H.B. 346

1

DIVISION OF REAL ESTATE RELATED
2 AMENDMENTS
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Gage Froerer
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill modifies provisions related to areas regulated by the Division of Real Estate.
11 Highlighted Provisions:
12 This bill:
13 . addresses fines that may be imposed;
14 . addresses disciplinary actions that may be imposed under provisions related to real
15 estate brokers and agents, the Real Estate Appraiser Licensing and Certification Act,
16 and the Utah Residential Mortgage Practices Act;
17 . provides for registration of trainees under the Real Estate Appraiser Licensing and
18 Certification Act;
19 . addresses terminology for experts under the Real Estate Appraiser Licensing and
20 Certification Act;
21 . modifies criminal penalties under the Real Estate Appraiser Licensing and
22 Certification Act and the Utah Residential Mortgage Practices Act;
23 . provides for licensure under an assumed name by an entity under the Utah
24 Residential Mortgage Practices Act;
25 . addresses the hours required of prelicensing education for mortgage licensing
26 including providing for rulemaking;
27 . removes grandfathering language related to principal lending manager;

28 . provides for deposit of certain fees into the Residential Mortgage Loan Education,
29 Research, and Recovery Fund; and
30 . makes technical and conforming amendments.
31 Monies Appropriated in this Bill:
32 None
33 Other Special Clauses:
34 None
35 Utah Code Sections Affected:
36 AMENDS:
37 61-2-13, as last amended by Laws of Utah 1991, Chapter 165
38 61-2-21, as last amended by Laws of Utah 2007, Chapter 325
39 61-2b-2, as last amended by Laws of Utah 2005, Chapter 199
40 61-2b-6, as last amended by Laws of Utah 2005, Chapter 199
41 61-2b-8, as last amended by Laws of Utah 2005, Chapter 199
42 61-2b-18, as last amended by Laws of Utah 2005, Chapter 199
43 61-2b-21, as last amended by Laws of Utah 2005, Chapter 199
44 61-2b-22, as last amended by Laws of Utah 2005, Chapter 199
45 61-2b-24, as last amended by Laws of Utah 2005, Chapter 199
46 61-2b-25, as last amended by Laws of Utah 2007, Chapter 306
47 61-2b-26, as last amended by Laws of Utah 2005, Chapter 199
48 61-2b-27, as last amended by Laws of Utah 2005, Chapter 199
49 61-2b-28, as last amended by Laws of Utah 2007, Chapter 325
50 61-2b-29, as last amended by Laws of Utah 2007, Chapter 325
51 61-2b-30.5, as last amended by Laws of Utah 2005, Chapter 199
52 61-2b-31, as last amended by Laws of Utah 2007, Chapter 325
53 61-2b-33, as last amended by Laws of Utah 2005, Chapter 199
54 61-2c-201, as last amended by Laws of Utah 2007, Chapter 325
55 61-2c-202, as last amended by Laws of Utah 2007, Chapter 325
56 61-2c-206, as last amended by Laws of Utah 2007, Chapter 325
57 61-2c-403, as last amended by Laws of Utah 2007, Chapter 325
58 61-2c-502, as last amended by Laws of Utah 2007, Chapter 325

59 ENACTS:
60 61-2c-405, Utah Code Annotated 1953
61
62 Be it enacted by the Legislature of the state of Utah:
63 Section 1. Section 61-2-13 is amended to read:
64 61-2-13. Grounds for revocation of principal broker's license -- Automatic
65 inactivation of affiliated associate brokers and sales agents licenses.
66 (1) (a) [Any] An unlawful act or [any] violation of this chapter committed by [any real
67 estate sales agent or associate broker employed or engaged as an independent contractor by or
68 on behalf of a licensed principal broker or committed by any employee, officer, or member of a
69 licensed principal broker] a person listed in Subsection (1)(b) is cause for:
70 (i) the revocation, suspension, or probation of [the] a principal broker's license[,]; or
71 [for]
72 (ii) the imposition of a fine against the principal broker in an amount not to exceed
73 [$500] $2,500 per violation.
74 (b) Subsection (1)(a) applies to an act or violation by any of the following:
75 (i) a real estate sales agent or associate broker employed by a licensed principal broker;
76 (ii) a real estate sales agent or associate broker engaged as an independent contractor
77 by or on behalf of a licensed principal broker; or
78 (iii) an employee, officer, or member of a licensed principal broker.
79 (2) (a) The revocation or suspension of a principal broker license automatically
80 inactivates [every] an associate broker or sales agent license granted to [those persons] a person
81 by reason of [their] that person's affiliation with the principal broker whose license [was] is
82 revoked or suspended, pending a change of broker affiliation.
83 (b) A principal broker shall, [prior to] before the effective date of [the] a suspension or
84 revocation of [his] the principal broker's license, notify in writing every licensee affiliated with
85 [him] the principal broker of the revocation or suspension of [his] the principal broker license.
86 Section 2. Section 61-2-21 is amended to read:
87 61-2-21. Remedies and action for violations.
88 (1) (a) The director shall issue and serve upon a person an order directing that person to
89 cease and desist from an act if:

