the Governor[.]
15 and confirmed by a majority of the members elected to the
16 Senate. The Governor shall ensure that at least two broker
17 members of the commission shall be eligible for certification as
18 real estate appraisers.
19 * * *
20 Section 401. Duty to issue licenses and registration
21 certificates.
22 It shall be the duty of the department to issue licenses,
23 appraiser certificates and registration certificates to any
24 person who shall comply with the provisions of this act.
25 Section 3. Chapter 5 of the act is amended by adding a
26 subchapter to read:
27 CHAPTER 5
28 QUALIFICATIONS AND APPLICATIONS FOR LICENSES
29 AND REGISTRATION CERTIFICATES
30 * * *
19890H1637B1942 - 3 -
1 SUBCHAPTER I
2 REAL ESTATE APPRAISERS
3 Section 581. Certification.
4 (a) The commission shall have the power and its duty shall
5 be to certify qualified real estate broker licensees to perform
6 appraisals. To obtain such certification, a licensee shall
7 submit an application to the commission on a form provided by
8 the commission showing to the satisfaction of the commission
9 that the licensee:
10 (1) Has successfully completed a course of study of at
11 least 150 classroom hours approved by the commission.
12 (2) Has passed a written examination approved by the
13 commission, which examination was prepared and administered
14 by a qualified and approved professional testing organization
15 in accordance with section 812.1 of the act of April 9, 1929
16 (P.L.177, No.175), known as "The Administrative Code of
17 1929."
18 (b) The requirements of subsection (a) shall not apply and a
19 certificate for the appraisal of real property shall be issued
20 without examination to any person who:
21 (1) Is licensed on the effective date of this section as
22 a real estate broker pursuant to this act.
23 (2) Has been certified to perform appraisals by an
24 organization offering instruction in real estate appraisal
25 and certification as an appraiser, which certification was
26 obtained prior to the effective date of this section as a
27 result of the satisfactory completion of educational courses
28 and the passing of a written examination.
29 (3) Applies for certification within one year of the
30 effective date of this section.
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1 Section 582. Renewal.
2 Certificates shall be renewed biennially for a period of two
3 years upon payment of a fee established by the commission by
4 regulation. All fees required pursuant to this subchapter,
5 including fees for the issuance of certificates, renewal of
6 certificates, and examinations, shall be set by the commission
7 by regulation, subject to the act of June 25, 1982 (P.L.633,
8 No.181), known as the "Regulatory Review Act."
9 Section 583. Classes of certification.
10 There shall be two classes of certification for certified
11 real estate appraisers. One class shall consist of those persons
12 applying for certification relating solely to the appraisal of
13 residential real property of one to four units, and up to 12
14 units when a net income capitalization analysis is not required
15 by the terms of the assignment. The other class of certification
16 shall consist of those persons applying for a general
17 certification relating to the appraisal of real property. The
18 classification of certification desired shall be specified on an
19 application for examination, for original certification and for
20 certification renewals.
21 Section 584. Examinations.
22 (a) An original certification as a State-certified real
23 estate appraiser shall be issued to any individual licensed as a
24 real estate broker who demonstrates through a written
25 examination process that he or she possesses adequate knowledge
26 of:
27 (1) Technical terms commonly used in or related to real
28 estate appraising, appraisal report writing and economic
29 concepts applicable to real estate.
30 (2) Theories of depreciation, cost estimating, methods
19890H1637B1942 - 5 -
1 of capitalization and the mathematics of real estate
2 appraisal.
3 (3) Principles of land economics, real estate appraisal
4 processes and problems likely to be encountered in the
5 gathering, interpreting and processing of data in carrying
6 out appraisal services.
7 (4) Standards for the development and communication of
8 real estate appraisals as determined by the commission.
9 (5) Such additional knowledge, skills and competencies
10 as the commission may determine as necessary for each class
11 of certification.
12 (b) As a prerequisite to taking an examination for
13 certification as an appraiser or residential appraiser, an
14 applicant shall present evidence satisfactory to the commission
15 that he possesses at least three years of full-time experience
16 in real property appraisal as a real estate broker, acquired
17 within a period of five years immediately preceding the filing
18 of the application for certification, and either:
19 (1) has a bachelor's degree from an accredited college
20 or university in a specialty recognized by the committee; or
21 (2) has successfully completed not less than 150
22 classroom hours of academic experience in subject related to
23 real estate appraisal, and 15 additional classroom hours
24 related to standards of professional practice.
25 Section 585. Disciplinary provisions.
26 Real estate appraisers certified by the commission shall be
27 subject to all disciplinary provisions applicable to real estate
28 brokers. In addition, the commission may refuse, suspend,
29 revoke, limit, restrict or publicly reprimand a certificate
30 holder for any of the following:
19890H1637B1942 - 6 -
1 (1) Failing to meet the minimum requirements for an
2 appraisal report as established by the commission by
3 regulation.
4 (2) Accepting an appraisal assignment where employment
5 or fee is contingent upon reporting a predetermined or
6 specified value, or is otherwise contingent upon a particular
7 finding to be reported.
8 (3) Making one's fee or compensation contingent upon an
9 award or recovery in any case where the amount of the award
10 or recovery would be affected by the appraisal.
11 (4) Basing one's fee or compensation on a percentage of
12 the final estimate of value.
13 (5) Contracting for or accepting compensation for
14 appraisal services in the form of a commission, rebate,
15 division of brokerage commissions or any other similar form.
16 (6) Accepting an appraisal assignment or rendering
17 appraisal services when the applicant or certificate holder
18 knows or should have known that his professional expertise or
19 experience with respect to the subject matter of the
20 assignment was insufficient to permit completion of the
21 assignment.
22 (7) Delegating appraisal services or activities to an
23 associate or employee, licensed or unlicensed, when the
24 certified appraiser knows or has reason to know that the
25 associate or employee is not qualified by training,
26 experience or certificate to perform the delegated service or
27 activity.
28 Section 586. Enforcement and implementation of certification
29 requirements.
30 (a) It shall be unlawful, on or after July 1, 1991, for any
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1 person to hold himself out as or use the title of a certified
2 real estate appraiser unless that person is a licensed real
3 estate broker who has also been certified by the commission to
4 perform real estate appraisals.
5 (b) The commission may promulgate regulations to implement
6 this subchapter, provided that the commission shall immediately
7 initiate the repeal or amendment of regulations which are
8 inconsistent with the provisions of this subchapter.
9 (c) The requirements for certification shall not become
10 effective until July 1, 1991, provided that the board shall
11 initiate review of applications for certification within 60 days
12 of the effective of this subchapter.
13 Section 4. This act shall take effect in 60 days.
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