Colorado

Reviewer Requirements

Scope of Law

  • No specific distinction between residential and commercial real estate

 

  • CO HB 12-1110 Section 2, 12-61-702-1:

(1) “Appraisal”, “appraisal report”, or “real estate appraisal” means

a written OR ORAL analysis, opinion, or conclusion relating to the nature,

quality, value, or utility of specified interests in, or aspects of, identified real

estate Such THAT IS TRANSMITTED TO THE CLIENT UPON THE COMPLETION OF

AN ASSIGNMENT. THESE terms include a valuation, which is an opinion of

the value of real estate, and an analysis, which is a general study of real

estate not specifically performed only to determine value; except that such

THE terms include any A valuation completed by any AN appraiser employee

of a county assessor as defined in section 39-1-102 (2), C.R.S. Such THE

terms do not include an analysis, valuation, opinion, conclusion, notation,

or compilation of data by an officer, director, or regular salaried employee

of a financial institution or its affiliate, made for internal use only by the

said financial institution or affiliate, concerning an interest in real estate that

is owned or held as collateral by the said financial institution or affiliate

which AND THAT is not represented or deemed to be an appraisal except to

the said financial institution, the agencies regulating the said financial

institution, and any secondary markets that purchase real estate secured

loans. Any such AN appraisal prepared by an officer, director, or regular

salaried employee of said A financial institution who is not registered,

licensed, or certified under this part 7 shall contain a written notice that the

preparer is not registered, licensed, or certified as an appraiser under this

part 7.

 

 

Reviewing Provisions

  • Must conduct internal quality control reviews to assure compliance with USPAP

 

  • CO HB 12-1110 Section 10, 12-61-710.5-g:

12-61-710.5. Appraisal management companies – prohibited activities – grounds for disciplinary actions – procedures….

 

(g) FAILING TO VALIDATE OR VERIFY THAT THE WORK COMPLETED

BY AN APPRAISER WHO IS HIRED OR ENGAGED BY THE APPRAISAL

MANAGEMENT COMPANY COMPLIES WITH STATE AND FEDERAL

REGULATIONS, INCLUDING THE UNIFORM STANDARDS OF PROFESSIONAL

APPRAISAL PRACTICE, BY CONDUCTING AN ANNUAL AUDIT OF A RANDOM SAMPLE OF THE APPRAISALS RECEIVED WITHIN THE PREVIOUS YEAR BY THE APPRAISAL MANAGEMENT COMPANY. THE BOARD SHALL ESTABLISH ANNUAL APPRAISAL REVIEW REQUIREMENTS BY RULE AND SHALL SOLICIT AND CONSIDER INFORMATION AND COMMENTS FROM INTERESTED PERSONS.

 

Appraiser Requirements

  • Must exercise “due diligence” when hiring appraisers

 

  • CO HB 12-1110 Section 10, 12-61-712.5-a:

Appraisal management companies – prohibited activities – grounds for disciplinary actions – procedures.

 

(a) FAILING TO EXERCISE DUE DILIGENCE WHEN HIRING OR ENGAGING

A REAL ESTATE APPRAISER TO ENSURE THAT THE REAL ESTATE APPRAISER IS

APPROPRIATELY CREDENTIALED BY THE BOARD AND COMPETENT TO

PERFORM THE ASSIGNMENT;

 

Appraiser Competency

Record Keeping

  • Must keep records for 5 years/ 2 years after any legal proceedings

 

  • CO HB 12-1110 Section 10, 12-61-712.5-l:

Appraisal management companies – prohibited activities – grounds for disciplinary actions – procedures.

 

(l) FAILING TO MAINTAIN POSSESSION OF, FOR FUTURE USE OR

INSPECTION BY THE BOARD, FOR A PERIOD OF AT LEAST FIVE YEARS OR AT

LEAST TWO YEARS AFTER FINAL DISPOSITION OF ANY JUDICIAL PROCEEDING

IN WHICH A REPRESENTATIVE OF THE APPRAISAL MANAGEMENT COMPANY

PROVIDED TESTIMONY RELATED TO THE ASSIGNMENT, WHICHEVER PERIOD

EXPIRES LAST, THE DOCUMENTS OR RECORDS PRESCRIBED BY THE RULES OF

THE BOARD OR TO PRODUCE SUCH DOCUMENTS OR RECORDS UPON

REASONABLE REQUEST BY THE BOARD;

 

Licensing Disclosure

Communications With Appraisers

  • Must disclose identity of client to appraiser

 

  • CO HB 12-1110 Section 10, 12-61-712.5-j:

Appraisal management companies – prohibited activities – grounds for disciplinary actions – procedures.

 

(j) FAILING TO DISCLOSE TO AN APPRAISER, AT THE TIME OF

ENGAGEMENT, THE IDENTITY OF THE CLIENT;

 

Communication With Board

  • Mandatory reporting clause

 

  • CO HB 12-1110 Section 10, 12-61-710.5-6:

(6) A REGISTRANT, LICENSEE, OR CERTIFIED PERSON HAVING DIRECT

KNOWLEDGE THAT A PERSON OR LICENSED PARTNERSHIP, LIMITED LIABILITY

COMPANY, OR CORPORATION HAS VIOLATED THIS PART 7 SHALL REPORT

SUCH KNOWLEDGE TO THE BOARD.