90 (i) the director has reason to believe that the person has been engaging, is about to
91 engage, or is engaging in the act constituting a violation of this chapter; and
92 (ii) it appears to the director that it would be in the public interest to stop the act.
93 (b) Within ten days after receiving the order, the person upon whom the order is served
94 may request [an adjudicative proceeding] a hearing.
95 (c) Pending [the] a hearing requested under Subsection (1)(b), [any] a cease and desist
96 order shall remain in effect.
97 (d) If a request for a hearing is made, the division shall follow the procedures and
98 requirements of Title 63, Chapter 46b, Administrative Procedures Act.
99 (2) (a) After [the] a hearing requested under Subsection (1), if the commission and the
100 director agree that [the] an act of the person violates this chapter, the director:
101 (i) shall issue an order making the order issued under Subsection (1) permanent; and
102 (ii) may impose [a civil penalty not to exceed the greater of:] another disciplinary
103 action under Section 61-2-12 .
104 [(A) $2,500 for each violation; or]
105 [(B) the amount of any gain or economic benefit derived from each violation.]
106 (b) The director shall file suit in the name of the Department of Commerce and the
107 Division of Real Estate, in the district court in the county in which an act described in
108 Subsection (1) [occurred] occurs or where the person resides or carries on business, to enjoin
109 and restrain the person from violating this chapter if:
110 (i) (A) [no] a hearing is not requested under Subsection (1); and
111 (B) the person fails to cease the act described in Subsection (1); or
112 (ii) after discontinuing the act described in Subsection (1), the person again
113 commences the act.
114 (c) [The] A district [courts] court of this state [shall have] has jurisdiction of an action
115 brought under this section.
116 (d) Upon a proper showing in an action brought under this section [related to an
117 undivided fractionalized long-term estate], the court may:
118 (i) issue a permanent or temporary, prohibitory or mandatory injunction;
119 (ii) issue a restraining order or writ of mandamus;
120 (iii) enter a declaratory judgment;

121 (iv) appoint a receiver or conservator for the defendant or the defendant's assets;
122 (v) order disgorgement;
123 (vi) order rescission;
124 (vii) impose a civil penalty not to exceed the greater of:
125 (A) $2,500 for each violation; or
126 (B) the amount of any gain or economic benefit derived from [each] a violation; and
127 (viii) enter any other relief the court considers just.
128 (e) The court may not require the division to post a bond in an action brought under
129 this Subsection (2).
130 (3) [The remedies and action] A remedy or action provided in this section [may] does
131 not limit, interfere with, or prevent the prosecution of[, any other remedies or actions] another
132 remedy or action, including a criminal [proceedings] proceeding.
133 Section 3. Section 61-2b-2 is amended to read:
134 61-2b-2. Definitions.
135 (1) As used in this chapter:
136 (a) (i) "Appraisal" means an unbiased analysis, opinion, or conclusion relating to the
137 nature, quality, value, or utility of a specified [interests] interest in, or [aspects] aspect of,
138 identified real estate or identified real property.
139 (ii) An appraisal [shall be] is classified by the nature of the assignment as a valuation
140 appraisal, an analysis assignment, or a review assignment in accordance with the following
141 definitions:
142 (A) "Valuation appraisal" means an unbiased analysis, opinion, or conclusion that
143 estimates the value of an identified parcel of real estate or identified real property at a particular
144 point in time.
145 (B) "Analysis assignment" means an unbiased analysis, opinion, or conclusion that
146 relates to the nature, quality, or utility of identified real estate or identified real property.
147 (C) "Review assignment" means an unbiased analysis, opinion, or conclusion that
148 forms an opinion as to the adequacy and appropriateness of a valuation appraisal or an analysis
149 assignment.
150 (b) "Appraisal Foundation" means the Appraisal Foundation that was incorporated as
151 an Illinois not-for-profit corporation on November 30, 1987.

