No. 29739 (Amendment): R162-4-1. Records and Copies of Documents

DAR File No.: 29739
Filed: 03/27/2007, 08:25
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

It is necessary to update Subsection R162-4-1(4.1.4) to correspond with current terminology used in the industry. The part of a real estate closing where the parties sign and deliver documents and deliver monies to the escrow agent is now called "settlement" instead of "closing". "Closing" now refers to the entire process of finalizing a transaction, including settlement, recordation of documents, and payment of the seller.

Summary of the rule or change:

The word "closing" is replaced by "settlement" where appropriate in Subsections R162-4-1(4.1.4), R162-4-1(4.1.4.1), R162-4-1(4.1.4.2), and R162-4-1(4.1.4.3).

State statutory or constitutional authorization for this rule:

Subsection 61-2-5.5(1)(a)(viii)

Anticipated cost or savings to:

the state budget:

None--Updating a rule to use current terminology has no financial impact on state government.

local governments:

None--Updating a rule to use current terminology has no financial impact on local governments.

other persons:

None--Updating a rule to use current terminology has no financial impact on other persons.

Compliance costs for affected persons:

The only persons affected by this rule are real estate brokers and their authorized representatives. Changing the terminology used in the rule to current terminology does not increase compliance costs for these persons.

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

There appears to be no fiscal impact to businesses as a result of this rule filing, which merely updates the provisions with current terminology used in the industry. Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division 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:

Shelley Wismer at the above address, by phone at 801-366-0145, by FAX at 801-366-0315, 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:

05/15/2007

This rule may become effective on:

05/23/2007

Authorized by:

Derek Miller, Director

RULE TEXT

R162. Commerce, Real Estate.

R162-4. Office Procedures - Real Estate Principal Brokerage.

R162-4-1. Records and Copies of Documents.

4.1. The principal broker must maintain in his office and make available for inspection and copying by the Division all records pertaining to a real estate transaction for a period of at least three calendar years following the year in which an offer was rejected or the transaction either closed or failed.

4.1.1. Location of Records. Unless otherwise authorized by the Division in writing, the business records of the principal broker shall be maintained at his principal business location or, where applicable, at the branch office. If a brokerage closes its operation the principal broker must, within ten days after the closure, notify the Division in writing of where the records will be maintained in order to comply with R162-4.1 above. If a brokerage files for bankruptcy, the principal broker must, upon filing, notify the Division in writing of the filing and the current location of brokerage records.

4.1.2. Transaction Identification. All transactions, whether pending, closed or failed, must be numbered consecutively and identifiable in a manner that, in the opinion of the representative of the Division, the transaction can be readily followed in all pertinent documents. A sequential transaction number is to be assigned to every offer, and a separate transaction file is to be maintained for every offer, including rejected offers involving funds deposited to the brokerage trust account. A sequential transaction number need not be assigned to rejected offers which do not involve funds deposited to trust. The principal broker may, at his option, maintain a separate transaction file for each rejected offer which does not involve funds deposited to trust or keep such rejected offers in a single file.

4.1.3. Statement of Account. At the expiration of 30 days after an offer has been made by a buyer and accepted by a seller, either party may demand, and the principal broker must furnish, a detailed statement showing the current status of the transaction. On demand by either party, the principal broker must furnish an updated statement at 30-day intervals thereafter until the transaction is closed.

4.1.4. [Closing]Settlement Statements. A principal broker charged with closing a sale shall cause to be prepared and delivered to the buyer and seller, upon completion of a transaction, a detailed [closing]settlement statement of all their respective accounts showing receipts and disbursement.

4.1.4.1. [Closing]Settlement statements for all real estate transactions in which a real estate principal broker participates must show the following: the date of [closing]settlement; the total purchase price of the property; an itemization of all adjustments, money, or things of value received or paid, and to whom each item is credited or debited. The dates of the adjustments must be shown if they are not the same as the date of [the closing]settlement. Also shown must be the balances due from the respective parties to the transaction, and the names of the payees, makers, and assignees of all notes paid, made, or assumed. The statements furnished to each party to the transaction must contain an itemization of credits and debits as pertain to each party.

4.1.4.2. The principal broker or his authorized representative must attend all [closings]settlements. Regardless of who closes the transaction, a[The] principal broker is responsible for the content and accuracy of all [closing]settlement statements prepared for the signature of the party with whom the principal broker has an agency relationship in that transaction[regardless of who closes the transaction].

4.1.4.3. [The]A principal broker who closes a[closing the] transaction must show proof of delivery of the [closing]settlement statement(s) to the buyer and seller. Signatures of the buyer and seller on the file copy of the [closing]settlement statement or a copy of a transmittal letter sent by certified mail, return receipt requested, when signatures are not attainable, will satisfy this requirement.

4.1.5. Death or Disability of Principal Broker: Upon the death or inability of a principal broker to act as a principal broker the following procedures shall apply:

4.1.5.1. In the case of a corporation, partnership, Limited Liability Company, association, or other legal entity the provisions of R162-2-2.3.2. shall apply.

4.1.5.2. In the case of a sole proprietor all brokerage activity must cease and a family attorney or representative shall: (1) notify the Division and all licensees affiliated with the principal broker in writing of the date of death or disability; (2) advise the Division as to the location where records will be stored; (3) notify each listing and management client in writing to the effect that the principal broker is no longer in business and that the client may enter a new listing or management agreement with the firm of his choice; (4) notify each party and cooperating broker to any existing contracts; and (5) retain trust account monies under the control of the administrator, executor or co-signer on the account until all parties to each transaction agree in writing to disposition or until a court of competent jurisdiction issues an order relative to disposition.

 

KEY: real estate business

Date of Enactment or Last Substantive Amendment: [October 16, 2002]2007

Notice of Continuation: June 3, 2002

Authorizing, and Implemented or Interpreted Law: 61-2-5.5