(1) The board may determine whether an applicant for licensure or certification possesses the necessary qualifications for licensure or certification required by this part 6. The board may consider such qualities as the applicant's fitness and prior professional licensure and whether the applicant has been convicted of a crime. As used in this subsection (1), applicant includes any individual who owns, in whole or in part, directly or indirectly, an appraisal management company and any appraiser designated as a controlling appraiser by a partnership, limited liability company, or corporation acting as an appraisal management company.
(2) If the board determines that an applicant does not possess the applicable qualifications required by this part 6, or the applicant has violated this part 6, rules promulgated by the board, or any board order, the board may deny the applicant a license or certificate or deny the renewal or reinstatement of a license or certificate pursuant to section 12-10-610, and, in such instance, the board shall provide the applicant with a statement in writing setting forth the basis of the board's determination that the applicant does not possess the qualifications or professional competence required by this part 6. The applicant may request a hearing on the determination as provided in section 24-4-104 (9).
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 676, � 1, effective October 1.
Editor's note: This section is similar to former � 12-61-712 as it existed prior to 2019.
12-10-613. Prohibited activities - grounds for disciplinary actions - procedures. (1) A real estate appraiser is in violation of this part 6 if the appraiser:
(a) Has been convicted of a felony or has had accepted by a court a plea of guilty or nolo contendere to a felony if the felony is related to the ability to act as a real property appraiser. A certified copy of the judgment of a court of competent jurisdiction of the conviction or plea is conclusive evidence of the conviction or plea. In considering the disciplinary action, the board shall be governed by the provisions of section 24-5-101.
(b) Has violated, or attempted to violate, directly or indirectly, or assisted in or abetted the violation of, or conspired to violate this part 6, a rule promulgated pursuant to this part 6, or an order of the board issued pursuant to this part 6;
(c) Has accepted any fees, compensation, or other valuable consideration to influence the outcome of an appraisal;
(d) Has used advertising that is misleading, deceptive, or false;
(e) Has used fraud or misrepresentation in obtaining a license or certificate under this part 6;
(f) Has conducted an appraisal in a fraudulent manner or used misrepresentation in any such activity;
(g) Has acted or failed to act in a manner that does not meet the generally accepted standards of professional appraisal practice as adopted by the board by rule. A certified copy of a malpractice judgment of a court of competent jurisdiction is conclusive evidence of the act or omission, but evidence of the act or omission is not limited to a malpractice judgment.
(h) Has performed appraisal services beyond his or her level of competency;
(i) Has been subject to an adverse or disciplinary action in another state, territory, or country relating to a license, certificate, or other authorization to practice as an appraiser. A disciplinary action relating to a license or certificate as an appraiser licensed or certified under this part 6 or any related occupation in any other state, territory, or country for disciplinary reasons is prima facie evidence of grounds for disciplinary action or denial of licensure or certification by the board. This subsection (1)(i) applies only to violations based upon acts or omissions in the other state, territory, or country that are also violations of this part 6.
(j) Has failed to disclose in the appraisal report the fee paid to the appraiser for a residential real property appraisal if the appraiser was engaged by an appraisal management company to complete the assignment; or
(k) Has engaged in conduct that would be grounds for the denial of a license or certification under section 12-10-612.
(2) If an applicant, a licensee, or a certified person has violated any provision of this section, the board may deny or refuse to renew the license or certificate, or, as specified in subsections (3) and (6) of this section, revoke or suspend the license or certificate, issue a letter of admonition to a licensee or certified person, place a licensee or certified person on probation, or impose public censure.
(3) When a complaint or an investigation discloses an instance of misconduct by a licensed or certified appraiser that, in the opinion of the board, does not warrant formal action by the board but should not be dismissed as being without merit, the board may send a letter of admonition to the appraiser against whom a complaint was made. The letter must advise the appraiser of the right to make a written request, within twenty days after receipt of the letter of admonition, to the board to begin formal disciplinary proceedings as provided in this section to adjudicate the conduct or acts on which the letter was based.
(4) The board may start a proceeding for discipline of a licensee or certified person when the board has reasonable grounds to believe that a licensee or certified person has committed any act or failed to act pursuant to the grounds established in subsection (1) of this section or when a request for a hearing is timely made under subsection (3) of this section.
(5) Disciplinary proceedings shall be conducted in the manner prescribed by the State Administrative Procedure Act, article 4 of title 24.
