No. 32523 (Amendment): R162-2. Exam and License Application Requirements

DAR File No.: 32523
Filed: 04/14/2009, 08:32
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

Legislation enacted by the 2009 General Session of the Utah State Legislature (H.B. 86) requires the Division of Real Estate and Real Estate Commission to set prelicense education hours at a minimum of 120. This rule filing sets the hours at 120 beginning on 01/01/2010. It also allows a transition time for those who begin their education before 01/01/2010. The rule filing also makes technical corrections. (DAR NOTE: H.B. 86 (2009) is found at Chapter 312, Laws of Utah 2009, and will be effective 05/12/2009.)

Summary of the rule or change:

This rule filing increases from 90 to 120 the number of required real estate sales agent prelicensing education hours. The rule filing also allows for a transition time for those who begin their education before 01/01/2010.

State statutory or constitutional authorization for this rule:

Subsection 61-2-6(1)(c)(i)(A)

Anticipated cost or savings to:

the state budget:

The state budget will experience no cost or savings due to this rule filing because the Division's procedure for prelicensing education course approval will be identical to its current procedure.

local governments:

Local governments will experience no cost or savings due to this rule filing because they are not required to license real estate agents.

small businesses and persons other than businesses:

Small businesses should experience no cost or savings due to this rule filing since they hire individuals after the individuals have already paid for the cost of prelicensing education.

Compliance costs for affected persons:

Prelicense education providers and individual applicants for licensure will be required to cover the cost of the increased education. A typical 90-hour course costs approximately $400. The exact amount charged will be decided by the education provider.

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

This rule filing makes various technical amendments and also references the recent statutory amendment, which requires 120 hours of prelicensing education for real estate agents. The fiscal impact to businesses as a result of the additional hours of education was likely considered in passage of H.B. 86. No further fiscal impact is anticipated. Francine 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:

Mark Steinagel at the above address, by phone at 801-530-6744, by FAX at 801-530-6749, 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:

06/01/2009

This rule may become effective on:

06/08/2009

Authorized by:

Mark Steinagel, Director

RULE TEXT

R162. Commerce, Real Estate.

R162-2. Exam and License Application Requirements.

R162-2-1. Qualifications for Licensure and Exam Application.

2.1.1 Minimum Age. All applicants shall be at least 18 years of age.

2.1.2 Formal Education Minimum. All applicants shall have at least a high school diploma, G.E.D., or equivalent as determined by the Commission.

2.1.3 Prelicensing Education. All applicants shall have completed any required prelicensing education before applying to sit for a licensing examination.

2.1.4 Exam application. All applicants who desire to sit for a licensing examination shall deliver an application to sit for the examination, together with the applicable examination fee, to the testing service designated by the Division. If the applicant fails to take the examination when scheduled, the fee [will]shall be forfeited.

2.1.4.1. Applicants previously licensed out-of-state.

(a) If an applicant is now and has been actively licensed for the preceding two years in another state which has substantially equivalent licensing requirements and is either a new resident or a non-resident of this state, the Division shall waive the national portion of the exam.

(b) If an applicant has been on an inactive status for any portion of the past two years [he]the applicant may be required to take both the national and Utah state portions of the exam.

 

R162-2-2. Licensing Procedure.

2.2. Within 90 days after successful completion of the exam, the applicant shall return to the Division each of the following:

2.2.1. A report of the examination indicating that both portions of the exam have been passed within a six-month period of time.

2.2.2. The license application form required by the Division. The application form shall include the licensee's business and home address. A post office box without a street address is unacceptable as a business or home address. The licensee may designate any address to be used as a mailing address.

2.2.3. The non-refundable fees which [will ]include the appropriate license fee as authorized by Section 61-2-9(5) and the Recovery Fund fee as authorized by Section 61-2a-4.

2.2.4. Documentation indicating successful completion of the required education taken within the year prior to licensing. If the applicant has been previously licensed in another state which has substantially equivalent licensing requirements, [he]the applicant may apply to the Division for a waiver of all or part of the educational requirement.

[2.2.4.1. Candidates](a) Until December 31, 2009, a candidate for the license of sales agent [will]shall successfully complete 90 classroom hours of approved study in principles and practices of real estate.

(b)(i) Beginning January 1, 2010, a candidate for the license of sales agent shall successfully complete 120 hours of approved study in principles and practices of real estate.

(ii) An applicant for licensure may complete 90 hours of prelicense education only if:

(A) the applicant began the prelicense education program prior to January 1, 2010; and

(B) the applicant submits the completed education prior to March 31, 2010.