 

Billing/ Payment

  • Must pay appraisers within 60 days

 

  • CO HB 12-1110 Section 10, 12-61-712.5-h:

Appraisal management companies – prohibited activities – grounds for disciplinary actions – procedures…

 

(h) FAILING TO MAKE PAYMENT TO AN APPRAISER WITHIN SIXTY

DAYS AFTER COMPLETION OF THE APPRAISAL, UNLESS OTHERWISE AGREED

OR UNLESS THE APPRAISER HAS BEEN NOTIFIED IN WRITING THAT A BONA

FIDE DISPUTE EXISTS REGARDING THE PERFORMANCE OR QUALITY OF THE

APPRAISAL;

 

  • Must disclose to client the fee paid to appraiser

 

  • CO HB 12-1110 Section 10, 12-61-712.5-r:

Appraisal management companies – prohibited activities – grounds for disciplinary actions – procedures…

 

(r) FAILING TO DISCLOSE TO A CLIENT THE FEE AMOUNT PAID TO THE

APPRAISER HIRED OR ENGAGED TO COMPLETE THE APPRAISAL UPON

COMPLETION OF THE ASSIGNMENT; OR

 

Employee Training

Removal of Appraisers from Panel

Misc

  • Errors and Omissions insurance required

 

  • CO HB 12-1110 Section 6, 12-61-706.5-1:

12-61-706.5. Errors and omissions insurance – duties of the

division – certificate of coverage – group plan made available – rules.

(1) EVERY LICENSEE UNDER THIS PART 7, EXCEPT AN APPRAISER WHO IS

EMPLOYED BY A STATE OR LOCAL GOVERNMENTAL ENTITY OR AN INACTIVE

APPRAISER OR APPRAISAL MANAGEMENT COMPANY, SHALL MAINTAIN

ERRORS AND OMISSIONS INSURANCE TO COVER ALL ACTIVITIES

CONTEMPLATED UNDER THIS PART 7. THE DIVISION SHALL MAKE THE ERRORS

AND OMISSIONS INSURANCE AVAILABLE TO ALL LICENSEES BY CONTRACTING

WITH AN INSURER FOR A GROUP POLICY AFTER A COMPETITIVE BID PROCESS

IN ACCORDANCE WITH ARTICLE 103 OF TITLE 24, C.R.S. A GROUP POLICY

OBTAINED BY THE DIVISION SHALL BE AVAILABLE TO ALL LICENSEES WITH NO

RIGHT ON THE PART OF THE INSURER TO CANCEL ANY LICENSEE. A LICENSEE

MAY OBTAIN ERRORS AND OMISSIONS INSURANCE INDEPENDENTLY IF THE

COVERAGE COMPLIES WITH THE MINIMUM REQUIREMENTS ESTABLISHED BY

THE DIVISION.

  • CO HB 12-1110 Section 14, 12-61-103.6:

12-61-103.6. Errors and omissions insurance required – rules.

(1) Every licensee under this part 1, except an inactive broker or an

attorney licensee who maintains a policy of professional malpractice

insurance that provides coverage for errors and omissions for their activities

as a licensee under this part 1, shall maintain errors and omissions insurance

to cover all activities contemplated under parts 1 to 8 of this article. The commission DIVISION OF REAL ESTATE shall make the errors and omissions

insurance available to all licensees by contracting with an insurer for a

group policy after a competitive bid process in accordance with article 103

of title 24, C.R.S. Any A group policy obtained by the commission shall

DIVISION OF REAL ESTATE MUST be available to all licensees with no right

on the part of the insurer to cancel any A licensee. Any A licensee may

obtain errors and omissions insurance independently if the coverage

complies with the minimum requirements established by the commission

DIVISION OF REAL ESTATE.

  • We must get it on our own if division doesn’t provide it

 

  • CO HB 12-1110 Section 6, 12-61-706.5-2(a):

(2) (a) IF THE DIVISION IS UNABLE TO OBTAIN ERRORS AND OMISSIONS

INSURANCE COVERAGE TO INSURE ALL LICENSEES WHO CHOOSE TO

PARTICIPATE IN THE GROUP PROGRAM AT A REASONABLE ANNUAL PREMIUM,

AS DETERMINED BY THE DIVISION, A LICENSEE SHALL INDEPENDENTLY OBTAIN THE ERRORS AND OMISSIONS INSURANCE REQUIRED BY THIS SECTION.

  • CO HB 12-110, Section 14, 12-61-103.6-2(a):

(2) (a) If the commission DIVISION OF REAL ESTATE is unable to

obtain errors and omissions insurance coverage to insure all licensees who

choose to participate in the group program at a reasonable annual premium,

as determined by the commission DIVISION OF REAL ESTATE, a licensee shall

independently obtain the errors and omissions insurance required by this

section.