152 (c) (i) "Appraisal report" means [any] a communication, written or oral, of an
153 appraisal.
154 (ii) An appraisal report [shall be] is classified by the nature of the assignment as a
155 valuation report, analysis report, or review report in accordance with the definitions provided in
156 Subsection (1)(a)(ii).
157 (iii) The testimony of a person relating to the person's analyses, conclusions, or
158 opinions concerning identified real estate or identified real property is considered to be an oral
159 appraisal report.
160 (d) "Board" means the Real Estate Appraiser Licensing and Certification Board that is
161 established in Section 61-2b-7 .
162 (e) "Certified appraisal report" means a written or oral appraisal report that is certified
163 by a state-certified general appraiser or state-certified residential appraiser.
164 (f) (i) (A) "Consultation service" means an engagement to provide a real estate
165 valuation service analysis, opinion, conclusion, or other service that does not fall within the
166 definition of appraisal.
167 (B) "Consultation service" does not mean a valuation appraisal, analysis assignment, or
168 review assignment.
169 (ii) Regardless of the intention of the client or employer, if a person prepares an
170 unbiased analysis, opinion, or conclusion, the analysis, opinion, or conclusion is considered to
171 be an appraisal and not a consultation service.
172 (g) "Contingent fee" means a fee or other form of compensation, payment of which is
173 dependent on or conditioned by:
174 (i) the reporting of a predetermined analysis, opinion, or conclusion by the person
175 performing the analysis, opinion, or conclusion; or
176 (ii) achieving a result specified by the person requesting the analysis, opinion, or
177 conclusion.
178 (h) "Division" means the Division of Real Estate of the Department of Commerce.
179 (i) "Federally related transaction" means [any] a real estate related transaction that is
180 required by federal law or by federal regulation to be supported by an appraisal prepared by:
181 (i) a state-licensed appraiser; or
182 (ii) a state-certified appraiser.

183 (j) "Real estate" means an identified parcel or tract of land including improvements if
184 any.
185 (k) "Real estate appraisal activity" means the act or process of making an appraisal of
186 real estate or real property and preparing an appraisal report.
187 (l) "Real estate related transaction" means:
188 (i) the sale, lease, purchase, investment in, or exchange of real property or an interest in
189 real property, or the financing of such a transaction;
190 (ii) the refinancing of real property or an interest in real property; or
191 (iii) the use of real property or an interest in real property as security for a loan or
192 investment, including mortgage-backed securities.
193 (m) "Real property" means one or more defined interests, benefits, or rights inherent in
194 the ownership of real estate.
195 (n) "State-certified general appraiser" means a person who holds a current, valid
196 certification as a state-certified general appraiser issued under this chapter.
197 (o) "State-certified residential appraiser" means a person who holds a current, valid
198 certification as a state-certified residential real estate appraiser issued under this chapter.
199 (p) "State-licensed appraiser" means a person who holds a current, valid license as a
200 state-licensed appraiser issued under this chapter.
201 [(q) "State-registered appraiser" means a person who before May 3, 1999, was
202 registered as an appraiser under this chapter.]
203 [(r)] (q) "Trainee" means an individual who:
204 (i) does not hold an appraiser license or appraiser certification issued under this
205 chapter; [and]
206 (ii) works under the direct supervision of a [state-licensed appraiser or] state-certified
207 appraiser to earn experience for licensure[.]; and
208 (iii) is registered as a trainee under this chapter.
209 [(s)] (r) "Unbiased analysis, opinion, or conclusion" means an analysis, opinion, or
210 conclusion relating to the nature, quality, value, or utility of identified real estate or identified
211 real property that is prepared by a person who is employed or retained to act, or would be
212 perceived by third parties or the public as acting, as a disinterested third party in rendering the
213 analysis, opinion, or conclusion.