(c) Experience [will]shall not satisfy the education requirement. Membership in the Utah State Bar [will]shall waive this requirement. The Division may waive all or part of the educational requirement by virtue of equivalent education taken while completing a college undergraduate or postgraduate degree program, regardless of the date of the degree, or by virtue of other equivalent real estate education if the other real estate education was taken within 12 months prior to application.

[2.2.4.2.](d) Candidates for the license of associate broker or principal broker [will]shall successfully complete 120 classroom hours of study curriculum approved by the Commission consisting of 45 hours of broker principles, 45 hours of broker practices, and 30 hours of Utah law and testing. Experience [will]shall not satisfy the education requirement. The Division may waive all or part of the educational requirement by virtue of equivalent education taken while completing a college undergraduate or postgraduate degree program, regardless of the date of the degree, or by virtue of other equivalent real estate education if the other real estate education was taken within 12 months prior to application.

2.2.5. The principal broker and associate broker applicant [will]shall submit the forms required by the Division documenting a minimum of three years licensed real estate experience and a total of at least 60 points accumulated within the five years prior to licensing. A minimum of two years (24 months) and at least 45 points [will]shall be accumulated from Tables I and/or II. The remaining 15 points may be accumulated from Tables I, II or III.

 

TABLE I - REAL ESTATE TRANSACTIONS

RESIDENTIAL - points can be accumulated from either the

selling or the listing side of a real estate closing:

(a) One unit dwelling                         2.5 points

(b) Two- to four-unit dwellings               5 points

(c) Apartments, 5 units or over              10 points

(d) Improved lot                              2 points

(e) Vacant land/subdivision                  10 points



COMMERCIAL

(f) Hotel or motel                           10 points

(g) Industrial or warehouse                  10 points

(h) Office building                          10 points

(i) Retail building                          10 points

(j) Leasing of commercial space               5 points

 

 

TABLE II - PROPERTY MANAGEMENT

RESIDENTIAL

(a) Each unit managed                         .25 pt/month



COMMERCIAL - hotel/motel,

industrial/warehouse, office, or

retail building

(b) Each contract OR each separate

property address or location for

which licensee has direct responsibility       1 pt/month

 

2.2.6. The Principal Broker may accumulate additional experience points by having participated in real estate related activities such as the following:

 

TABLE III - OPTIONAL

Real Estate Attorney                          1 pt/month

CPA-Certified Public Accountant               1 pt/month

Mortgage Loan Officer                         1 pt/month

Licensed Escrow Officer                       1 pt/month

Licensed Title Agent                          1 pt/month

Designated Appraiser                          1 pt/month

Licensed General Contractor                   1 pt/month

Bank Officer in Real Estate Loans             1 pt/month

Certified Real Estate Prelicensing Instructor  .5 pt/month

 

2.2.7. If the review of an application has been performed by the Division and the Division has denied the application based on insufficient experience, and if the applicant believes that the Experience Points Tables do not adequately reflect the amount of the applicant's experience, the applicant may petition the Real Estate Commission for reevaluation by making a written request within 30 days after the denial stating specific grounds upon which relief is requested. The Commission shall thereafter consider the request and issue a written decision.

2.2.8. An applicant previously licensed in another state [will]shall provide a written record of [his]the applicant's license history from that state and documentation of disciplinary action, if any, against [his]the applicant's license.

2.2.9. Qualifications of License Applicants. An applicant for a new license may not:

(a) have been convicted of, entered a plea in abeyance to, or completed any sentence of confinement on account of, any felony within five years preceding the application; or

(b) have been convicted of, entered a plea in abeyance to, or completed any sentence of confinement on account of, any misdemeanor involving fraud, misrepresentation, theft, or dishonesty within three years preceding the application.

2.2.10 Qualifications for Renewal. An applicant for license renewal, or for reinstatement of an expired license, may not have:

(a) been convicted of or entered a plea in abeyance to a felony during the term of the last license or during the period between license expiration and application to reinstate an expired license; or

(b) a finding of fraud, misrepresentation or deceit entered against the applicant, related to activities requiring a real estate license, by any court of competent jurisdiction or any government agency, unless the finding was explicitly considered by the Division in approving the applicant's initial license or previous license renewals.

