|
     |
NEW JERSEY
REGISTER
Proposed New Rule: N.J.A.C. 13:40A-7.9 Authorized By: State Board of Real Estate Appraisers, Dr. James Hsu, Executive Director. Authority:
N.J.S.A. 45:14F-8. Submit written comments by May 16, 2003 to: Dr. James Hsu, Executive Director State Board of Real Estate Appraisers
PO Box 45032 The agency proposal follows: Summary Pursuant to its rulemaking authority set forth in N.J.S.A. 45:14F-8, the State Board of Real Estate Appraisers (the Board) is proposing a new rule regarding real estate appraisers whose licenses or certification have been suspended or revoked by the State of New Jersey, or voluntarily surrendered to the Board, which surrenders were to have been deemed revocations. The rule also sets forth those disciplinary actions by the Department of Housing and Urban Development (HUD) which may trigger disciplinary action on the part of the Board pursuant to N.J.S.A. 45:1-21(e) and (g). The purpose of this rule is to help ensure that appraisers who have been subjected to suspension, revocation, or voluntary surrender of their licenses or certificates, and are prohibited from engaging in real estate appraising, cannot evade the sanction by undertaking to perform certain tasks involved in the appraisal process for appraisers who are in good standing with the Board, who sign and take responsibility for appraisal process, thereby evading the measure of discipline intended. The rule is also designed to prevent appraisers who are in good standing from aiding or abetting continued practice or employing, in any capacity, appraisers who are subject to suspension, revocation or voluntary surrender of license or certification. A further purpose of the rule is to clarify the specific HUD actions that trigger disciplinary action pursuant to N.J.S.A. 45:1-21(g), as well as to define such actions, when imposed for reasons consistent with N.J.S.A. 45:1-21, as constituting professional misconduct pursuant to N.J.S.A. 45:1-21(e). The Division has determined that the comment period for this proposal shall be 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this proposal is excepted from the rulemaking calendar requirement. Social Impact Proposed new rule N.J.A.C. 13:40A-7.9 will have a positive impact on the welfare of consumers by making it less likely that appraisers who have been suspended or revoked by the Board, or who have voluntarily surrendered their licenses or certificates for disciplinary reasons, will evade the sanction imposed upon them. It also facilitates the imposition of appropriate discipline upon licensees or certificate holders who are in good standing but aid or abet continued practice, employ or provide payment for services, in any manner, a suspended or revoked real estate appraiser. By so doing, the rule will have a deterrent effect upon appraisers who will thereby be encouraged to avoid lax or misleading appraisal practices, and will, therefore, indirectly serve to promote competence and good conduct among the real estate appraisers practicing in the State of New Jersey. It will further facilitate the efficient disposition of matters involving real estate appraisers subject to action by HUD, which were based on findings that would provide grounds for discipline in New Jersey. Economic Impact Proposed new rule N.J.A.C. 13:40A-7.9 will have some economic impact upon licensees who have been sanctioned, as well as those who might have otherwise employed them. The proposed new rule will have an economic impact upon licensees or certificate holders who have been sanctioned because the rule prohibits these appraisers from performing certain tasks involved in the appraisal process for those appraisers who are in good standing with the Board. In addition, the proposed new rule will have an economic impact upon appraisers who are in good standing and who employ appraisers who have been sanctioned by the Board because the proposed new rule will subject the good standing appraisers to professional misconduct sanctions. However, such costs incurred by real estate appraisers who have been sanctioned are outweighed by the benefits of protecting the public from unscrupulous real estate appraising practices. Federal Standards Statement The Appraisal Standards Board of the Appraisal Foundation is authorized pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 to promulgate the Uniform Standards of Professional Appraisal Practice (the USPAP), which are the standards applicable to appraisal reports used in Federally related transactions. Pursuant to N.J.A.C. 13:40A-6.1, the USPAP are the standards to which New Jersey appraisers must conform. Although the USPAP may thus be viewed as a Federal standard, there is no enforcement mechanism in the USPAP. It is left to the state real estate appraiser boards to provide a system whereby standards are enforced, pursuant to the laws of the individual states. Although the Appraisal Subcommittee of the Federal Financial Institutions Examination Council (ASC) monitors the state boards as well as the Appraisal Foundation, the ASC itself has no independent enforcement authority. Thus, the proposed new rule deals with the manner in which standards may be enforced by the State Board, that is, disciplinary action and the manner in which it is implemented, is dictated by State statute and is not subject to Federal requirements or standards, other than Federal constitutional standards with regard to due process. Jobs Impact Proposed new rule N.J.A.C. 13:40A-7.9 may impact jobs to the extent that the proposed new rule will preclude real estate appraisers who have had their licenses or certificates suspended or revoked, or who have voluntarily surrendered their licenses or certificates for disciplinary reasons, from nonetheless engaging in real estate appraising through technical subterfuge and evasion. Inasmuch as only a small percentage of the Board's licensees or certificate holders commit misconduct sufficiently egregious to merit suspension, revocation, and voluntary surrender, any deleterious effect upon employment from this rule would be minuscule. Similarly, inasmuch as only a small percentage of the Board's licensees or certificate holders are subject to disciplinary action by HUD, the provision relating to HUD actions should affect only a very few licensees or certificate holders. Agriculture Industry Impact The Board believes this proposed new rule will have no impact upon the agriculture industry in New Jersey. Regulatory Flexibility Analysis If, for the purposes of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. (the Act), any of the approximately 2,321 real estate appraisers licensed or certified by the Board are deemed "small businesses," then the following analysis applies. The Act requires the Board to set forth the reporting, recordkeeping and other