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7 LONG TITLE
8 General Description:
9 This bill amends provisions of Title 61, Securities Division - Real Estate Division.
10 Highlighted Provisions:
11 This bill:
12 ▸ defines terms;
13 ▸ changes certain filing fees;
14 ▸ amends costs related to an on-site inspection regarding an application for
15 registration of subdivided lands;
16 ▸ amends the renewal fee for the registration of subdivided lands;
17 ▸ amends provisions related to prelicensing education and continuing education for a
18 person transacting the business of residential mortgage loans;
19 ▸ amends provisions related to a criminal background check for an individual
20 applying for a license to transact the business of residential mortgage loans;
21 ▸ amends provisions regarding prohibited conduct for an individual licensed under
22 Title 61:
23 • Chapter 2c, Utah Residential Mortgage Practices and Licensing;
24 • Chapter 2f, Real Estate Licensing and Practices Act; or
25 • Chapter 2g, Real Estate Appraiser Licensing and Certification Act;
26 ▸ amends provisions regarding the removal of an appraiser from an appraiser
27 management company's appraiser panel;
28 ▸ amends provisions regarding the issuance and display of a license issued under the
29 Real Estate Licensing and Practices Act;
30 ▸ amends the amount of time following certain violations in which the Division of
31 Real Estate may commence a disciplinary action;
32 ▸ amends provision related to an appraiser trainee signing an appraisal report; and
33 ▸ makes technical and conforming changes.
34 Money Appropriated in this Bill:
35 None
36 Other Special Clauses:
37 None
38 Utah Code Sections Affected:
39 AMENDS:
40 57-11-4, as last amended by Laws of Utah 2013, Chapter 292
41 57-11-6, as last amended by Laws of Utah 1990, Chapter 199
42 57-11-10, as last amended by Laws of Utah 2008, Chapter 382
43 61-2c-102, as last amended by Laws of Utah 2018, Chapter 55
44 61-2c-202, as last amended by Laws of Utah 2015, Chapter 262
45 61-2c-204.1, as last amended by Laws of Utah 2017, Chapter 182
46 61-2c-301, as last amended by Laws of Utah 2017, Chapter 182
47 61-2e-306, as last amended by Laws of Utah 2016, Chapter 384
48 61-2f-205, as last amended by Laws of Utah 2014, Chapter 350
49 61-2f-401, as last amended by Laws of Utah 2019, Chapters 337 and 475
50 61-2f-402, as last amended by Laws of Utah 2017, Chapter 182
51 61-2g-401, as renumbered and amended by Laws of Utah 2011, Chapter 289
52 61-2g-405, as renumbered and amended by Laws of Utah 2011, Chapter 289
53 61-2g-502, as last amended by Laws of Utah 2016, Chapter 384
54
55 Be it enacted by the Legislature of the state of Utah:
56 Section 1. Section 57-11-4 is amended to read:
57 57-11-4. Exemptions.
58 (1) Unless the method of disposition is adopted for the purpose of evasion of this
59 chapter or the federal act, this chapter does not apply to an offer or disposition of an interest in
60 land:
61 (a) by a purchaser of subdivided lands for the person's own account in a single or
62 isolated transaction;
63 (b) (i) on a unit of which there is a residential, commercial, or industrial building; or
64 (ii) on a unit of which there is a legal obligation on the part of the seller to complete
65 construction of a residential, commercial, or industrial building within two years from date of
66 disposition;
67 (c) unless a person who acquires land for one of the following purposes sells that land
68 to one or more individuals as unimproved lots with no legal obligation on the part of the seller
69 to construct a residential, commercial, or industrial building on that lot within two years from
70 the date of disposition:
71 (i) if the person acquires an interest in the land for use in the business of constructing
72 residential, commercial, or industrial buildings; or
73 (ii) if the person acquires the type of land described in Subsection (1)(c)(i) for the
74 purpose of disposition to a person engaged in the business of constructing residential,
75 commercial, or industrial buildings;
76 (d) pursuant to court order;
77 (e) by a government or government agency;
78 (f) (i) if the interest lies within the boundaries of a city or a county which:
79 (A) has a planning and zoning board using at least one professional planner;
80 (B) enacts ordinances that require approval of planning, zoning, and plats, including
81 the approval of plans for streets, culinary water, sanitary sewer, and flood control; and
82 (C) will have the improvements described in Subsection (1)(f)(i)(B) plus telephone and
83 electricity; and
84 (ii) if at the time of the offer or disposition the subdivider furnishes satisfactory
85 assurance of completion of the improvements described in Subsection (1)(f)(i)(C);
86 (g) in an industrial park;
87 (h) as cemetery lots; or
88 (i) if the interest is offered as part of a camp resort as defined in Section 57-19-2 or a
89 timeshare development as defined in Section 57-19-2.
90 (2) Unless the method of disposition is adopted for the purpose of evasion of this
91 chapter or the provisions of the federal act, this chapter, except as specifically designated, does
92 not apply to an offer or disposition of:
93 (a) indebtedness secured by a mortgage or deed of trust on real estate;
94 (b) a security or unit of interest issued by a real estate investment trust regulated under
95 any state or federal statute;
96 (c) subject to Subsection (5), subdivided lands registered under the federal act and
97 which the division finds to be in the public interest to exempt from the registration
98 requirements of this chapter;
99 (d) a security currently registered with the Division of Securities; or
100 (e) an interest in oil, gas, or other minerals or a royalty interest in these assets if the
101 offer or disposition of the interest is regulated as a security by the federal government or by the
102 Division of Securities.
103 (3) (a) Notwithstanding the exemptions in Subsections (1) and (2), a person making an
104 offer or disposition of an interest in land that is located in Utah shall apply to the division for
105 an exemption before the offer or disposition is made if:
106 (i) the person is representing, in connection with the offer or disposition, the
107 availability of culinary water service to or on the subdivided land; and
108 (ii) the culinary water service is provided by a water corporation as defined in Section
109 54-2-1.
110 (b) A subdivider seeking to qualify under [
111 (3)(a) shall file with the division a filing fee of [
112 (i) information [
113 is exempt under this section;
114 (ii) a statement as to what entity will [
115 the nature of that entity; and
116 (iii) (A) a copy of the entity's certificate of convenience and necessity issued by the
117 Public Service Commission; or
118 (B) evidence that the entity providing water service is exempt from the jurisdiction of
119 the Public Service Commission.
120 (4) (a) The director may by rule or order exempt a person from a requirement of this
121 chapter if the director finds that the offering of an interest in a subdivision is essentially
122 noncommercial.
123 (b) For purposes of this section, the bulk sale of subdivided lands by a subdivider to
124 another person who will become the subdivider of those lands is considered essentially
125 noncommercial.
126 (5) (a) A subdivider seeking to qualify under the exemption described in Subsection
127 (2)(c) shall file with the division:
128 (i) a copy of an effective statement of record filed with the Consumer Financial
129 Protection Bureau; and
130 (ii) a filing fee of $100.
131 (b) If a subdivider does not qualify under the exemption described in Subsection (2)(c),
132 the division shall credit the filing fee described in Subsection (5)(a) to the filing fee required
133 for registration under this chapter.
134 (c) Nothing in this Subsection (5) exempts a subdivider from:
135 (i) Sections 57-11-16 and 57-11-17; or
136 (ii) the requirement to file an annual report with the division under Section 57-11-10.
137 (6) Notwithstanding an exemption under this section, the division:
138 (a) retains jurisdiction over an offer or disposition of an interest in land to determine
139 whether or not the exemption continues to apply; and
140 (b) may require compliance with this chapter if an exemption no longer applies.
141 Section 2. Section 57-11-6 is amended to read:
142 57-11-6. Application for registration -- Required documents and information --
143 Filing fee and deposit -- Consolidation of registration of additional lands -- Reports of
144 changes.