214 (2) (a) If a term not defined in this section is defined by rule, the term shall have the
215 meaning established by the division by rule made in accordance with Title 63, Chapter 46a,
216 Utah Administrative Rulemaking Act.
217 (b) If a term not defined in this section is not defined by rule, the term shall have the
218 meaning commonly accepted in the business community.
219 Section 4. Section 61-2b-6 is amended to read:
220 61-2b-6. Duties and powers of division.
221 (1) The division [shall have] has the powers and duties listed in this Subsection (1).
222 (a) The division shall:
223 (i) receive [applications] an application for licensing [and], certification, or
224 registration;
225 (ii) establish appropriate administrative procedures for the processing of [applications]
226 an application for licensure [or], certification, or registration;
227 (iii) issue [licenses and certifications to qualified applicants] a license or certification
228 to a qualified applicant pursuant to this chapter; and
229 [(iv) maintain a registry of the names and addresses of individuals who are currently
230 licensed or certified as appraisers under this chapter.]
231 (iv) register an individual who applies for registration as a trainee under this chapter.
232 (b) (i) The division shall require [a trainee to notify the division that the trainee is
233 acting] an individual to register as a trainee with the division before the individual acts in the
234 capacity of a trainee earning experience for licensure.
235 (ii) The board shall adopt rules in accordance with Title 63, Chapter 46a, Utah
236 Administrative Rulemaking Act, for the trainee [notification] registration required by this
237 Subsection (1)(b).
238 (c) The division shall hold public hearings under the direction of the board.
239 (d) The division may:
240 (i) solicit bids and enter into contracts with one or more educational testing services or
241 organizations for the preparation of a bank of questions and answers approved by the board for
242 licensing and certification examinations; and
243 (ii) administer or contract for the administration of licensing and certification
244 examinations as may be required to carry out the division's responsibilities under this chapter.

245 (e) The division shall provide administrative assistance to the board by providing to the
246 board the facilities, equipment, supplies, and personnel that are required to enable the board to
247 carry out the board's responsibilities under this chapter.
248 (f) The division shall assist the board in upgrading and improving the quality of the
249 education and examinations required under this chapter.
250 (g) The division shall assist the board in improving the quality of the continuing
251 education available to [persons] a person licensed and certified under this chapter.
252 (h) The division shall assist the board with respect to the proper interpretation or
253 explanation of the Uniform Standards of Professional Appraisal Practice as required by Section
254 61-2b-27 when an interpretation or explanation becomes necessary in the enforcement of this
255 chapter.
256 (i) The division shall establish fees in accordance with Section 63-38-3.2 :
257 (i) for processing:
258 (A) a trainee [notifications] registration;
259 (B) [applications] an application for licensing and certification; and
260 (C) [registration of expert witnesses] approval of an expert witness; and
261 (ii) for all other functions required or permitted by this chapter.
262 (j) The division may:
263 (i) investigate [complaints] a complaint against:
264 (A) [trainees] a trainee; [or]
265 (B) [persons] a person licensed or certified under this chapter; or
266 (C) a person required to be licensed, certified, or registered under this chapter;
267 (ii) subpoena [witnesses and the production of books, documents, records, and other
268 papers;] a witness;
269 (iii) subpoena the production of a book, document, record, or other paper;
270 [(iii)] (iv) administer [oaths] an oath; and
271 [(iv)] (v) take testimony and receive evidence concerning [all matters] a matter within
272 the division's jurisdiction.
273 (k) The division may:
274 (i) promote research and conduct studies relating to the profession of real estate
275 appraising; and

276 (ii) sponsor real estate appraisal educational activities.
277 (l) The division shall adopt, with the concurrence of the board, rules for the
278 administration of this chapter pursuant to Title 63, Chapter 46a, Utah Administrative
279 Rulemaking Act, that are not inconsistent with this chapter or the constitution and laws of this
280 state or of the United States.
281 (m) The division shall employ an appropriate staff to investigate allegations that
282 [persons] a person required to be licensed [or], certified, or registered under this chapter
283 [failed] fails to comply with this chapter.
284 (n) The division may employ [such] other professional, clerical, and technical staff as
285 may be necessary to properly administer the work of the division under this chapter.
286 (o) The division may make available, at a reasonable cost determined by the division, a
287 list of the names and addresses of all persons licensed or certified by the division under this
288 chapter to the extent the information is a public record under Title 63, Chapter 2, Government
289 Records Access and Management Act.
290 (2) (a) The division shall [register expert witnesses who are] approve an expert witness
291 who is not otherwise licensed or certified under this chapter to appear in [all] an administrative
292 [and] or judicial tax [proceedings] proceeding to provide evidence related to the valuation of
293 real property that is assessed by the tax commission, provided that the:
294 (i) [registration] approval is limited to a specific proceeding;
295 (ii) [registration] approval is valid until the proceeding becomes final;
296 (iii) applicant pays [a registration] an approval fee to the division;
297 (iv) applicant provides the applicant's name, address, occupation, and professional
298 credentials; and
299 (v) applicant provides a notarized statement that:
300 (A) the applicant is competent to render an appraisal and to testify as an expert witness
301 in the proceeding; and
302 (B) the appraisal and testimony to be offered shall be in accordance with the Uniform
303 Standards of Professional Appraisal Practice adopted by the board.
304 (b) Subsection (2)(a) [shall be] is effective for [all] an administrative [and] or judicial
305 property tax [proceedings] proceeding related to the valuation of real property that is assessed
306 by the tax commission, including those filed but which are not final as of May 3, 1994.