  • Must file certificate of coverage of E&O insurance with board annually

 

  • CO HB 12-1110 Section 6, 12-61-706.5-3:

(3) THE DIVISION SHALL DETERMINE THE TERMS AND CONDITIONS OF

COVERAGE REQUIRED UNDER THIS SECTION BASED ON RULES PROMULGATED

BY THE BOARD. EACH LICENSEE SHALL BE NOTIFIED OF THE REQUIRED TERMS

AND CONDITIONS AT LEAST THIRTY DAYS BEFORE THE ANNUAL PREMIUM

RENEWAL DATE AS DETERMINED BY THE DIVISION. EACH LICENSEE SHALL

FILE A CERTIFICATE OF COVERAGE SHOWING COMPLIANCE WITH THE

REQUIRED TERMS AND CONDITIONS WITH THE DIVISION BY THE ANNUAL

PREMIUM RENEWAL DATE, AS DETERMINED BY THE DIVISION.

  • CO HB 12-110 Section 14, 12-61-103.6-3:

(3) The commission DIVISION OF REAL ESTATE shall determine the

terms and conditions of coverage required under this section including the

minimum limits of coverage, the permissible deductible, and permissible

exemptions BASED ON RULES PROMULGATED BY THE COMMISSION. THE

COMMISSION SHALL NOTIFY each licensee shall be notified of the required

terms and conditions at least thirty days prior to BEFORE the annual premium

renewal date as determined by the commission. Each licensee shall file a

certificate of coverage showing compliance with the required terms and

conditions with the commission by the annual premium renewal date, as

determined by the commission DIVISION OF REAL ESTATE.

  • Can’t violate CO Consumer Protection Act Title 6, Article 1:

(2) Disclosure of breach.

(a) An individual or a commercial entity that conducts business in Colorado and

that owns or licenses computerized data that includes personal information about

a resident of Colorado shall, when it becomes aware of a breach of the security of

the system, conduct in good faith a prompt investigation to determine the

likelihood that personal information has been or will be misused. The individual

or the commercial entity shall give notice as soon as possible to the affected

Colorado resident unless the investigation determines that the misuse of

information about a Colorado resident has not occurred and is not reasonably

likely to occur. Notice shall be made in the most expedient time possible and

without unreasonable delay, consistent with the legitimate needs of law

enforcement and consistent with any measures necessary to determine the scope

of the breach and to restore the reasonable integrity of the computerized data

system.

 

(b) An individual or a commercial entity that maintains computerized data that

includes personal information that the individual or the commercial entity does

not own or license shall give notice to and cooperate with the owner or licensee of

the information of any breach of the security of the system immediately following

discovery of a breach, if misuse of personal information about a Colorado resident

occurred or is likely to occur. Cooperation includes sharing with the owner or

licensee information relevant to the breach; except that such cooperation shall not

be deemed to require the disclosure of confidential business information or trade

secrets.

 

(c) Notice required by this section may be delayed if a law enforcement agency

determines that the notice will impede a criminal investigation and the law

enforcement agency has notified the individual or commercial entity that conducts

business in Colorado not to send notice required by this section. Notice required

by this section shall be made in good faith, without unreasonable delay, and as

soon as possible after the law enforcement agency determines that notification

will no longer impede the investigation and has notified the individual or

commercial entity that conducts business in Colorado that it is appropriate to send

the notice required by this section.

 

(d) If an individual or commercial entity is required to notify more than one

thousand Colorado residents of a breach of the security of the system pursuant to

this section, the individual or commercial entity shall also notify, without

unreasonable delay, all consumer reporting agencies that compile and maintain

files on consumers on a nationwide basis, as defined by 15 U.S.C. sec. 1618a (p),

of the anticipated date of the notification to the residents and the approximate

number of residents who are to be notified. Nothing in this paragraph (d) shall be

construed to require the individual or commercial entity to provide to the

consumer reporting agency the names or other personal information of breach

notice recipients. This paragraph (d) shall not apply to a person who is subject to

title V of the federal “Gramm-Leach-Bliley Act”, 15 U.S.C. sec. 6801 et seq.

 

(3) Procedures deemed in compliance with notice requirements.

(a) Under this section, an individual or a commercial entity that maintains its own

notification procedures as part of an information security policy for the treatment

of personal information and whose procedures are otherwise consistent with the

timing requirements of this section shall be deemed to be in compliance with the

notice requirements of this section if the individual or the commercial entity

notifies affected Colorado customers in accordance with its policies in the event

of a breach of security of the system.

 

(b) An individual or a commercial entity that is regulated by state or federal law

and that maintains procedures for a breach of the security of the system pursuant

to the laws, rules, regulations, guidances, or guidelines established by its primary

or functional state or federal regulator is deemed to be in compliance with this

section.

 

(4) Violations. The attorney general may bring an action in law or equity to address

violations of this section and for other relief that may be appropriate to ensure

compliance with this section or to recover direct economic damages resulting from a

violation, or both. The provisions of this section are not exclusive and do not relieve an

individual or a commercial entity subject to this section from compliance with all other

applicable provisions of law.