145 (1) [
146 by the division's rules and, unless otherwise provided by the division, shall include[
147
148 (a) an irrevocable appointment of the division to receive service of any lawful process
149 in any noncriminal proceeding arising under this chapter against the applicant or [
150 applicant's personal representative;
151 (b) a legal description of the subdivided lands offered for registration, together with a
152 map showing the division proposed or made, the dimensions of the units, and the relation of
153 the subdivided lands to existing streets, roads, and other off-site improvements;
154 (c) the states or jurisdictions, including the United States, in which an application for
155 registration or similar document has been filed, and a copy of any adverse order, judgment, or
156 decree entered in connection with the subdivided lands by the regulatory authorities in each
157 jurisdiction or by any court;
158 (d) the applicant's name and address, and the form, date, and jurisdiction of
159 organization;
160 (e) the address of each of [
161 (f) the name and address of the individual to whom the applicant wishes to have the
162 division direct all communications;
163 [
164 (g) for each director, officer, or general partner of the applicant or person occupying a
165 similar status or performing similar functions[
166 (i) the individual's name and address;
167 (ii) the individual's principal occupation for the five years before the day on which the
168 applicant files the application; and
169 (iii) the extent and nature of [
170 subdivided lands as of a specified date within 30 days [
171 the application is filed;
172 [
173 the subdivided lands, including encumbrances, as of a specified date within 30 days [
174
175 (i) if the subdivided lands are situated in this state, shall be in the form of:
176 (A) a title opinion from a title insurer qualified to engage in the title insurance business
177 in this state; or
178 (B) an opinion of an attorney, licensed to practice in this state and who is not a salaried
179 employee, officer, or director of the applicant or owner;
180 (ii) if the subdivided lands are situated in another jurisdiction, shall be in the form of
181 an opinion of an attorney:
182 (A) licensed to practice in the jurisdiction where the lands are situated; and
183 (B) who is not a salaried employee, officer, or director of the applicant or owner; or
184 (iii) may be substituted by other evidence of title acceptable to the division;
185 [
186 evidence [
187 agreements [
188 [
189 disposed of to the purchaser was acquired and a statement of any lien or encumbrance upon the
190 title and copies of the instruments creating the lien or encumbrance, if any, with recording data,
191 but if any of these instruments contain any information relating to the consideration paid upon
192 the prior acquisition of the subdivided lands, this information may be blocked out;
193 [
194 the consequences to a purchaser of failure to discharge the lien or encumbrance and the steps, if
195 any, taken to protect the purchaser in case of this eventuality;
196 [
197 affecting the subdivided lands;
198 [
199 use of the subdivided lands and of any existing or proposed taxes or special assessments which
200 affect the subdivided lands;
201 [
202 disposed of are included on a subdivision plat map [
203 [
204 practice in this state and who is not a salaried employee, officer, or director of the applicant or
205 owner, stating that:
206 (A) the proposed or made land division [
207 violate any existing state statute or local ordinance; and
208 (B) all permits or approvals have been obtained from the applicable state or local
209 authorities necessary for the subdivided lands to be put to the use for which they are offered,
210 except for those permits or approvals [
211 lands are registered under this chapter if this registration is the only condition precedent to the
212 granting of the permits or approvals; or
213 (ii) if the subdivided lands are situated in another jurisdiction, an opinion by an
214 attorney licensed to practice in that jurisdiction and who is not a salaried employee, officer, or
215 director of the applicant or owner stating, that the proposed or made land division [
216
217 [
218 (i) the existing provisions for access, sewage disposal, water (including a supply of
219 culinary water), and other public utilities in the subdivision; and[
220 (ii) if [
221 but are feasible, the estimated cost to the purchaser [
222 [
223 the completion of improvements, any provisions for maintenance of those improvements, and
224 estimated costs to the purchaser for improvements;
225 [
226 connection with an offer or disposition of land, that culinary water service will be available to
227 or on the subdivided lands, and if the applicant is or will be so representing:
228 (i) a statement as to what entity will be providing the culinary water service and the
229 nature of the entity; and
230 (ii) if the entity providing the culinary water service is not a municipal system, a
231 certificate from the Public Service Commission that the entity providing the culinary water
232 service [
233 (A) holds a certificate of convenience and necessity from the [
234 Service Commission; or
235 (B) has been found by the Public Service Commission to be exempt from [
236 Public Service Commission's jurisdiction;
237 [
238 subdivided lands together with copies of all advertising material [
239 prepared for public distribution by any means of communication;
240 [
241 [
242 filed with or issued by any agency of the United States or any state or jurisdiction; and
243 [
244 [
245 (2) (a) Each application for registration of subdivided lands shall be accompanied by a
246 filing fee of $500 for up to 30 units, plus an additional $3 per unit for each unit over 30 units
247 up to a maximum of $2,500 for each application[
248
249
250
251
252
253 (b) If the division determines that an on-site inspection of the subdivided lands
254 proposed for registration to be offered for disposition is necessary, the applicant shall pay the
255 division the actual amount of costs the division incurs performing the on-site inspection.
256 (3) In the event the subdivider registers additional subdivided lands to be offered for
257 disposition, [
258 registration offering subdividing lands for disposition under the same promotional plan by
259 filing an application for consolidation:
260 (a) accompanied by an additional fee of $200, plus $3 for each additional unit, up to a
261 maximum of $1,250 for each application[
262 (b) if at the time the subdivider makes the application, all of the information required
263 by Subsection (1) of this section [
264 subdivided lands.
265 (4) [
266 [
267 after the day on which that change becomes known to [
268 Section 3. Section 57-11-10 is amended to read:
269 57-11-10. Renewal report -- Renewal fee -- Examination by division -- Annual
270 reports.
271 (1) (a) Within 30 days after each annual anniversary date of the division's registration
272 of subdivided lands, the subdivider shall file a renewal report in the form [
273
274 (b) The report shall reflect [
275 the original application for registration, including any change in ownership of the subdivider.
276 (c) The report shall also indicate the number of units in the subdivision that have been
277 disposed of since the division registered the subdivided lands.
278 (2) (a) The division may, upon the filing of a renewal report, initiate a renewal
279 examination of the kind described in Section 57-11-8.
280 (b) If the division determines upon inquiry and examination that the subdivider fails to
281 meet any of the requirements of Section 57-11-8 [
282 notify the subdivider that the subdivider must correct the report, the promotional plan, or the
283 plan of disposition [
284 division, after the day on which the subdivider receives the notice.
285 (c) If the subdivider does not meet the requirements [
286 allowed, the division may, notwithstanding the provisions of Section 57-11-13 and without
287 further notice, issue a cease and desist order according to the emergency procedures of Title
288 63G, Chapter 4, Administrative Procedures Act, barring further sale of the subdivided lands.
289 (3) The division may permit the filing of annual reports within 30 days after the
290 anniversary date of the consolidated registration in lieu of the anniversary date of the original
291 registration.
292 Section 4. Section 61-2c-102 is amended to read:
293 61-2c-102. Definitions.
294 (1) As used in this chapter:
295 (a) "Affiliation" means that a mortgage loan originator is associated with a principal
296 lending manager in accordance with Section 61-2c-209.
297 (b) "Applicant" means a person applying for a license under this chapter.
298 (c) "Approved examination provider" means a person approved by the nationwide
299 database or by the division as an approved test provider.
300 (d) "Associate lending manager" means an individual who:
301 (i) qualifies under this chapter as a principal lending manager; and
302 (ii) works by or on behalf of another principal lending manager in transacting the
303 business of residential mortgage loans.
304 (e) "Balloon payment" means a required payment in a mortgage transaction that:
305 (i) results in a greater reduction in the principle of the mortgage than a regular
306 installment payment; and
307 (ii) is made during or at the end of the term of the loan.
308 (f) "Branch lending manager" means an individual who is:
309 (i) licensed as a lending manager; and
310 (ii) designated in the nationwide database by the individual's sponsoring entity as being
311 responsible to work from a branch office and to supervise the business of residential mortgage
312 loans that is conducted at the branch office.
313 (g) "Branch office" means a licensed entity's office:
314 (i) for the transaction of the business of residential mortgage loans regulated under this
315 chapter;
316 (ii) other than the main office of the licensed entity; and
317 (iii) that operates under:
318 (A) the same business name as the licensed entity; or
319 (B) another trade name that is registered with the division under the entity license.
320 (h) "Business day" means a day other than:
321 (i) a Saturday;
322 (ii) a Sunday; or
323 (iii) a federal or state holiday.
324 (i) (i) "Business of residential mortgage loans" means for compensation or in the
325 expectation of compensation to:
326 (A) engage in an act that makes an individual a mortgage loan originator;
327 (B) make or originate a residential mortgage loan;
328 (C) directly or indirectly solicit a residential mortgage loan for another;
329 (D) unless exempt under Section 61-2c-105 or excluded under Subsection (1)(i)(ii),
330 render services related to the origination of a residential mortgage loan including:
331 (I) preparing a loan package;
332 (II) communicating with the borrower or lender;
333 (III) advising on a loan term;
334 (IV) receiving, collecting, or distributing information common for the processing or
335 underwriting of a loan in the mortgage industry; or
336 (V) communicating with a consumer to obtain information necessary for the processing
337 or underwriting of a residential mortgage loan; or
338 (E) engage in loan modification assistance.
