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7 LONG TITLE
8 General Description:
9 This bill modifies the Real Estate Code and the Real Estate Licensing and Practices
10 Act.
11 Highlighted Provisions:
12 This bill:
13 ▸ removes the 10-day reporting requirement for criminal convictions;
14 ▸ enhances penalties for violations involving vulnerable adults and adults over a
15 certain age;
16 ▸ modifies licensing fee maximums;
17 ▸ requires the Department of Real Estate to provide notice of a disciplinary
18 proceeding to the principal broker; and
19 ▸ makes technical changes.
20 Money Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 None
24 Utah Code Sections Affected:
25 AMENDS:
26 61-2c-102, as last amended by Laws of Utah 2020, Chapter 72
27 61-2c-402, as last amended by Laws of Utah 2022, Chapter 204
28 61-2f-102, as last amended by Laws of Utah 2017, Chapter 182
29 61-2f-301, as last amended by Laws of Utah 2012, Chapter 166
30 61-2f-401, as last amended by Laws of Utah 2023, Chapter 141
31 61-2f-404, as last amended by Laws of Utah 2016, Chapter 384
32 61-2g-306, as last amended by Laws of Utah 2012, Chapter 166
33 63I-2-261, as last amended by Laws of Utah 2023, Chapter 33
34
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 61-2c-102 is amended to read:
37 61-2c-102. Definitions.
38 (1) As used in this chapter:
39 (a) "Affiliation" means that a mortgage loan originator is associated with a principal
40 lending manager in accordance with Section 61-2c-209.
41 (b) "Applicant" means a person applying for a license under this chapter.
42 (c) "Approved examination provider" means a person approved by the nationwide
43 database or by the division as an approved test provider.
44 (d) "Associate lending manager" means an individual who:
45 (i) qualifies under this chapter as a principal lending manager; and
46 (ii) works by or on behalf of another principal lending manager in transacting the
47 business of residential mortgage loans.
48 (e) "Balloon payment" means a required payment in a mortgage transaction that:
49 (i) results in a greater reduction in the principle of the mortgage than a regular
50 installment payment; and
51 (ii) is made during or at the end of the term of the loan.
52 (f) "Branch lending manager" means an individual who is:
53 (i) licensed as a lending manager; and
54 (ii) designated in the nationwide database by the individual's sponsoring entity as being
55 responsible to work from a branch office and to supervise the business of residential mortgage
56 loans that is conducted at the branch office.
57 (g) "Branch office" means a licensed entity's office:
58 (i) for the transaction of the business of residential mortgage loans regulated under this
59 chapter;
60 (ii) other than the main office of the licensed entity; and
61 (iii) that operates under:
62 (A) the same business name as the licensed entity; or
63 (B) another trade name that is registered with the division under the entity license.
64 (h) "Business day" means a day other than:
65 (i) a Saturday;
66 (ii) a Sunday; or
67 (iii) a federal or state holiday.
68 (i) (i) "Business of residential mortgage loans" means for compensation or in the
69 expectation of compensation to:
70 (A) engage in an act that makes an individual a mortgage loan originator;
71 (B) make or originate a residential mortgage loan;
72 (C) directly or indirectly solicit a residential mortgage loan for another;
73 (D) unless exempt under Section 61-2c-105 or excluded under Subsection (1)(i)(ii),
74 render services related to the origination of a residential mortgage loan including:
75 (I) preparing a loan package;
76 (II) communicating with the borrower or lender;
77 (III) advising on a loan term;
78 (IV) receiving, collecting, or distributing information common for the processing or
79 underwriting of a loan in the mortgage industry; or
80 (V) communicating with a consumer to obtain information necessary for the processing
81 or underwriting of a residential mortgage loan; or
82 (E) engage in loan modification assistance.
83 (ii) "Business of residential mortgage loans" does not include:
84 (A) ownership of an entity that engages in the business of residential mortgage loans if
85 the owner does not personally perform the acts listed in Subsection (1)(i)(i);
86 (B) acting in one or more of the following capacities:
87 (I) a loan wholesaler;
88 (II) an account executive for a loan wholesaler;
89 (III) a loan closer; or
90 (IV) funding a loan; or
91 (C) if employed by a person who owns or services an existing residential mortgage
92 loan, the direct negotiation with the borrower for the purpose of loan modification.
93 (j) "Certified education provider" means a person who is certified under Section
94 61-2c-204.1 to provide Utah-specific prelicensing education.
95 (k) "Closed-end" means a loan:
96 (i) with a fixed amount borrowed; and
97 (ii) that does not permit additional borrowing secured by the same collateral.
