No. 41350 (Amendment): Rule R162-2f. Real Estate Licensing and Practices Rules

(Amendment)

DAR File No.: 41350
Filed: 03/07/2017 04:15:10 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the proposed rule amendment is to accomplish the following: 1) add Section R162-2f-202d to clarify the procedure for designating a sales agent as a property management sales agent, to clarify when a property management sales agent may simultaneously provide both property management services and real estate sales services, and to clarify when and how the property management sales agent designation is to be removed; and 2) amend Section R162-2f-207 to clarify one means of notification a broker may use to notify an associate broker or sales agent when the broker terminates affiliation with the associate broker or sales agent.

Summary of the rule or change:

New Section R162-2f-202d allows an associate broker or a sales agent (licensee) affiliated with a dual broker through a property management company to simultaneously provide both property management services and real estate sales services when the licensee has been designated as a property management sales agent by the dual broker with whom the licensee is affiliated. The designation requires the licensee to pay a designation fee to the division. A designated licensee may simultaneously provide both types of services but only through the property management company and the real estate sales services overseen by the dual broker. If a designated licensee later determines to affiliate with a principal broker who is not a dual broker or with a dual broker who does not approve of the property management sales agent designation, the licensee shall pay an additional fee to the division to remove the designation. In Section R162-2f-207, the amendment allows a principal broker to notify an associate broker or sales agent (licensee) who is unavailable to sign or electronically affirm a change form that the broker has terminated the broker's affiliation with the licensee by sending the licensee an email through the Real Estate Licensing and Management System (RELMS). When notifying the licensee by an email through RELMS, the termination of affiliation is effective 10 days after the date that the email was sent.

Statutory or constitutional authorization for this rule:

• Section 61-2f-206
• Section 61-2f-103

Anticipated cost or savings to:

the state budget:

The division has the staff and budget in place to administer this proposed amendment. Staff time spent documenting and recording the designation will be offset by the one-time designation fee. It is not expected that the proposed amendment will have a significant effect on those resources or result in any additional cost or savings to the state budget.

local governments:

Local governments are not required to comply with or enforce the Real Estate Licensing and Practices rules. No fiscal impact to local government is expected from the proposed amendment.

small businesses:

The proposed amendment does not create new obligations for small businesses nor does it increase the cost associated with any existing obligation. No fiscal impact to small business is expected from the proposed amendment.

persons other than small businesses, businesses, or local governmental entities:

The proposed amendment does not create new obligations for persons other than small businesses, businesses, or local government entities nor does it increase the cost associated with any existing obligation. No fiscal impact to persons other than small businesses, businesses, or local government entities is expected from the proposed amendment.

Compliance costs for affected persons:

The proposed rule amendment will allow a real estate sales agent who is affiliated with a dual broker through a property management company to be compensated for real estate sales services in addition to compensation received for property management services. There will be a one-time designation fee required of the sales agent. The amount of the fee has not been established but is expected to be $50 or less.

Comments by the department head on the fiscal impact the rule may have on businesses:

The purposes of the new Section R162-2f-202d are to clarify the procedure for designating a sales agent as a property management sales agent, to clarify when a property management sales agent may simultaneously provide both property management services and real estate sales services, and to clarify when and how the property management sales agent designation is to be removed. The purpose of the amendment to Section R162-2f-201 is to clarify an additional means of notification that a broker may use to notify an associate broker or sales agent when the broker terminates affiliation with the associate broker or sales agent. No fiscal impact to small business will result from these rule changes.

Francine A. Giani, Executive Director, Commerce

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Commerce
Real Estate
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Justin Barney at the above address, by phone at 801-530-6603, by FAX at , or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/01/2017

This rule may become effective on:

05/08/2017

Authorized by:

Jonathan Stewart, Director

RULE TEXT

R162. Commerce, Real Estate.

R162-2f. Real Estate Licensing and Practices Rules.

R162-2f-202d. Property Management Sales Agent Licensing Fees and Procedures.

(1) A sales agent affiliated with a dual broker through a property management company may act as a property management sales agent if:

(a) the dual broker designates the sales agent as a property management sales agent, and

(b) the sales agent pays to the division the property management sales agent designation fee.

(2) A property management sales agent may simultaneously provide both property management services and real estate sales services under the supervision of the dual broker if the property management sales agent:

(a) provides property management services only through the property management company overseen by the dual broker, and

(b) provides real estate sales services only through the real estate brokerage overseen by the dual broker.

(3) Before a property management sales agent may affiliate with another principal broker who is not a dual broker or with a dual broker who does not approve of the property management sales agent designation, the property management sales agent shall pay the additional fee to remove the property management sales agent designation.

 

R162-2f-207. Reporting a Change of Information.

(1) Individual notification requirements.

(a) An individual licensed as a sales agent, associate broker, or principal broker shall report the following to the division:

(i) change in licensee's name; and

(ii) change in licensee's business, home, e-mail, or mailing address.

