NEW RULES PROPOSED

The North Carolina Real Estate Commission, pursuant to authority vested in it by the General Statutes of North Carolina, proposes to adopt and amend certain rules contained in Title 21, Chapter 58 of the North Carolina Administrative Code, to be effective May 1, 1990.

The following is a summary of some of the major provisions of the proposed rules. Copies containing the complete text of all proposed rules will be available at the hearing or can be obtained from the Commission office prior to the hearing.

REAL ESTATE BROKERS
AND SALESMEN

The Commission proposes to amend Rule A .0106 to permit brokers and salesmen to furnish property owners periodic reports concerning the status of their property rather than providing the owners a copy of each lease or rental agreement. The reports must be furnished within 45 days following execution of the lease or rental agreement, and authorization to furnish the reports in lieu of the leases or rental agreements is subject to several terms and conditions.

The Commission proposes to amend Rule A .0107(h) to permit brokers to transfer earnest money deposits to closing attorneys within 10 days prior to settlement.

The Commission proposes to amend Rule A .0502 to require principal brokers of real estate brokerage corporations to designate and assure that there is at all times a broker-in-charge for each office of the corporation, and to perform certain other administrative duties on behalf of the corporate broker.

REAL ESTATE AND
APPRAISAL EDUCATION

Schools

The Commission proposes to amend those rules regarding the approval of schools (other than private real estate schools) to conduct real estate pre-licensing courses so that the rules will also apply to appraiser prelicensing and pre-certification courses.

The Commission proposes to amend that rule governing the use of examination performance data to require schools to state that the data was provided by the Real Estate Commission.

The Commission proposes to amend those rules regarding the licensure of private real estate schools to conduct real estate prelicensing courses so that the rules will also apply to private schools offering appraiser pre-licensing and pre-certification courses.

The Commission proposes to amend those rules which establish the application and renewal fees for private real estate school licenses to reduce the application fee for an original private real estate school license to X200 (now $250) per school location but charge a fee of X40 for the approval of each course; and to charge a fee of $20 for the annual renewal of each course in addition to the X100 license renewal fee for the school.

The Commission proposes to amend that rule governing the use of examination performance data by private real estate schools to require the school to state that~the data was provided by the Real Estate Commission.

The Commission proposes to amend those rules establishing minimum standards for real estate pre-licensing courses so that the rules will also apply to appraiser pre-licensing and pre-certification courses.

The Commission proposes to amend that rule regarding program structuring to require the completion of minimum 30 classroom hour courses in "Introduction to Real Estate Appraisal," "Valuation Principles and Procedures," and "Applied Residential Property Valuation" as a prerequisite to sitting for the pre-licensing (residential appraiser) examination; and the completion of additional minimum 30 classroom hour courses in "Introduction to Income Property Appraisal," "Advanced Income Capitalization Procedures," and "Applied Income Property Valuation" as a prerequisite to sitting for the precertification (general appraiser) examination. All courses must be taken sequentially in the order listed.

The Commission proposes to adopt a rule requiring, as a prerequisite to the approval of appraiser pre-licensing and pre-certification courses, that instructors of pre-licensing (residential appraiser) courses have completed at least 90 classroom hours of real estate appraisal education and two years' full-time experience as a residential real estate appraiser within the previous three years; and that instructors of pre-certification (general appraiser) courses have completed at least 180 classroom hours of appraisal education and five years' full-time experience as a general real estate appraiser within the previous seven years, of which at least 50% of such experience must be in income property appraising.

The Commission proposes to adopt rules establishing procedures by which appraisal trade organizations may seek recognition of their courses as being equivalent to Commission-approved appraisal courses, including the assessment of a X250 fee to evaluate each course for recognition purposes and a X125 annual fee for renewal of such recognition.

The Commission proposes to adopt rules setting forth criteria for recognition of appraisal trade organization courses which are generally the same as for appraisal pre-licensing and pre-certification courses except that (1) the organization must also have satisfactory policies relating to classroom facilities course cancellation and tuition refund, and (2) the organizations are not subject to the program structuring and course scheduling restrictions that are applicable to approved schools. Such organizations may advertise that such courses are "recognized" as being equivalent to Commission-approved courses, but are prohibited from referring to such courses as being "approved" pre-licensing or pre-certification courses.