339 (ii) "Business of residential mortgage loans" does not include:
340 (A) ownership of an entity that engages in the business of residential mortgage loans if
341 the owner does not personally perform the acts listed in Subsection (1)(i)(i);
342 (B) acting in one or more of the following capacities:
343 (I) a loan wholesaler;
344 (II) an account executive for a loan wholesaler;
345 (III) a loan closer; or
346 (IV) funding a loan; or
347 (C) if employed by a person who owns or services an existing residential mortgage
348 loan, the direct negotiation with the borrower for the purpose of loan modification.
349 (j) "Certified education provider" means a person who is certified under Section
350 61-2c-204.1 to provide [
351 education[
352 [
353 (k) "Closed-end" means a loan:
354 (i) with a fixed amount borrowed; and
355 (ii) that does not permit additional borrowing secured by the same collateral.
356 (l) "Commission" means the Residential Mortgage Regulatory Commission created in
357 Section 61-2c-104.
358 (m) "Community development financial institution" means the same as that term is
359 defined in 12 U.S.C. Sec. 4702.
360 (n) "Compensation" means anything of economic value that is paid, loaned, granted,
361 given, donated, or transferred to an individual or entity for or in consideration of:
362 (i) services;
363 (ii) personal or real property; or
364 (iii) another thing of value.
365 (o) "Concurrence" means that entities given a concurring role must jointly agree for the
366 action to be taken.
367 (p) "Continuing education" means education [
368
369 Sections 61-2c-204.1 and 61-2c-205 to activate, renew, or reinstate a license under this chapter.
370 (q) "Control," as used in Subsection 61-2c-105(2)(f), means the power to directly or
371 indirectly:
372 (i) direct or exercise a controlling interest over:
373 (A) the management or policies of an entity; or
374 (B) the election of a majority of the directors, officers, managers, or managing partners
375 of an entity;
376 (ii) vote 20% or more of a class of voting securities of an entity by an individual; or
377 (iii) vote more than 5% of a class of voting securities of an entity by another entity.
378 (r) (i) "Control person" means an individual identified by an entity registered with the
379 nationwide database as being an individual directing the management or policies of the entity.
380 (ii) "Control person" may include one of the following who is identified as provided in
381 Subsection (1)(r)(i):
382 (A) a manager;
383 (B) a managing partner;
384 (C) a director;
385 (D) an executive officer; or
386 (E) an individual who performs a function similar to an individual listed in this
387 Subsection (1)(r)(ii).
388 (s) "Depository institution" means the same as that term is defined in Section 7-1-103.
389 (t) "Director" means the director of the division.
390 (u) "Division" means the Division of Real Estate.
391 (v) "Dwelling" means a residential structure attached to real property that contains one
392 to four family units including any of the following if used as a residence:
393 (i) a condominium unit;
394 (ii) a cooperative unit;
395 (iii) a manufactured home; or
396 (iv) a house.
397 (w) "Employee":
398 (i) means an individual:
399 (A) whose manner and means of work performance are subject to the right of control
400 of, or are controlled by, another person; and
401 (B) whose compensation for federal income tax purposes is reported, or is required to
402 be reported, on a W-2 form issued by the controlling person; and
403 (ii) does not include an independent contractor who performs duties other than at the
404 direction of, and subject to the supervision and instruction of, another person.
405 (x) "Entity" means:
406 (i) a corporation;
407 (ii) a limited liability company;
408 (iii) a partnership;
409 (iv) a company;
410 (v) an association;
411 (vi) a joint venture;
412 (vii) a business trust;
413 (viii) a trust; or
414 (ix) another organization.
415 (y) "Executive director" means the executive director of the Department of Commerce.
416 (z) "Federal licensing requirements" means Secure and Fair Enforcement for Mortgage
417 Licensing, 12 U.S.C. Sec. 5101 et seq.
418 (aa) "Foreclosure rescue" means, for compensation or with the expectation of receiving
419 valuable consideration, to:
420 (i) engage, or offer to engage, in an act that:
421 (A) the person represents will assist a borrower in preventing a foreclosure; and
422 (B) relates to a transaction involving the transfer of title to residential real property; or
423 (ii) as an employee or agent of another person:
424 (A) solicit, or offer that the other person will engage in an act described in Subsection
425 (1)(aa)(i); or
426 (B) negotiate terms in relationship to an act described in Subsection (1)(aa)(i).
427 (bb) "Inactive status" means a dormant status into which an unexpired license is placed
428 when the holder of the license is not currently engaging in the business of residential mortgage
429 loans.
430 (cc) "Lending manager" means an individual licensed as a lending manager under
431 Section 61-2c-206 to transact the business of residential mortgage loans.
432 (dd) "Licensee" means a person licensed with the division under this chapter.
433 (ee) "Licensing examination" means the examination required by Section 61-2c-204.1
434 or 61-2c-206 for an individual to obtain a license under this chapter.
435 (ff) "Loan modification assistance" means, for compensation or with the expectation of
436 receiving valuable consideration, to:
437 (i) act, or offer to act, on behalf of a person to:
438 (A) obtain a loan term of a residential mortgage loan that is different from an existing
439 loan term including:
440 (I) an increase or decrease in an interest rate;
441 (II) a change to the type of interest rate;
442 (III) an increase or decrease in the principal amount of the residential mortgage loan;
443 (IV) a change in the number of required period payments;
444 (V) an addition of collateral;
445 (VI) a change to, or addition of, a prepayment penalty;
446 (VII) an addition of a cosigner; or
447 (VIII) a change in persons obligated under the existing residential mortgage loan; or
448 (B) substitute a new residential mortgage loan for an existing residential mortgage
449 loan; or
450 (ii) as an employee or agent of another person:
451 (A) solicit, or offer that the other person will engage in an act described in Subsection
452 (1)(ff)(i); or
453 (B) negotiate terms in relationship to an act described in Subsection (1)(ff)(i).
454 (gg) (i) "Mortgage loan originator" means an individual who, for compensation or in
455 expectation of compensation:
456 (A) (I) takes a residential mortgage loan application;
457 (II) offers or negotiates terms of a residential mortgage loan for the purpose of:
458 (Aa) a purchase;
459 (Bb) a refinance;
460 (Cc) a loan modification assistance; or
461 (Dd) a foreclosure rescue; or
462 (III) directly or indirectly solicits a residential mortgage loan for another person; and
463 (B) is licensed as a mortgage loan originator in accordance with this chapter.
464 (ii) "Mortgage loan originator" does not include a person who:
465 (A) is described in Subsection (1)(gg)(i), but who performs exclusively administrative
466 or clerical tasks as described in Subsection (1)(i)(ii)(A);
467 (B) (I) is licensed under Chapter 2f, Real Estate Licensing and Practices Act;
468 (II) performs only real estate brokerage activities; and
469 (III) receives no compensation from:
470 (Aa) a lender;
471 (Bb) a lending manager; or
472 (Cc) an agent of a lender or lending manager; or
473 (C) is solely involved in extension of credit relating to a timeshare plan, as defined in
474 11 U.S.C. Sec. 101(53D).
475 (hh) "Nationwide database" means the Nationwide Mortgage Licensing System and
476 Registry, authorized under federal licensing requirements.
477 (ii) "Nontraditional mortgage product" means a mortgage product other than a 30-year
478 fixed rate mortgage.
479 (jj) "Person" means an individual or entity.
480 (kk) "Prelicensing education" means education taken by an individual seeking to be
481 licensed under this chapter in order to meet the education requirements imposed by Section
482 61-2c-204.1 or 61-2c-206 for an individual to obtain a license under this chapter.
483 (ll) "Principal lending manager" means an individual:
484 (i) licensed as a lending manager under Section 61-2c-206; and
485 (ii) identified in the nationwide database by the individual's sponsoring entity as the
486 entity's principal lending manager.
487 (mm) "Prospective borrower" means a person applying for a mortgage from a person
488 who is required to be licensed under this chapter.
489 (nn) "Record" means information that is:
490 (i) prepared, owned, received, or retained by a person; and
491 (ii) (A) inscribed on a tangible medium; or
492 (B) (I) stored in an electronic or other medium; and
493 (II) in a perceivable and reproducible form.