(6) As authorized in subsection (2) of this section, disciplinary actions by the board may consist of the following:
(a) Revocation of a license or certificate. (I) Revocation of a license or certificate by the board means that the licensed or certified person shall surrender his or her license or certificate immediately to the board.
(II) Any person whose license or certificate to practice is revoked is ineligible to apply for a license or certificate issued under this part 6 until more than two years have elapsed from the date of surrender of the license or certificate. A reapplication after the two-year period is treated as a new application.
(b) Suspension of a license or certificate. Suspension of a license or certificate by the board is for a period to be determined by the board.
(c) Probationary status. The board may impose probationary status on a licensee or certified person. If the board places a licensee or certified person on probation, the board may include conditions for continued practice that the board deems appropriate to assure that the licensee or certified person is otherwise qualified to practice in accordance with generally accepted professional standards of professional appraisal practice, as specified in board rules, including any or all of the following:
(I) A requirement that the licensee or certified person take courses of training or education as needed to correct deficiencies found in the hearing;
(II) A review or supervision of his or her practice as may be necessary to determine the quality of the practice and to correct deficiencies in the practice; and
(III) The imposition of restrictions upon the nature of his or her appraisal practice to assure that he or she does not practice beyond the limits of his or her capabilities.
(d) Public censure. If, after notice and hearing, the director or the director's designee determines that the licensee or certified person has committed any of the acts specified in this section, the board may impose public censure.
(7) In addition to any other discipline imposed pursuant to this section, a person who violates this part 6 or the rules promulgated pursuant to this article 10 may be penalized by the board, upon a finding of a violation made pursuant to article 4 of title 24, by imposition of a fine of not more than one thousand dollars per violation.
(8) A person participating in good faith in making a complaint or report or participating in an investigative or administrative proceeding before the board pursuant to this article 10 is immune from any liability, civil or criminal, that otherwise might result by reason of the action.
(9) A licensee or certified person who has direct knowledge that a person has violated this part 6 shall report his or her knowledge to the board.
(10) The board, on its own motion or upon application at any time after the imposition of discipline as provided in this section, may reconsider its prior action and reinstate or restore a license or certificate, terminate probation, or reduce the severity of its prior disciplinary action. The decision of whether to take any further action or hold a hearing with respect to a prior disciplinary action rests in the sole discretion of the board.
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 676, � 1, effective October 1. L. 2022: (3) and (7) amended, (HB 22-1261), ch. 315, p. 2249, � 8, effective August 10.
Editor's note: This section is similar to former � 12-61-713 as it existed prior to 2019.
12-10-614. Appraisal management companies - prohibited activities - grounds for disciplinary actions - procedures - rules. (1) The board, upon its own motion, may, and upon a complaint submitted to the board in writing by any person, shall, investigate the activities of a licensed appraisal management company; an appraiser designated as a controlling appraiser by a partnership, limited liability company, or corporation acting as an appraisal management company; or a person or an entity that assumes to act in that capacity within the state. The board, upon finding a violation, may impose an administrative fine not to exceed two thousand five hundred dollars for each separate offense; censure a licensee; place the licensee on probation and set the terms of probation; or temporarily suspend or permanently revoke a license, when the licensee has performed, is performing, or is attempting to perform any of the following acts:
(a) Failing to:
(I) 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; and
(II) In the case of an AMC, establish and comply with processes and controls reasonably designed to ensure that the AMC conducts its appraisal management services in accordance with the requirements of the federal Truth in Lending Act, 15 U.S.C. sec. 1639e (a) to (i), and regulations adopted pursuant to that act;
(b) Requiring an appraiser to indemnify the appraisal management company against liability, damages, losses, or claims other than those arising out of the services performed by the appraiser, including performance or nonperformance of the appraiser's duties and obligations, whether as a result of negligence or willful misconduct;
(c) Influencing or attempting to influence the development, reporting, result, or review of a real estate appraisal or the engagement of an appraiser through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner. This prohibition does not prohibit an appraisal management company from requesting an appraiser to:
(I) Consider additional, appropriate property information;
(II) Provide further detail, substantiation, or explanation for the appraiser's value conclusion; or
(III) Correct errors in the appraisal report.