compliance requirements of the proposed new rule, including the kinds of professional services likely to be needed to comply with the requirements. The Act further requires the Board to estimate the initial and annual compliance costs of the rule, to outline the manner in which it has designed the rule to minimize anyadverse economic impact upon small businesses and to set forth whether the rule establishes differing compliance requirements for small businesses. The proposed new rule does not impose reporting or recordkeeping requirements upon licensees or certificate holders. It does, however, impose compliance requirements. Pursuant to N.J.A.C. 13:40A-7.9(c), the proposed new rule sets forth that any licensed or certified appraiser who is under active disciplinary suspension or whose license or certification has been revoked must cease and desist from engaging in the practice of real estate appraising in all respects and must refrain from engaging in any work or activities in connection with any appraisal assignment for real estate located in New Jersey. In addition, the new rule proposes that no suspended or revoked licensee or certificate holder shall charge, receive or share in any fee for professional services rendered by him or herself or others while barred from engaging in real estate appraising. N.J.A.C. 13:40A-7.9(d) also imposes compliance requirements upon real estate appraisers since the proposed new rule prohibits any licensed or certified real estate appraiser from assisting a suspended or revoked real estate appraiser in the performance of steps in the valuation process or employing or providing payment for services in any manner rendered by any suspended or revoked real estate appraiser. Licensees will be required to exercise due diligence in ascertaining whether newly hired employees are currently prohibited from performing the steps of the appraisal process. The Board believes the proposed new rule to be the minimum necessary in order to ensure that appraisers who have been subjected to suspension, revocation, or voluntary surrender of their licenses or certificates, and are prohibited from engaging in real estate appraising, cannot evade the sanction by undertaking to perform certain tasks involved in the appraisal process for appraisers who are in good standing with the Board, who sign and take responsibility for appraisal process, thereby evading the measure of discipline intended. In addition, the proposed new rule is also designed to prevent appraisers who are in good standing from aiding or abetting continued practice or employing, in any capacity, appraisers who are subject to suspension, revocation or voluntary surrender of license or certification. No additional professional services will be needed to comply with the proposed new rule. Smart Growth Impact The Board does not believe that the proposed new rule will have any impact upon the achievement of smart growth or upon the implementation of the State Development and Redevelopment Plan. Full text of the proposed new rule follows: << NJ ADC 13:40A-7.9 >> <<+13:40A-7.9 Disciplined licensees or certificate holders; prohibited activities+>> <<+(a) When used in this section, "steps of the valuation process" means any and all work performed by or at the direction of an individual including, but not limited to, the gathering of any data from which to extract information and market trends, the analysis of data, such as sales, cost, and income data pertaining to a property being appraised, and the reconciliation of the data to form a value conclusion.+>> <<+(b) No later than the effective date of a suspension, revocation or voluntary surrender, any suspended or revoked licensee or certificate holder, or any licensee or certificate holder who has agreed to a voluntary surrender of his or her license or certificate, to be deemed a revocation, shall immediately forward the original license or certification to the Board office located at Post Office Box 45032, 124 Halsey Street, Third Floor, Newark, New Jersey 07101. With respect to suspensions of a finite term, at the conclusion of the term, the licensee or certificate holder may contact the Board office for the return of the documents previously surrendered to the Board.+>> <<+(c) Any licensed or certified appraiser who is under active disciplinary suspension pursuant to a Board order or consent agreement, or whose license or certification has been revoked or surrendered, shall cease and desist from engaging in the practice of real estate appraising in all respects, and shall refrain from engaging in any work or activities, including any of the steps of the valuation process, in connection with any appraisal assignment for real estate located in the State of New Jersey. No suspended or revoked licensee or certificate holder shall charge, receive or share in any fee for professional services rendered by himself or herself or others while barred from engaging in real estate appraising. The licensee may be compensated for the reasonable value of services lawfully rendered and disbursements incurred prior to the effective date of the Board action. Failure to comply with this provision shall be deemed professional misconduct.+>> <<+(d) Any New Jersey licensed or certified real estate appraiser who assists a suspended or revoked real estate appraiser in the performance of steps in the valuation process or employs or provides payment for services in any capacity rendered by any suspended or revoked real estate appraiser, whether payment is made to the appraiser as an employee or as an independent contractor, shall be deemed to have aided and abetted unlicensed or uncertified practice pursuant to N.J.S.A. 45:1-21(n), and to have engaged in professional misconduct pursuant to N.J.S.A. 45:1-21(e).+>> <<+(e) Any payment made to or received by a suspended or revoked licensee or certificate holder by any New Jersey licensed or certified real estate appraiser will be presumed to be related to the practice of real estate appraising, unless the licensee or certificate holder or suspended or revoked licensee or certificate holder can affirmatively demonstrate by clear and convincing evidence that the moneys were unrelated to the practice of real estate appraising.+>> <<+(f) Any Board licensee or certificate holder who has been subject to any of the following actions by the Department of Housing and Urban Development (HUD) shall be deemed to have engaged in professional misconduct pursuant to N.J.S.A. 45:1-21(e), as well as pursuant to N.J.S.A. 45:1-21(g): a debarment, a limited denial of participation, a suspension, as defined by 24 C.F.R. ß 24.105; or a removal from the HUD's FHA Appraiser Roster pursuant to 24 C.F.R. 200.204, and accordingly, may be subject to sanction pursuant to N.J.S.A. 45:1-21 or N.J.S.A. 45:1-22.+>> |
 |