REAL ESTATE APPRAISERS

Application for Appraiser
License or Certificate

The Commission proposes to adopt rules prescribing the form for use in applying for an appraiser license or certificate, and establishing a X100 fee for applying for an appraiser license or certificate which shall include one examination.

The Commission proposes to adopt rules regarding the licensing and certification of real estate appraisers which shall require State-licensed and State-certified appraisers to renew their licenses and certificates on an annual basis by the filing of the prescribed form, payment of a $75 renewal fee, and completion of at least 10 classroom hours of Commission-approved instruction during the previous year.

Persons may reinstate their expired licenses and certificates within 12 months following expiration by making application and paying a late filing fee of $10 per month for each month that the license or certificate is lapsed; however, if the license or certificate is expired for more than 12 months, then the person must file a new application and fee, pay the accrued $120 late fee, and complete continuing education equivalent to that which would have been required had the license been continually renewed, in order to apply for reinstatement of the appraiser license or certificate.

The Commission proposes to adopt a rule permitting State-licensed and State-certified real estate appraisers to place their licenses and certificates on Inactive Status; however, to renew a license or certificate which is on Inactive Status, the regular renewal fee must be paid, and the licensee or certificate holder must satisfy all continuing education requirements each year.

The Commission proposes to adopt rules regarding appraiser examinations including the time and place of examinations, re-examinations, conduct at the examinations, and related matters. Such proposed rules also provide for the review of examinations by persons who fail their examinations, and generally describe the content of appraiser examinations as follows:

State-licensed (residential appraiser) examinations will test applicants on: basic real property law; concepts of value; forces affecting real estate values; residential real estate financing; residential construction and design; the appraisal process; valuation principles and procedures; application of valuation principles and procedures to the valuation of various types of residential properties and to related appraisal assignments; standards of appraisal practice; the North Carolina Real Estate Appraisers Act and related Commission rules; and related subject areas.

State-certified (general appraiser) examinations will test applicants on the subject areas listed in the previous paragraph and the additional areas of: income capitalization principles and procedures; application of valuation principles and procedures to the valuatR~n of all types of income-producing and other properties and to related appraisal assignments; and related subject areas.

The Commission proposes to adopt rules governing the practice of State-licensed and State-certified real estate appraisers, including the requirement that State-licensed real estate appraisers identify themselves in advertising and otherwise as "State-licensed residential real estate appraisers," and State certified appraisers identify themselves as either "State-certified general real estate appraisers" or "State-certified residential/general real estate appraisers."

The Commission proposes to adopt rules regarding lose of the term "certified" when referring to appraisals performed by State certified appraisers, and requiring that all written appraisal reports prepared by State licensed or State-certified real estate appraisers bear the signature, seal, and license or certification status of the appraiser, and identify any other person(s) who assist in the appraisal process (other than by providing clerical assistance).

The Commission proposes to adopt a rule requiring each appraisal firm or combined brokerage/appraisal firm with two or more State-licensed or State-certified appraisers or any unlicensed or uncertified assistants to designate a "managing appraiser" to perform certain administrative functions and to maintain a record of the activities of the unlicensed or uncertified assistants and the activities of any State-licensed appraiser who assists a State-certified appraiser in performing an appraisal.

The Commission proposes to adopt rules requiring State-licensed or State-certified appraisers to actively and personally supervise unlicensed and uncertified assistants and requiring State-certified appraisers to supervise State-licensed appraisers who assist in performing appraisals. Such supervision is to include preparing and furnishing the managing appraiser and the person being supervised a report describing the nature and extent of assistance rendered.

The Commission proposes to adopt a rule requiring State-licensed and State-certified real estate appraisers to comply with Standards 1 and 2 of the Appraisal Foundation's "Uniform Standards of Professional Appraisal Practice" when performing real estate appraisals.