(d) Prohibiting an appraiser, in the completion of an appraisal service, from communicating with the client, any intended users, real estate brokers, tenants, property owners, management companies, or any other entity that the appraiser reasonably believes has information pertinent to the completion of an appraisal assignment; except that this subsection (1)(d) does not apply to communications between an appraiser and an appraisal management company's client if the client has adopted an explicit policy prohibiting the communication. If the client has adopted an explicit policy prohibiting communication by the appraiser with the client, communication by an appraiser to the client must be made in writing and submitted to the appraisal management company.
(e) Altering or modifying a completed appraisal report without the authoring appraiser's knowledge and written consent, and the consent of the intended user, except to modify the format of the report solely for transmission to the client and in a manner acceptable to the client;
(f) Requiring an appraiser to provide to the appraisal management company access to the appraiser's electronic signature;
(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.
(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;
(i) Failing to perform the terms of a written agreement with an appraiser hired or engaged to complete an appraisal assignment;
(j) Failing to disclose to an appraiser, at the time of engagement, the identity of the client;
(k) Using an appraisal report for a client other than the one originally contracted with, without the original client's written consent;
(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 the documents or records upon reasonable request by the board;
(m) Having been convicted of, or entering a plea of guilty, an Alford plea, or a plea of nolo contendere to, any misdemeanor or felony relating to the conduct of an appraisal, theft, embezzlement, bribery, fraud, misrepresentation, or deceit, or any other like crime under Colorado law, federal law, or the laws of other states. A certified copy of the judgment of a court of competent jurisdiction of the conviction or other official record indicating that a plea was entered is conclusive evidence of the conviction or plea in any hearing under this part 6.
(n) Having been the subject of an adverse or disciplinary action in another state, territory, or country relating to a license, registration, certification, or other authorization to practice as an appraisal management company. A disciplinary action relating to a registration, license, or certificate as an appraisal management company under this part 6 or any related occupation in any other state, territory, or country for disciplinary reasons is prima facie evidence of grounds for disciplinary action or denial of a license by the board. This subsection (1)(n) applies only to violations based upon acts or omissions in the other state, territory, or country that would violate this part 6 if committed in Colorado.
(o) Violating the Colorado Consumer Protection Act, article 1 of title 6;
(p) Procuring, or attempting to procure, an appraisal management company license or renewing, reinstating, or reactivating, or attempting to renew, reinstate, or reactivate, an appraisal management company license by fraud, misrepresentation, or deceit or by making a material misstatement of fact in an application for a license;
(q) Knowingly misrepresenting or making false promises through agents, advertising, or otherwise;
(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
(s) Disregarding, violating, or abetting, directly or indirectly, a violation of this part 6, a rule promulgated by the board pursuant to this part 6, or an order of the board entered pursuant to this part 6.
(2) When a complaint or an investigation discloses an instance of misconduct that, in the opinion of the board, does not warrant formal action by the board but should not be dismissed as being without merit, the board may send a letter of admonition to the licensee against whom the complaint was made. The letter must advise the licensee of the right to make a written request, within twenty days after receipt of the letter of admonition, to the board to begin formal disciplinary proceedings as provided in this section to adjudicate the conduct or acts on which the letter was based.
(3) Disciplinary proceedings must be conducted in the manner prescribed by the State Administrative Procedure Act, article 4 of title 24.
(4) If a partnership, limited liability company, or corporation operating under the license of an appraiser designated and licensed as a controlling appraiser by the partnership, limited liability company, or corporation is guilty of any act listed in subsection (1) of this section, the board may suspend or revoke the right of the partnership, limited liability company, or corporation to conduct its business under the license of the controlling appraiser, whether or not the controlling appraiser had personal knowledge of the violation and whether or not the board suspends or revokes the individual license of the controlling appraiser.
(5) This part 6 does not relieve any person from civil liability or criminal prosecution under the laws of this state.
(6) A licensee or certified person having direct knowledge that a person or licensed partnership, limited liability company, or corporation has violated this part 6 shall report his or her knowledge to the board.
(7) The board, on its own motion or upon application, at any time after the imposition of discipline as provided in this section, may reconsider its prior action and reinstate or restore a license, terminate probation, or reduce the severity of its prior disciplinary action. The decision of whether to take any further action or hold a hearing with respect to the action rests in the sole discretion of the board.
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 679, � 1, effective October 1. L. 2022: (2) amended, (HB 22-1261), ch. 315, p. 2250, � 9, effective August 10.
Editor's note: This section is similar to former � 12-61-714 as it existed prior to 2019.