98 (l) "Commission" means the Residential Mortgage Regulatory Commission created in
99 Section 61-2c-104.
100 (m) "Community development financial institution" means the same as that term is
101 defined in 12 U.S.C. Sec. 4702.
102 (n) "Compensation" means anything of economic value that is paid, loaned, granted,
103 given, donated, or transferred to an individual or entity for or in consideration of:
104 (i) services;
105 (ii) personal or real property; or
106 (iii) another thing of value.
107 (o) "Concurrence" means that entities given a concurring role must jointly agree for the
108 action to be taken.
109 (p) "Continuing education" means education an individual takes in order to meet the
110 education requirements imposed by Sections 61-2c-204.1 and 61-2c-205 to activate, renew, or
111 reinstate a license under this chapter.
112 (q) "Control," as used in Subsection 61-2c-105(2)(f), means the power to directly or
113 indirectly:
114 (i) direct or exercise a controlling interest over:
115 (A) the management or policies of an entity; or
116 (B) the election of a majority of the directors, officers, managers, or managing partners
117 of an entity;
118 (ii) vote 20% or more of a class of voting securities of an entity by an individual; or
119 (iii) vote more than 5% of a class of voting securities of an entity by another entity.
120 (r) (i) "Control person" means an individual identified by an entity registered with the
121 nationwide database as being an individual directing the management or policies of the entity.
122 (ii) "Control person" may include one of the following who is identified as provided in
123 Subsection (1)(r)(i):
124 (A) a manager;
125 (B) a managing partner;
126 (C) a director;
127 (D) an executive officer; or
128 (E) an individual who performs a function similar to an individual listed in this
129 Subsection (1)(r)(ii).
130 (s) "Depository institution" means the same as that term is defined in Section 7-1-103.
131 (t) "Director" means the director of the division.
132 (u) "Division" means the Division of Real Estate.
133 (v) "Dwelling" means a residential structure attached to real property that contains one
134 to four family units including any of the following if used as a residence:
135 (i) a condominium unit;
136 (ii) a cooperative unit;
137 (iii) a manufactured home; or
138 (iv) a house.
139 (w) "Employee":
140 (i) means an individual:
141 (A) whose manner and means of work performance are subject to the right of control
142 of, or are controlled by, another person; and
143 (B) whose compensation for federal income tax purposes is reported, or is required to
144 be reported, on a W-2 form issued by the controlling person; and
145 (ii) does not include an independent contractor who performs duties other than at the
146 direction of, and subject to the supervision and instruction of, another person.
147 (x) "Entity" means:
148 (i) a corporation;
149 (ii) a limited liability company;
150 (iii) a partnership;
151 (iv) a company;
152 (v) an association;
153 (vi) a joint venture;
154 (vii) a business trust;
155 (viii) a trust; or
156 (ix) another organization.
157 (y) "Executive director" means the executive director of the Department of Commerce.
158 (z) "Federal licensing requirements" means Secure and Fair Enforcement for Mortgage
159 Licensing, 12 U.S.C. Sec. 5101 et seq.
160 (aa) "Foreclosure rescue" means, for compensation or with the expectation of receiving
161 valuable consideration, to:
162 (i) engage, or offer to engage, in an act that:
163 (A) the person represents will assist a borrower in preventing a foreclosure; and
164 (B) relates to a transaction involving the transfer of title to residential real property; or
165 (ii) as an employee or agent of another person:
166 (A) solicit, or offer that the other person will engage in an act described in Subsection
167 (1)(aa)(i); or
168 (B) negotiate terms in relationship to an act described in Subsection (1)(aa)(i).
169 (bb) "Inactive status" means a dormant status into which an unexpired license is placed
170 when the holder of the license is not currently engaging in the business of residential mortgage
171 loans.
172 (cc) "Lending manager" means an individual licensed as a lending manager under
173 Section 61-2c-206 to transact the business of residential mortgage loans.
174 (dd) "Licensee" means a person licensed with the division under this chapter.
175 (ee) "Licensing examination" means the examination required by Section 61-2c-204.1
176 or 61-2c-206 for an individual to obtain a license under this chapter.