(b) In addition to complying with this Subsection (1)(a):

(i) an individual licensed as a sales agent or associate broker shall report to the division a change in affiliation with a principal broker; and

(ii) an individual licensed as a principal broker shall report to the division:

(A) termination of a sales agent, associate broker, or branch broker, if the change is not reported pursuant to this Subsection (1)(b)(i);

(B) change in assignment of branch broker; and

(C) termination of the principal broker's affiliation with an entity.

(2) Entity notification requirements. A registered entity shall report the following to the division:

(a) change in entity's name;

(b) change in entity's affiliation with a principal broker;

(c) change in corporate structure;

(d) dissolution of corporation; and

(e) change of location where brokerage records are kept.

(3) Notification procedures.

(a) Name. To report a change in name, a person shall submit to the division a paper change form and:

(i) if the person is an individual, attach to it official documentation such as a:

(A) marriage certificate;

(B) divorce decree;

(C) court order; or

(D) driver license; and

(ii) if the person is an entity:

(A) obtain prior approval from the division of the new entity name; and

(B) attach to the change form proof that the new name as approved by the division pursuant to this Subsection (3)(a)(ii)(A) is registered with, and approved by, the Division of Corporations.

(b) Address. To report a change in address, a person shall enter the change into RELMS.

(c) Affiliation.

(i) To terminate an affiliation between an individual and a principal broker, a person shall submit a change form through RELMS to inactivate or transfer the individual's license; and

(A)(I) obtain the electronic affirmation of the other party to the terminated affiliation; or

(II) comply with this Subsection (4); and

(B) if a sales agent, associate broker, or branch broker simultaneously establishes an affiliation with a new principal broker, obtain the electronic affirmation of the new principal broker on a change form.

(ii) To terminate an affiliation between a principal broker and an entity:

(A) the principal broker shall submit a paper change form to the division to inactivate or transfer the principal broker's license; and

(B) if the entity does not simultaneously affiliate with a new principal broker, the entity shall:

(I) cease operations;

(II) submit to the division a paper company/branch change form to inactivate the entity registration;

(III) submit change forms through RELMS to inactivate the license of any licensee affiliated with the entity;

(IV) advise the division as to the location where records will be stored;

(V) notify each listing and management client that the entity is no longer in business and that the client may enter into a new listing or management agreement with a different brokerage;

(VI) notify each party and cooperating broker to any existing contracts; and

(VII) retain money held in trust under the control of a signer on the trust account, or an administrator or executor, until all parties to each transaction agree in writing to the disposition or until a court of competent jurisdiction issues an order relative to the disposition.

(iii) Branch broker. To change an assignment of branch broker, a principal broker shall submit a paper change form to the division.

(d) Corporate structure.

(i) To report a change in corporate structure of a registered entity, the affiliated principal broker shall:

(A) if the change does not involve a new business license, or a new registration with the Utah Division of Corporations and Commercial Code, submit a letter to the division, fully explaining the change; and

(B) if the change involves a new business license or a new registration with the Utah Division of Corporations and Commercial Code for a purpose other than a company name change, obtain a new registration.

(ii) To report the dissolution of an entity registered with the division, a person shall comply with this Subsection (3)(c)(ii)(B).

(e) Brokerage records. To report a change in the location where brokerage records are kept, the principal broker of the registered entity shall submit to the division a letter on brokerage letterhead.

(4) Unavailability of individual. If an individual is unavailable to sign or electronically affirm a change form, the person responsible to report the change may do so by:

(a) sending a letter by certified mail to the last known address of the individual to notify that individual of the change; and

(i)[(b)] as applicable:

(A)[(i)] entering the certified mail reference number into the appropriate field on the electronic change form; or

(B)[(ii)] providing to the division a copy of the certified mail receipt ; or[.]

(b) sending an email to notify the individual.

(5) The termination of affiliation by sending an email is effective 10 days after the date that the email was sent.

[(5)](6) Fees. The division may require a notification submitted pursuant to this subsection to be accompanied by a nonrefundable change fee.

[(6)](7) Deadlines.

(a) A change in affiliation shall be reported to the division before the change is made.

(b) A change in branch manager shall be reported to the division at the time the change is made.

(c) Any other change shall be reported to the division within ten business days of the change taking effect.

(d) As to a change that requires submission of a paper form or document, if the deadline specified in this Section R162-2f-207 falls on a day when the division is closed for business, the deadline shall be extended to the next business day.

[(7)](8) Effective date. A change reported in compliance with this Section R162-2f-207 becomes effective with the division the day on which the properly executed change form is received by the division.

 

KEY: real estate business, operational requirements, trust account records, notification requirements

Date of Enactment or Last Substantive Amendment: [December 22, 2016]2017

Notice of Continuation: August 12, 2015

Authorizing, and Implemented or Interpreted Law: 61-2f-103(1); 61-2f-105; 61-2f-203(1)(e); 61-2f-206(3); 61-2f-206(4)(a); 61-2f-306; 61-2f-307

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