494 [
495 [
496
497
498 [
499 [
500
501
502 [
503
504
505
506 [
507 (i) the loan or extension of credit is secured by a:
508 (A) mortgage;
509 (B) deed of trust; or
510 (C) consensual security interest; and
511 (ii) the mortgage, deed of trust, or consensual security interest described in Subsection
512 (1)[
513 (A) is on a dwelling located in the state; and
514 (B) is created with the consent of the owner of the residential real property.
515 (pp) "Section 8 of RESPA" means 12 U.S.C. Sec. 2607 and any rules made thereunder.
516 (qq) "Settlement" means the time at which each of the following is complete:
517 (i) the borrower and, if applicable, the seller sign and deliver to each other or to the
518 escrow or closing office each document required by:
519 (A) the real estate purchase contract;
520 (B) the lender;
521 (C) the title insurance company;
522 (D) the escrow or closing office;
523 (E) the written escrow instructions; or
524 (F) applicable law;
525 (ii) the borrower delivers to the seller, if applicable, or to the escrow or closing office
526 any money, except for the proceeds of any new loan, that the borrower is required to pay; and
527 (iii) if applicable, the seller delivers to the buyer or to the escrow or closing office any
528 money that the seller is required to pay.
529 (rr) "Settlement services" means a service provided in connection with a real estate
530 settlement, including a title search, a title examination, the provision of a title certificate,
531 services related to title insurance, services rendered by an attorney, preparing documents, a
532 property survey, rendering a credit report or appraisal, a pest or fungus inspection, services
533 rendered by a real estate agent or broker, the origination of a federally related mortgage loan,
534 and the processing of a federally related mortgage.
535 (ss) "Sponsorship" means an association in accordance with Section 61-2c-209
536 between an individual licensed under this chapter and an entity licensed under this chapter.
537 (tt) "State" means:
538 (i) a state, territory, or possession of the United States;
539 (ii) the District of Columbia; or
540 (iii) the Commonwealth of Puerto Rico.
541 (uu) "Uniform state test" means the uniform state content section of the qualified
542 written test developed by the nationwide database.
543 (vv) "Unique identifier" means the same as that term is defined in 12 U.S.C. Sec. 5102.
544 (ww) "Utah-specific" means an educational requirement under this chapter that relates
545 specifically to Utah.
546 (2) (a) If a term not defined in this section is defined by rule, the term shall have the
547 meaning established by the division by rule made in accordance with Title 63G, Chapter 3,
548 Utah Administrative Rulemaking Act.
549 (b) If a term not defined in this section is not defined by rule, the term shall have the
550 meaning commonly accepted in the business community.
551 Section 5. Section 61-2c-202 is amended to read:
552 61-2c-202. Licensure procedures.
553 (1) To apply for licensure under this chapter an applicant shall in a manner provided by
554 the division by rule:
555 (a) if the applicant is an entity, submit:
556 (i) through the nationwide database, a licensure statement that:
557 (A) lists any name under which the entity will transact business in this state;
558 (B) lists the address of the principal business location of the entity;
559 (C) identifies each control person for the entity;
560 (D) identifies each jurisdiction in which the entity is registered, licensed, or otherwise
561 regulated in the business of residential mortgage loans;
562 (E) discloses any adverse administrative action taken by an administrative agency
563 against the entity or a control person for the entity; and
564 (F) discloses any history of criminal proceedings that involves a control person of the
565 entity; and
566 (ii) a notarized letter to the division that:
567 (A) is on the entity's letterhead;
568 (B) is signed by the entity's owner, director, or president;
569 (C) authorizes the principal lending manager to do business under the entity's name and
570 under each of the entity's licensed trade names, if any; and
571 (D) includes any information required by the division by rule;
572 (b) if the applicant is an individual:
573 (i) submit a licensure statement that identifies the entity with which the applicant is
574 sponsored;
575 (ii) authorize periodic criminal background checks through the nationwide database, at
576 times provided by rule that the division makes in accordance with Title 63G, Chapter 3, Utah
577 Administrative Rulemaking Act, accessing[
578
579
580 (iii) submit evidence using a method approved by the division by rule of having
581 successfully completed approved prelicensing education in accordance with Section
582 61-2c-204.1;
583 (iv) submit evidence using a method approved by the division by rule of having
584 successfully passed any required licensing examination in accordance with Section
585 61-2c-204.1;
586 (v) submit evidence using a method approved by the division by rule of having
587 successfully registered in the nationwide database, including paying a fee required by the
588 nationwide database; and
589 (vi) authorize the division to obtain independent credit reports:
590 (A) through a consumer reporting agency described in Section 603(p) of the Fair Credit
591 Reporting Act, 15 U.S.C. Sec. 1681a; and
592 (B) at times provided by rule that the division makes in accordance with Title 63G,
593 Chapter 3, Utah Administrative Rulemaking Act; and
594 (c) pay to the division:
595 (i) an application fee established by the division in accordance with Section 63J-1-504;
596 and
597 (ii) the reasonable expenses incurred by the division in processing the application for
598 licensure.
599 (2) (a) Upon receiving an application, the division, with the concurrence of the
600 commission, shall determine whether the applicant:
601 (i) meets the qualifications for licensure; and
602 (ii) complies with this section.
603 (b) If the division, with the concurrence of the commission, determines that an
604 applicant meets the qualifications for licensure and complies with this section, the division
605 shall issue the applicant a license.
606 (c) If the division, with the concurrence of the commission, determines that the
607 division requires more information to make a determination under Subsection (2)(a), the
608 division may:
609 (i) hold the application pending further information about an applicant's criminal
610 background or history related to adverse administrative action in any jurisdiction; or
611 (ii) issue a conditional license:
612 (A) pending the completion of a criminal background check; and
613 (B) subject to probation, suspension, or revocation if the criminal background check
614 reveals that the applicant did not truthfully or accurately disclose on the licensing application a
615 criminal history or other history related to adverse administrative action.
616 (3) (a) The commission may delegate to the division the authority to:
617 (i) review a class or category of application for an initial or renewed license;
618 (ii) determine whether an applicant meets the qualifications for licensure;
619 (iii) conduct a necessary hearing on an application; and
620 (iv) approve or deny a license application without concurrence by the commission.
621 (b) If the commission delegates to the division the authority to approve or deny an
622 application without concurrence by the commission and the division denies an application for
623 licensure, the applicant who is denied licensure may petition the commission for a de novo
624 review of the application.
625 (c) An applicant who is denied licensure under Subsection (3)(b) may seek agency
626 review by the executive director only after the commission reviews the division's denial of the
627 applicant's application.
628 (d) Subject to Subsection (3)(c) and in accordance with Title 63G, Chapter 4,
629 Administrative Procedures Act, an applicant who is denied licensure under this chapter may
630 submit a request for agency review to the executive director within 30 days following the day
631 on which the commission order denying the licensure is issued.
632 Section 6. Section 61-2c-204.1 is amended to read:
633 61-2c-204.1. Education providers -- Education requirements -- Examination
634 requirements.
635 (1) As used in this section:
636 (a) "Approved continuing education course" means a course of continuing education
637 that is approved by the nationwide database [
638 (b) "Approved prelicensing education course" means a course of prelicensing education
639 that is approved by the nationwide database or by the division.
640 (2) (a) A person may not provide Utah-specific prelicensing education [
641
642 chapter.
643 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
644 division shall make rules establishing:
645 (i) certification criteria and procedures to become a certified education provider; and
646 (ii) standards of conduct for a certified education provider.
647 (c) In accordance with the rules described in Subsection (2)(b), the division shall
648 certify a person to provide the education described in Subsection (2)(a).
649 (d) (i) Upon request, the division shall make available to the public a list of the names
650 and addresses of certified education providers either directly or through a third party.
651 (ii) A person who requests a list under this Subsection (2)(d) shall pay the costs
652 incurred by the division to make the list available.