2.2.11 Determining fitness for licensure. In determining whether an applicant who has not been disqualified by Subsections 2.2.9 or 2.2.10 meet the requirements of honesty, integrity, truthfulness, reputation and competency required for a new or a renewed license, the Commission and the Division will consider information they consider necessary to make this determination, including the following:

2.2.11.1. Whether an applicant has been denied a license to practice real estate, property management, or any regulated profession, business, or vocation, or whether any license has been suspended or revoked or subjected to any other disciplinary sanction by this or another jurisdiction;

2.2.11.2. Whether an applicant has been guilty of conduct or practices which would have been grounds for revocation or suspension of license under Utah law had the applicant then been licensed;

2.2.11.3. Whether a civil judgment has been entered against the applicant based on a real estate transaction, and whether the judgment has been fully satisfied;

2.2.11.4. Whether a civil judgment has been entered against the applicant based on fraud, misrepresentation or deceit, and whether the judgment has been fully satisfied.

2.2.11.5 Whether an applicant has ever been convicted of, or entered a plea in abeyance to, any criminal offense, or whether any criminal charges against the applicant have ever been resolved by a diversion agreement or similar disposition;

2.2.11.6. Whether restitution ordered by a court in a criminal case has been fully satisfied;

2.2.11.7. Whether the parole or probation in a criminal case or the probation in a licensing action has been completed and fully served; and

2.2.11.8. Whether there has been subsequent good conduct on the part of the applicant. If, because of lapse of time and subsequent good conduct and reputation or other reason deemed sufficient, it shall appear to the Commission and the Division that the interest of the public will not likely be in danger by the granting of a license, the Commission and the Division may approve the applicant relating to honesty, integrity, truthfulness, reputation and competency.

 

R162-2-3. Company Registration.

2.3.1. A Principal Broker shall register with the Division the name under which [his]the principal broker's real estate brokerage or property management company will operate. Registration [will]shall require payment of applicable non-refundable fees and evidence that the name of the new company has been approved by the Division of Corporations, Department of Commerce.

2.3.1.1. The real estate brokerage shall at all times have affiliated with it a principal broker who shall demonstrate that [he]the principal broker is authorized to use the company name.

2.3.1.2. Misleading or deceptive business names. The Division [will]shall not accept a proposed business name when there is a substantial likelihood that the public will be misled by the name into thinking that they are not dealing with a licensed real estate brokerage or property management company.

2.3.2. Registration of Entities Operating a Principal Brokerage.

2.3.2.1. A corporation, partnership, Limited Liability Company, association or other entity which operates a principal brokerage shall comply with R162-2.3 and the following conditions:

2.3.2.2. Individuals associated with the entity shall not engage in activity which requires a real estate license unless they are affiliated with the principal broker and licensed with the Division. Upon a change of principal broker, the entity shall be responsible to insure that the outgoing and incoming principal brokers immediately provide to the Division, on forms required by the Division, evidence of the change.

2.3.2.2.1. If the outgoing principal broker is not available to properly execute the form required to effect the change of principal brokers, the change may still be made provided a letter advising of the change is mailed by the entity by certified mail to the last known address of the outgoing principal broker. A verified copy of the letter and proof of mailing by certified mail shall be attached to the form when it is submitted to the Division.

2.3.2.3. If the change of members in a partnership either by the addition or withdrawal of a partner creates a new legal entity, the new entity cannot operate under the authority of the registration of the previous partnership. The dissolution of a corporation, partnership, Limited Liability Company, association or other entity which has been registered terminates the registration. The Division shall be notified of any change in a partnership or dissolution of a corporation which has registered prior to the effective date of the change.

 

R162-2-4. Licensing of Non-Residents.

2.4. In addition to meeting the requirements of rules 2.1 and 2.2, an applicant living outside of the state of Utah may be issued a license in Utah by successfully completing specific educational hours required by the Division with the concurrence of the Commission, and by passing the real estate licensing examination. The applicant shall also meet each of the following requirements:

2.4.1. If the applicant is an associate broker or sales agent, the principal broker with whom [he]the applicant will be affiliated shall hold an active license in Utah.

2.4.2. If the applicant is a principal broker, [he]the applicant shall establish a real estate trust account in this state. [He]The applicant shall also maintain all office records in this state at a principle business location as outlined in R162-4.1.

2.4.3. The application for licensure in Utah shall be accompanied by an irrevocable written consent allowing service of process on the Commission or the Division.

2.4.4. The applicant shall provide a written record of [his]the applicant's license history, if any, and documentation of disciplinary action, if any, against [his]the applicant's license.

 

KEY: real estate business

Date of Enactment or Last Substantive Amendment: [January 8], 2009

Notice of Continuation: April 18, 2007

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