307 (3) (a) [The division shall be] If the conditions of Subsection (3)(b) are met, the
308 division is immune from any civil action or criminal prosecution for initiating or assisting in
309 [any] a lawful investigation of [the actions of] an act of, or participating in [any] a disciplinary
310 proceeding concerning [a trainee or]:
311 (i) a person required to be licensed, certified, or registered pursuant to this chapter; or
312 (ii) a person approved as an expert witness pursuant to this chapter [if the action is
313 taken].
314 (b) This Subsection (3) applies if the division takes the action:
315 (i) without malicious intent; and
316 (ii) in the reasonable belief that the action [was] is taken pursuant to the powers and
317 duties vested in the [members of the] division under this chapter.
318 Section 5. Section 61-2b-8 is amended to read:
319 61-2b-8. Duties of board.
320 (1) (a) The board shall provide technical assistance to the division relating to real estate
321 appraisal standards and real estate appraiser qualifications [and shall have the responsibilities,
322 powers,].
323 (b) The board has the powers and duties listed in this section.
324 [(1)] (2) The board shall:
325 (a) determine the experience, education, and examination requirements appropriate for
326 [persons] a person licensed under this chapter;
327 (b) determine the experience, education, and examination requirements appropriate for
328 [persons] a person certified under this chapter in compliance with the minimum requirements
329 of Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and consistent with
330 the intent of this chapter;
331 (c) determine the appraisal related acts that may be performed by:
332 (i) a trainee on the basis of the trainee's education and experience;
333 (ii) clerical staff; and
334 (iii) a person who:
335 (A) does not hold a license or certification; and
336 (B) assists [appraisers] an appraiser licensed or certified under this chapter in providing
337 appraisal services or consultation services;

338 (d) determine the procedures for a trainee [notifying] to register with the division [that
339 the trainee will assist persons licensed or certified under this chapter in providing appraisal
340 services or consultation services]; and
341 (e) develop one or more programs to upgrade and improve the experience, education,
342 and examinations as required under this chapter.
343 [(2)] (3) (a) The experience, education, and examination requirements established by
344 the board for [persons] a person licensed or certified under this chapter shall be the minimum
345 criteria established by the Appraiser Qualification Board of the Appraisal Foundation, unless,
346 after notice and a public hearing held in accordance with Title 63, Chapter 46a, Utah
347 Administrative Rulemaking Act, the board finds that the minimum criteria are not appropriate
348 for a state-licensed [appraisers or] appraiser or a state-certified [appraisers] appraiser in this
349 state.
350 (b) If under Subsection [(2)] (3)(a) the board makes a finding that the minimum criteria
351 are not appropriate, the board shall recommend appropriate criteria to the Legislature.
352 [(3)] (4) The board shall:
353 (a) determine the continuing education requirements appropriate for the renewal of
354 [licenses and certifications] a license or certification issued under this chapter;
355 (b) develop one or more programs to upgrade and improve continuing education; and
356 (c) recommend to the division one or more available continuing education courses that
357 meet the requirements of this chapter.
358 [(4)] (5) (a) The board shall consider the proper interpretation or explanation of the
359 Uniform Standards of Professional Appraisal Practice as required by Section 61-2b-27 when:
360 (i) an interpretation or explanation [becomes] is necessary in the enforcement of this
361 chapter; and
362 (ii) the Appraisal Standards Board of the Appraisal Foundation has not [as yet] issued
363 an interpretation or explanation.
364 (b) If the conditions of Subsection [(4)] (5)(a) are met, the board shall recommend to
365 the division the appropriate interpretation or explanation that the division should adopt as a
366 rule under this chapter.
367 [(5)] (6) The board shall develop and establish or approve the examination
368 specifications and the minimum score required to pass [the examinations] an examination for

369 licensure [and] or certification.
370 [(6)] (7) The board [shall] may review the:
371 (a) bank of questions and answers that comprise the examination for [persons] a person
372 licensed and certified under this chapter;
373 (b) procedure that is established for selecting individual questions from the bank of
374 questions for use in each scheduled examination; and
375 (c) questions in the bank of questions and the related answers to determine whether
376 they meet the examination specifications established by the board.
377 [(7)] (8) (a) The board shall conduct an administrative [hearings] hearing, not
378 delegated by the board to an administrative law judge, in connection with [all] a disciplinary
379 [proceedings] proceeding under Sections