653 (e) In certifying a person as a certified education provider, the division by rule may:
654 (i) distinguish between an individual instructor and an entity that provides education;
655 or
656 (ii) approve[
657 [
658 (3) (a) The division may not:
659 (i) license an individual under this chapter as a mortgage loan originator who has not
660 completed the prelicensing education required by this section:
661 (A) before taking the licensing examinations required by Subsection (4);
662 (B) in the number of hours, not to exceed 90 hours, required by rule made by the
663 division in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
664 (C) that includes the prelicensing education required by federal licensing regulations;
665 (ii) subject to Subsection (6), renew a license of an individual who has not completed
666 the continuing education required by this section and Section 61-2c-205:
667 (A) in the number of hours required by rule made by the division in accordance with
668 Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
669 (B) that includes the continuing education required by federal licensing regulations; or
670 (iii) license an individual under this chapter as a lending manager who has not
671 completed the prelicensing education required by Section 61-2c-206 before taking the licensing
672 examination required by Section 61-2c-206.
673 (b) Subject to Subsection (3)(a) and with the concurrence of the division, the
674 commission shall determine:
675 (i) except as provided in Subsection 61-2c-206(1)(b), the appropriate number of hours
676 of prelicensing education required to obtain a license;
677 (ii) the subject matters of the prelicensing education required under this section and
678 Section 61-2c-206, including online education or distance learning options;
679 (iii) the appropriate number of hours of continuing education required to renew a
680 license, including additional continuing education required for a new loan originator; and
681 (iv) the subject matter of courses the division may accept for continuing education
682 purposes.
683 (c) The commission may appoint a committee to make recommendations to the
684 commission concerning approval of prelicensing education and continuing education courses,
685 except that the commission shall appoint at least one member to the committee to represent
686 each association that represents a significant number of individuals licensed under this chapter.
687 (d) The division may by rule made in accordance with Title 63G, Chapter 3, Utah
688 Administrative Rulemaking Act, provide for the calculation of continuing education credits,
689 except that the rules shall be consistent with 12 U.S.C. Sec. 5105.
690 (4) (a) The division may not license an individual under this chapter unless that
691 individual first passes the qualified written national test developed by the nationwide database
692 that includes the uniform state test content that:
693 (i) meets the minimum federal licensing requirements; and
694 (ii) is administered by an approved examination provider.
695 (b) The commission, with the concurrence of the division, shall determine the
696 requirements for the lending manager licensing examination required under Section 61-2c-206
697 that tests the applicant's knowledge of:
698 (i) fundamentals of the English language;
699 (ii) arithmetic;
700 (iii) provisions of this chapter;
701 (iv) advanced residential mortgage principles and practices; and
702 (v) other aspects of Utah law the commission, with the concurrence of the division,
703 determines appropriate.
704 (c) An individual who will engage in an activity as a mortgage loan originator, is not
705 considered to have passed a licensing examination if that individual has not met the minimum
706 competence requirements of 12 U.S.C. Sec. 5104(d)(3).
707 (5) When reasonably practicable, the commission and the division shall make the
708 Utah-specific education requirements described in this section available electronically through
709 one or more distance education methods approved by the commission and division.
710 (6) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
711 the commission, with the concurrence of the division, shall make rules establishing procedures
712 under which a licensee may be exempted from a Utah-specific continuing education
713 requirement:
714 (i) for a period not to exceed four years; and
715 (ii) upon a finding of reasonable cause.
716 (b) An individual who engages in an activity as a mortgage loan originator may not
717 under this Subsection (6) be exempted from the minimum continuing education required under
718 federal licensing regulations for an individual who engages in an activity as a mortgage loan
719 originator.
720 Section 7. Section 61-2c-301 is amended to read:
721 61-2c-301. Prohibited conduct -- Violations of the chapter.
722 (1) A person transacting the business of residential mortgage loans in this state may
723 not:
724 (a) [
725 (b) charge a fee in connection with a residential mortgage loan transaction:
726 (i) that is excessive; or
727 (ii) without providing to the loan applicant a written statement signed by the loan
728 applicant:
729 (A) stating whether or not the fee or deposit is refundable; and
730 (B) describing the conditions, if any, under which all or a portion of the fee or deposit
731 will be refunded to the loan applicant;
732 (c) act incompetently in the transaction of the business of residential mortgage loans
733 such that the person fails to:
734 (i) safeguard the interests of the public; or
735 (ii) conform to acceptable standards of the residential mortgage loan industry;
736 (d) do any of the following as part of a residential mortgage loan transaction, regardless
737 of whether the residential mortgage loan closes:
738 (i) make a false statement or representation;
739 (ii) cause false documents to be generated; or
740 (iii) knowingly permit false information to be submitted by any party;
741 (e) give or receive compensation or anything of value, or withhold or threaten to
742 withhold payment of an appraiser fee, to influence the independent judgment of an appraiser in
743 reaching a value conclusion in a residential mortgage loan transaction, except that it is not a
744 violation of this section for a licensee to withhold payment because of a bona fide dispute
745 regarding a failure of the appraiser to comply with the licensing law or the Uniform Standards
746 of Professional Appraisal Practice;
747 (f) violate or not comply with:
748 (i) this chapter;
749 (ii) an order of the commission or division; or
750 (iii) a rule made by the division;
751 (g) fail to respond within the required time period to:
752 (i) a notice or complaint of the division; or
753 (ii) a request for information from the division;
754 (h) make false representations to the division, including in a licensure statement;
755 (i) [
756 engage in the business of residential mortgage loans with respect to the transaction if the
757 person also acts in any of the following capacities with respect to the same residential mortgage
758 loan transaction:
759 (i) appraiser;
760 (ii) escrow agent;
761 (iii) real estate agent;
762 (iv) general contractor; or
763 (v) title insurance producer;
764 (j) engage in unprofessional conduct as defined by rule;
765 (k) engage in an act or omission in transacting the business of residential mortgage
766 loans that constitutes dishonesty, fraud, or misrepresentation;
767 (l) engage in false or misleading advertising;
768 (m) (i) fail to account for money received in connection with a residential mortgage
769 loan;
770 (ii) use money for a different purpose from the purpose for which the money is
771 received; or
772 (iii) except as provided in Subsection (4), retain money paid for services if the services
773 are not performed;
774 (n) fail to provide a prospective borrower a copy of each appraisal and any other
775 written valuation developed in connection with an application for credit that is to be secured by
776 a first lien on a dwelling in accordance with Subsection (5);
777 (o) engage in an act that is performed to:
778 (i) evade this chapter; or
779 (ii) assist another person to evade this chapter;
780 (p) recommend or encourage default, delinquency, or continuation of an existing
781 default or delinquency, by a mortgage applicant on an existing indebtedness before the closing
782 of a residential mortgage loan that will refinance all or part of the indebtedness;
783 (q) in the case of the lending manager of an entity or a branch office of an entity, fail to
784 exercise reasonable supervision over the activities of:
785 (i) unlicensed staff; or
786 (ii) a mortgage loan originator who is affiliated with the lending manager;
787 (r) pay or offer to pay an individual who does not hold a license under this chapter for
788 work that requires the individual to hold a license under this chapter;
789 (s) in the case of a dual licensed title licensee as defined in Section 31A-2-402:
790 (i) provide a title insurance product or service without the approval required by Section
791 31A-2-405; or
792 (ii) knowingly provide false or misleading information in the statement required by
793 Subsection 31A-2-405(2);
794 (t) represent to the public that the person can or will perform any act of a mortgage
795 loan originator if that person is not licensed under this chapter because the person is exempt
796 under Subsection 61-2c-105(4), including through:
797 (i) advertising;
798 (ii) a business card;
799 (iii) stationery;
800 (iv) a brochure;
801 (v) a sign;
802 (vi) a rate list; or
803 (vii) other promotional item;
804 (u) (i) engage in an act of loan modification assistance without being licensed under
805 this chapter;
806 (ii) engage in an act of foreclosure rescue that requires licensure as a real estate agent
807 or real estate broker under Chapter 2, Division of Real Estate, without being licensed under
808 that chapter;
809 (iii) engage in an act of loan modification assistance without entering into a written
810 agreement specifying which one or more acts of loan modification assistance will be
811 completed;
812 (iv) request or require a person to pay a fee before obtaining:
813 (A) a written offer for a loan modification from the person's lender or servicer; and
814 (B) the person's written acceptance of the offer from the lender or servicer;
815 (v) induce a person seeking a loan modification to hire the licensee to engage in an act
816 of loan modification assistance by:
817 (A) suggesting to the person that the licensee has a special relationship with the
818 person's lender or loan servicer; or
819 (B) falsely representing or advertising that the licensee is acting on behalf of:
820 (I) a government agency;
821 (II) the person's lender or loan servicer; or
822 (III) a nonprofit or charitable institution;
823 (vi) recommend or participate in a loan modification that requires a person to:
824 (A) transfer title to real property to the licensee or to a third-party with whom the
825 licensee has a business relationship or financial interest;
826 (B) make a mortgage payment to a person other than the person's loan servicer; or
827 (C) refrain from contacting the person's:
828 (I) lender;
829 (II) loan servicer;
830 (III) attorney;
831 (IV) credit counselor; or
832 (V) housing counselor; or
833 (vii) for an agreement for loan modification assistance entered into on or after May 11,
834 2010, engage in an act of loan modification assistance without offering in writing to the person
835 entering into the agreement for loan modification assistance a right to cancel the agreement
836 within three business days after the day on which the person enters the agreement;
837 (v) sign or initial a document on behalf of another person, except for in a circumstance
838 allowed by the division by rule, with the concurrence of the commission, made in accordance
839 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
840 (w) violate or fail to comply with a provision of Title 57, Chapter 28, Utah Reverse
841 Mortgage Act; or
842 (x) engage in any act or practice that violates appraisal independence as defined in 15
843 U.S.C. Sec. 1639e or in the policies and procedures of:
844 (i) the Federal Home Loan Mortgage Corporation; or
845 (ii) the Federal National Mortgage Association.
846 [
847
848
849 [
850 [
851 [
852 [
853
854 (2) Regardless of whether the crime is related to the business of residential mortgage
855 loans, it is a violation of this chapter for a licensee or a person who is a certified education
856 provider to:
857 (a) be convicted of:
858 (i) a felony; or
859 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
860 (A) a class A misdemeanor;
861 (B) a class B misdemeanor; or
862 (C) a criminal offense comparable to a class A or class B misdemeanor;
863 (b) plead guilty or nolo contendere to:
864 (i) a felony; or
865 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
866 (A) a class A misdemeanor;
867 (B) a class B misdemeanor; or
868 (C) a criminal offense comparable to a class A or class B misdemeanor; or
869 (c) enter into a plea in abeyance agreement in relation to:
870 (i) a felony; or
871 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
872 (A) a class A misdemeanor;
873 (B) a class B misdemeanor; or
874 (C) a criminal offense comparable to a class A or class B misdemeanor.
875 (3) A lending manager does not violate Subsection (1)(q) if:
876 (a) in contravention of the lending manager's written policies and instructions, an
877 affiliated licensee of the lending manager violates:
878 (i) this chapter; or
879 (ii) rules made by the division under this chapter;
880 (b) the lending manager established and followed reasonable procedures to ensure that
881 affiliated licensees receive adequate supervision;
882 (c) upon learning of a violation by an affiliated licensee, the lending manager
883 attempted to prevent or mitigate the damage;
884 (d) the lending manager did not participate in or ratify the violation by an affiliated
885 licensee; and
886 (e) the lending manager did not attempt to avoid learning of the violation.
887 (4) Notwithstanding Subsection (1)(m)(iii), a licensee may, upon compliance with
888 Section 70D-2-305, charge a reasonable cancellation fee for work done originating a mortgage
889 if the mortgage is not closed.
890 (5) (a) Except as provided in Subsection (5)(b), a person transacting the business of
891 residential mortgage loans in this state shall provide a prospective borrower a copy of each
892 appraisal and any other written valuation developed in connection with an application for credit
893 that is to be secured by a first lien on a dwelling on or before the earlier of:
894 (i) as soon as reasonably possible after the appraisal or other valuation is complete; or
895 (ii) three business days before the day of the settlement.
896 (b) Subject to Subsection (5)(c), unless otherwise prohibited by law, a prospective
897 borrower may waive the timing requirement described in Subsection (5)(a) and agree to receive
898 each appraisal and any other written valuation:
899 (i) less than three business days before the day of the settlement; or
900 (ii) at the settlement.
901 (c) (i) Except as provided in Subsection (5)(c)(ii), a prospective borrower shall submit
902 a waiver described in Subsection (5)(b) at least three business days before the day of the
903 settlement.
904 (ii) Subsection (5)(b) does not apply if the waiver only pertains to a copy of an
905 appraisal or other written valuation that contains only clerical changes from a previous version
906 of the appraisal or other written valuation and the prospective borrower received a copy of the
907 original appraisal or other written valuation at least three business days before the day of the
908 settlement.
909 (d) If a prospective borrower submits a waiver described in Subsection (5)(b) and the
910 transaction never completes, the person transacting the business of residential mortgage loans
911 shall provide a copy of each appraisal or any other written valuation to the applicant no later
912 than 30 days after the day on which the person knows the transaction will not complete.
913 Section 8. Section 61-2e-306 is amended to read:
914 61-2e-306. Removal of appraiser from appraisal panel.
915 (1) [
916
917 company may not remove the appraiser from [
918 appraiser panel, or otherwise refuse to assign a request for a real estate appraisal activity to the
919 appraiser without:
920 (a) notifying the appraiser in writing of:
921 (i) the reason why the appraiser is being removed from the appraiser panel of the
922 appraisal management company; and
923 (ii) the nature of the alleged conduct or violation if the appraiser is being removed from
924 the appraiser panel for:
925 (A) illegal conduct; or
926 (B) a violation of the applicable appraisal standards; and
927 (b) providing an opportunity for the appraiser to respond to the notification under
928 Subsection (1)(a).
929 (2) The board, with the concurrence of the division, may establish by rule made in
930 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, requirements
931 consistent with this section regarding the removal of an appraiser from an appraisal panel.
932 Section 9. Section 61-2f-205 is amended to read:
933 61-2f-205. Form of license.
934 [
935 [
936 [
937 [
938 [
939
940 [
941
942
943 Section 10. Section 61-2f-401 is amended to read:
944 61-2f-401. Grounds for disciplinary action.
945 The following acts are unlawful and grounds for disciplinary action for a person
946 licensed or required to be licensed under this chapter:
947 (1) (a) making a substantial misrepresentation, including in a licensure statement;
948 (b) making an intentional misrepresentation;
949 (c) pursuing a continued and flagrant course of misrepresentation;
950 (d) making a false representation or promise through an agent, sales agent, advertising,
951 or otherwise; or
952 (e) making a false representation or promise of a character likely to influence,
953 persuade, or induce;
954 (2) acting for more than one party in a transaction without the informed consent of the
955 parties;
956 (3) (a) acting as an associate broker or sales agent while not affiliated with a principal
957 broker;
958 (b) representing or attempting to represent a principal broker other than the principal
959 broker with whom the person is affiliated; or
960 (c) representing as sales agent or having a contractual relationship similar to that of
961 sales agent with a person other than a principal broker;
962 (4) (a) failing, within a reasonable time, to account for or to remit money that belongs
963 to another and comes into the person's possession;
964 (b) commingling money described in Subsection (4)(a) with the person's own money;
965 or
966 (c) diverting money described in Subsection (4)(a) from the purpose for which the
967 money is received;
968 (5) paying or offering to pay valuable consideration[
969 a person not licensed under this chapter, except that valuable consideration may be shared:
970 (a) with a principal broker of another jurisdiction; or
971 (b) as provided under:
972 (i) Title 16, Chapter 10a, Utah Revised Business Corporation Act;
973 (ii) Title 16, Chapter 11, Professional Corporation Act; or
974 (iii) Title 48, Chapter 3a, Utah Revised Uniform Limited Liability Company Act, as
975 appropriate pursuant to Section 48-3a-1405;
976 (6) for a principal broker, paying or offering to pay a sales agent or associate broker
977 who is not affiliated with the principal broker at the time the sales agent or associate broker
978 earned the compensation;
979 (7) being incompetent to act as a principal broker, associate broker, or sales agent in
980 such manner as to safeguard the interests of the public;
981 (8) failing to voluntarily furnish a copy of a document to the parties before and after the
982 execution of a document;
983 (9) failing to keep and make available for inspection by the division a record of each
984 transaction, including:
985 (a) the names of buyers and sellers or lessees and lessors;
986 (b) the identification of real estate;
987 (c) the sale or rental price;
988 (d) money received in trust;
989 (e) agreements or instructions from buyers and sellers or lessees and lessors; and
990 (f) any other information required by rule;
991 (10) failing to disclose, in writing, in the purchase, sale, or rental of real estate, whether
992 the purchase, sale, or rental is made for that person or for an undisclosed principal;
993 [
994
995 [
996 [
997 [
998
999 [
1000 [
1001 [
1002 [
1003
1004 (11) regardless of whether the crime is related to the business of real estate:
1005 (a) be convicted of:
1006 (i) a felony; or
1007 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
1008 (A) a class A misdemeanor;
1009 (B) a class B misdemeanor; or
1010 (C) a criminal offense comparable to a class A or class B misdemeanor;
1011 (b) plead guilty or nolo contendere to:
1012 (i) a felony; or
1013 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
1014 (A) a class A misdemeanor;
1015 (B) a class B misdemeanor; or
1016 (C) a criminal offense comparable to a class A or class B misdemeanor;
1017 (c) enter into a plea in abeyance agreement in relation to:
1018 (i) a felony; or
1019 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
1020 (A) a class A misdemeanor;
1021 (B) a class B misdemeanor; or
1022 (C) a criminal offense comparable to a class A or class B misdemeanor;
1023 [
1024 false, misleading, or deceptive manner;
1025 [
1026 active and reasonable supervision, as the commission may define by rule made in accordance
1027 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, over the activities of the
1028 principal broker's or branch broker's licensed or unlicensed staff;
1029 [
1030 (a) this chapter;
1031 (b) an order of the commission; or
1032 (c) the rules adopted by the commission and the division;
1033 [
1034 real estate transaction;
1035 [
1036 [
1037 [
1038 on the basis of misconduct in a professional capacity that relates to character, honesty,
1039 integrity, or truthfulness:
1040 (a) a real estate license, registration, or certificate issued by another jurisdiction; or
1041 (b) another license, registration, or certificate to engage in an occupation or profession
1042 issued by this state or another jurisdiction;
1043 [
1044 under this chapter within 10 days after the day on which the request is served, including:
1045 (a) failing to respond to a subpoena;
1046 (b) withholding evidence; or
1047 (c) failing to produce documents or records;
1048 [
1049 (a) providing a title insurance product or service without the approval required by
1050 Section 31A-2-405; or
1051 (b) knowingly providing false or misleading information in the statement required by
1052 Subsection 31A-2-405(2);
1053 [
1054 and a sales agent or associate broker as evidenced by a final judgment of a court;
1055 [
1056 as a mortgage officer under Chapter 2c, Utah Residential Mortgage Practices and Licensing
1057 Act, without being licensed under that chapter;
1058 (b) engaging in an act of foreclosure rescue without entering into a written agreement
1059 specifying what one or more acts of foreclosure rescue will be completed;
1060 (c) inducing a person who is at risk of foreclosure to hire the licensee to engage in an
1061 act of foreclosure rescue by:
1062 (i) suggesting to the person that the licensee has a special relationship with the person's
1063 lender or loan servicer; or
1064 (ii) falsely representing or advertising that the licensee is acting on behalf of:
1065 (A) a government agency;
1066 (B) the person's lender or loan servicer; or
1067 (C) a nonprofit or charitable institution; or
1068 (d) recommending or participating in a foreclosure rescue that requires a person to:
1069 (i) transfer title to real estate to the licensee or to a third-party with whom the licensee
1070 has a business relationship or financial interest;
1071 (ii) make a mortgage payment to a person other than the person's loan servicer; or
1072 (iii) refrain from contacting the person's:
1073 (A) lender;
1074 (B) loan servicer;
1075 (C) attorney;
1076 (D) credit counselor; or
1077 (E) housing counselor;
1078 [
1079 otherwise limiting a real estate brokerage's access to or control over, a record that:
1080 (a) (i) the real estate brokerage's licensed staff, unlicensed staff, or affiliated
1081 independent contractor prepared; and
1082 (ii) is related to the business of:
1083 (A) the real estate brokerage; or
1084 (B) an associate broker, a branch broker, or a sales agent of the real estate brokerage; or
1085 (b) is related to the business administration of the real estate brokerage;
1086 [
1087 law;
1088 [
1089 unpaid commission or other compensation related to real estate brokerage services; or
1090 [
1091 arrangement, as defined in Section 31A-23a-1001, in accordance with the federal Real Estate
1092 Settlement Procedures Act, 12 U.S.C. Sec. 2601 et seq. and any rules made thereunder.
1093 Section 11. Section 61-2f-402 is amended to read:
1094 61-2f-402. Investigations -- Disciplinary actions.
1095 (1) The division may conduct a public or private investigation within or outside of this
1096 state as the division considers necessary to determine whether a person has violated, is
1097 violating, or is about to violate this chapter or any rule or order under this chapter.
1098 (2) To aid in the enforcement of this chapter or in the prescribing of rules and forms
1099 under this chapter, the division may require or permit a person to file a statement in writing,
1100 under oath or otherwise as to the facts and circumstances concerning the matter to be
1101 investigated.
1102 (3) For the purpose of the investigation described in Subsection (1), the division or an
1103 employee designated by the division may:
1104 (a) administer an oath or affirmation;
1105 (b) issue a subpoena that requires:
1106 (i) the attendance and testimony of a witness; or
1107 (ii) the production of evidence;
1108 (c) take evidence;
1109 (d) require the production of a book, paper, contract, record, other document, or
1110 information relevant to the investigation; and
1111 (e) serve a subpoena by certified mail.
1112 (4) (a) A court of competent jurisdiction shall enforce, according to the practice and
1113 procedure of the court, a subpoena issued by the division.
1114 (b) The division shall pay any witness fee, travel expense, mileage, or any other fee
1115 required by the service statutes of the state where the witness or evidence is located.
1116 (5) (a) If a person is found to have violated this chapter or a rule made under this
1117 chapter, the person shall pay the costs incurred by the division to copy a book, paper, contract,
1118 document, or record required under this chapter, including the costs incurred to copy an
1119 electronic book, paper, contract, document, or record in a universally readable format.
1120 (b) If a person fails to pay the costs described in Subsection (5)(a) when due, the
1121 person's license, certification, or registration is automatically suspended:
1122 (i) beginning the day on which the payment of costs is due; and
1123 (ii) ending the day on which the costs are paid.
1124 (6) (a) Except as provided in [
1125 commence a disciplinary action under this chapter no later than the earlier of the following:
1126 (i) four years after the day on which the violation is reported to the division; or
1127 (ii) 10 years after the day on which the violation occurred.
1128 (b) Except as provided in Subsection (6)(c), the division shall commence a disciplinary
1129 action within four years after the day on which a violation occurred, if the violation was of:
1130 (i) Section 61-2f-206;
1131 (ii) Subsection 61-2f-401(8), which prohibits failure to voluntarily furnish a copy of a
1132 document to the parties before and after the execution of a document; or
1133 (iii) Subsection 61-2f-401(18), which prohibits failure to respond to a division request
1134 in an investigation within 10 days after the day on which the request is served.
1135 [
1136 time period described in Subsection (6)(a) or (b) expires if:
1137 (i) (A) the disciplinary action is in response to a civil or criminal judgment or
1138 settlement; and
1139 (B) the division initiates the disciplinary action no later than one year after the day on
1140 which the judgment is issued or the settlement is final; or
1141 (ii) the division and the person subject to a disciplinary action enter into a written
1142 stipulation to extend the time period described in Subsection (6)(a) or (b).
1143 Section 12. Section 61-2g-401 is amended to read:
1144 61-2g-401. State-certified and state-licensed appraisers -- Restrictions on use of
1145 terms -- Conduct prohibited or required -- Trainee.
1146 (1) (a) The terms "state-certified general appraiser," "state-certified residential
1147 appraiser," and "state-licensed appraiser":
1148 (i) may only be used to refer to an individual who is certified or licensed under this
1149 chapter; and
1150 (ii) may not be used following, or immediately in connection with, the name or
1151 signature of a firm, partnership, corporation, or group, or in any manner that it might be
1152 interpreted as referring to a firm, partnership, corporation, group, or to anyone other than the
1153 individual who is certified or licensed under this chapter.
1154 (b) The requirement of this Subsection (1) may not be construed to prevent a
1155 state-certified general appraiser from signing an appraisal report on behalf of a corporation,
1156 partnership, firm, or group practice if it is clear that:
1157 (i) only the individual is certified; and
1158 (ii) the corporation, partnership, firm, or group practice is not certified.
1159 (c) Except as provided in Section 61-2g-103, a certificate or license may not be issued
1160 under this chapter to a corporation, partnership, firm, or group.
1161 (2) (a) A person other than a state-certified general appraiser or state-certified
1162 residential appraiser[
1163 create the impression of certification in this state as a real estate appraiser.
1164 (b) A person other than a state-licensed appraiser may not assume or use any title,
1165 designation, or abbreviation likely to create the impression of licensure in this state as a real
1166 estate appraiser.
1167 (3) (a) Only an individual who has qualified under the certification requirements of this
1168 chapter is authorized to prepare and sign a certified appraisal report relating to real estate or
1169 real property in this state.
1170 [
1171
1172
1173 [
1174
1175
1176 [
1177
1178 [
1179
1180
1181 [
1182 report outside the state-certified residential appraiser's authority as defined in Section
1183 61-2g-312.
1184 [
1185 appraisal report is authorized to cosign the certified appraisal report.
1186 (4) A person who has not qualified under this chapter may not describe or refer to any
1187 appraisal or appraisal report relating to real estate or real property in this state by the terms
1188 "certified appraisal" or "certified appraisal report."
1189 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
1190 with the concurrence of the division, the board may make rules for the administration of this
1191 section regarding:
1192 (a) the signing of an appraisal report; or
1193 (b) the disclosure and use of an appraiser or an appraiser trainee's division-assigned
1194 credential, registration, license, or certification number.
1195 [
1196 report, the appraisal report shall disclose:
1197 (a) the trainee's name; and
1198 (b) the extent to which the trainee assists in the preparation of the appraisal report.
1199 Section 13. Section 61-2g-405 is amended to read:
1200 61-2g-405. Recordkeeping requirements.
1201 (1) Subject to Subsection (2), a person licensed or certified under this chapter [
1202
1203 period of five years the original or a true copy of:
1204 (a) each written contract engaging the person's services for real estate or real property
1205 appraisal work;
1206 (b) each appraisal report prepared or signed by the person; and
1207 (c) the supporting data assembled and formulated by the appraiser in preparing each
1208 appraisal report.
1209 (2) The five-year period for retention of records is applicable to each engagement of
1210 the services of the appraiser and begins upon the date of the delivery of each appraisal report to
1211 the client unless, within the five-year period, the appraiser is notified that the appraisal or the
1212 appraisal report is involved in litigation, in which event the records must be maintained for the
1213 longer of:
1214 (a) five years; or
1215 (b) two years following the date of the final disposition of the litigation.
1216 (3) Upon reasonable notice, a person licensed or certified under this chapter [
1217
1218 required to be maintained under this chapter available to the division for inspection and
1219 copying.
1220 Section 14. Section 61-2g-502 is amended to read:
1221 61-2g-502. Disciplinary action -- Grounds.
1222 (1) (a) The board may order disciplinary action, with the concurrence of the division,
1223 against a person:
1224 (i) registered, licensed, or certified under this chapter; or
1225 (ii) required to be registered, licensed, or certified under this chapter.
1226 (b) On the basis of a ground listed in Subsection (2) for disciplinary action, board
1227 action may include:
1228 (i) revoking, suspending, or placing a person's registration, license, or certification on
1229 probation;
1230 (ii) denying a person's original registration, license, or certification;
1231 (iii) denying a person's renewal license, certification, or registration;
1232 (iv) in the case of denial or revocation of a registration, license, or certification, setting
1233 a waiting period for an applicant to apply for a registration, license, or certification under this
1234 chapter;
1235 (v) ordering remedial education;
1236 (vi) imposing a civil penalty upon a person not to exceed the greater of:
1237 (A) $5,000 for each violation; or
1238 (B) the amount of any gain or economic benefit from a violation;
1239 (vii) issuing a cease and desist order;
1240 (viii) modifying an action described in Subsections (1)(b)(i) through (vii) if the board,
1241 with the concurrence of the division, finds that the person complies with court ordered
1242 restitution; or
1243 (ix) doing any combination of Subsections (1)(b)(i) through (viii).
1244 (c) (i) If the board or division issues an order that orders a fine or educational
1245 requirements as part of the disciplinary action against a person, including a stipulation and
1246 order, the board or division shall state in the order the deadline by which the person shall
1247 comply with the fine or educational requirements.
1248 (ii) If a person fails to comply with a stated deadline:
1249 (A) the person's license, certificate, or registration is automatically suspended:
1250 (I) beginning on the day specified in the order as the deadline for compliance; and
1251 (II) ending the day on which the person complies in full with the order; and
1252 (B) if the person fails to pay a fine required by an order, the division may begin a
1253 collection process:
1254 (I) established by the division by rule made in accordance with Title 63G, Chapter 3,
1255 Utah Administrative Rulemaking Act; and
1256 (II) subject to Title 63A, Chapter 3, Part 5, Office of State Debt Collection.
1257 (2) The following are grounds for disciplinary action under this section:
1258 (a) procuring or attempting to procure a registration, license, or certification under this
1259 chapter:
1260 (i) by fraud; or
1261 (ii) by making a false statement, submitting false information, or making a material
1262 misrepresentation in an application filed with the division;
1263 (b) paying money or attempting to pay money other than a fee provided for by this
1264 chapter to a member or employee of the division to procure a registration, license, or
1265 certification under this chapter;
1266 (c) an act or omission in the practice of real estate appraising that constitutes
1267 dishonesty, fraud, or misrepresentation;
1268 (d) entry of a judgment against a registrant, licensee, or certificate holder on grounds of
1269 fraud, misrepresentation, or deceit in the making of an appraisal of real estate;
1270 [
1271
1272
1273 (e) regardless of whether the crime is related to the appraisal business, to:
1274 (i) be convicted of a felony;
1275 (ii) be convicted of any of the following involving fraud, misrepresentation, theft, or
1276 dishonesty:
1277 (A) a class A misdemeanor:
1278 (B) a class B misdemeanor; or
1279 (C) a criminal offense comparable to a class A or class B misdemeanor;
1280 (iii) plead guilty or nolo contendere to a felony;
1281 (iv) plead guilty or nolo contendere to any of the following involving fraud,
1282 misrepresentation, theft, or dishonesty:
1283 (A) a class A misdemeanor:
1284 (B) a class B misdemeanor; or
1285 (C) a criminal offense comparable to a class A or class B misdemeanor;
1286 (v) enter into a plea in abeyance agreement involving a felony; or
1287 (vi) enter into a plea in abeyance agreement involving any of the following involving
1288 fraud, misrepresentation, theft, or dishonesty:
1289 (A) a class A misdemeanor:
1290 (B) a class B misdemeanor; or
1291 (C) a criminal offense comparable to a class A or class B misdemeanor;
1292 (f) engaging in the business of real estate appraising under an assumed or fictitious
1293 name not properly registered in this state;
1294 (g) paying a finder's fee or a referral fee to a person not licensed or certified under this
1295 chapter in connection with an appraisal of real estate or real property in this state;
1296 (h) making a false or misleading statement in:
1297 (i) that portion of a written appraisal report that deals with professional qualifications;
1298 or
1299 (ii) testimony concerning professional qualifications;
1300 (i) violating or disregarding:
1301 (i) this chapter;
1302 (ii) an order of:
1303 (A) the board; or
1304 (B) the division, in a case when the board delegates to the division the authority to
1305 make a decision on behalf of the board; or
1306 (iii) a rule issued under this chapter;
1307 (j) violating the confidential nature of governmental records to which a person
1308 registered, licensed, or certified under this chapter gained access through employment or
1309 engagement as an appraiser by a governmental agency;
1310 (k) accepting a contingent fee for performing an appraisal if in fact the fee is or was
1311 contingent upon:
1312 (i) the appraiser reporting a predetermined analysis, opinion, or conclusion;
1313 (ii) the analysis, opinion, conclusion, or valuation reached; or
1314 (iii) the consequences resulting from the appraisal assignment;
1315 (l) unprofessional conduct as defined by statute or rule;
1316 (m) in the case of a dual licensed title licensee as defined in Section 31A-2-402:
1317 (i) providing a title insurance product or service without the approval required by
1318 Section 31A-2-405; or
1319 (ii) knowingly providing false or misleading information in the statement required by
1320 Subsection 31A-2-405(2); or
1321 (n) other conduct that constitutes dishonest dealing.
1322 (3) A person previously licensed, certified, or registered under this chapter remains
1323 responsible for, and is subject to disciplinary action for, an act that the person committed, while
1324 the person was licensed, certified, or registered, in violation of this chapter or an administrative
1325 rule in effect at the time that the person committed the act, regardless of whether the person is
1326 currently licensed, certified, or registered.