177 (ff) "Loan modification assistance" means, for compensation or with the expectation of
178 receiving valuable consideration, to:
179 (i) act, or offer to act, on behalf of a person to:
180 (A) obtain a loan term of a residential mortgage loan that is different from an existing
181 loan term including:
182 (I) an increase or decrease in an interest rate;
183 (II) a change to the type of interest rate;
184 (III) an increase or decrease in the principal amount of the residential mortgage loan;
185 (IV) a change in the number of required period payments;
186 (V) an addition of collateral;
187 (VI) a change to, or addition of, a prepayment penalty;
188 (VII) an addition of a cosigner; or
189 (VIII) a change in persons obligated under the existing residential mortgage loan; or
190 (B) substitute a new residential mortgage loan for an existing residential mortgage
191 loan; or
192 (ii) as an employee or agent of another person:
193 (A) solicit, or offer that the other person will engage in an act described in Subsection
194 (1)(ff)(i); or
195 (B) negotiate terms in relationship to an act described in Subsection (1)(ff)(i).
196 (gg) (i) "Mortgage loan originator" means an individual who, for compensation or in
197 expectation of compensation:
198 (A) (I) takes a residential mortgage loan application;
199 (II) offers or negotiates terms of a residential mortgage loan for the purpose of:
200 (Aa) a purchase;
201 (Bb) a refinance;
202 (Cc) a loan modification assistance; or
203 (Dd) a foreclosure rescue; or
204 (III) directly or indirectly solicits a residential mortgage loan for another person; and
205 (B) is licensed as a mortgage loan originator in accordance with this chapter.
206 (ii) "Mortgage loan originator" does not include a person who:
207 (A) is described in Subsection (1)(gg)(i), but who performs exclusively administrative
208 or clerical tasks as described in Subsection (1)(i)(ii)(A);
209 (B) (I) is licensed under Chapter 2f, Real Estate Licensing and Practices Act;
210 (II) performs only real estate brokerage activities; and
211 (III) receives no compensation from:
212 (Aa) a lender;
213 (Bb) a lending manager; or
214 (Cc) an agent of a lender or lending manager; or
215 (C) is solely involved in extension of credit relating to a timeshare plan, as defined in
216 11 U.S.C. Sec. 101(53D).
217 (hh) "Nationwide database" means the Nationwide Mortgage Licensing System and
218 Registry, authorized under federal licensing requirements.
219 (ii) "Nontraditional mortgage product" means a mortgage product other than a 30-year
220 fixed rate mortgage.
221 (jj) "Person" means an individual or entity.
222 (kk) "Prelicensing education" means education taken by an individual seeking to be
223 licensed under this chapter in order to meet the education requirements imposed by Section
224 61-2c-204.1 or 61-2c-206 for an individual to obtain a license under this chapter.
225 (ll) "Principal lending manager" means an individual:
226 (i) licensed as a lending manager under Section 61-2c-206; and
227 (ii) identified in the nationwide database by the individual's sponsoring entity as the
228 entity's principal lending manager.
229 (mm) "Prospective borrower" means a person applying for a mortgage from a person
230 who is required to be licensed under this chapter.
231 (nn) "Record" means information that is:
232 (i) prepared, owned, received, or retained by a person; and
233 (ii) (A) inscribed on a tangible medium; or
234 (B) (I) stored in an electronic or other medium; and
235 (II) in a perceivable and reproducible form.
236 (oo) "Residential mortgage loan" means an extension of credit, if:
237 (i) the loan or extension of credit is secured by a:
238 (A) mortgage;
239 (B) deed of trust; or
240 (C) consensual security interest; and
241 (ii) the mortgage, deed of trust, or consensual security interest described in Subsection
242 (1)(oo)(i):
243 (A) is on a dwelling located in the state; and
244 (B) is created with the consent of the owner of the residential real property.
245 (pp) "Section 8 of RESPA" means 12 U.S.C. Sec. 2607 and any rules made thereunder.
246 (qq) "Settlement" means the time at which each of the following is complete:
247 (i) the borrower and, if applicable, the seller sign and deliver to each other or to the
248 escrow or closing office each document required by:
249 (A) the real estate purchase contract;
250 (B) the lender;
251 (C) the title insurance company;
252 (D) the escrow or closing office;
253 (E) the written escrow instructions; or
254 (F) applicable law;
255 (ii) the borrower delivers to the seller, if applicable, or to the escrow or closing office
256 any money, except for the proceeds of any new loan, that the borrower is required to pay; and
257 (iii) if applicable, the seller delivers to the buyer or to the escrow or closing office any
258 money that the seller is required to pay.
259 (rr) "Settlement services" means a service provided in connection with a real estate
260 settlement, including a title search, a title examination, the provision of a title certificate,
261 services related to title insurance, services rendered by an attorney, preparing documents, a
262 property survey, rendering a credit report or appraisal, a pest or fungus inspection, services
263 rendered by a real estate agent or broker, the origination of a federally related mortgage loan,
264 and the processing of a federally related mortgage.
265 (ss) "Sponsorship" means an association in accordance with Section 61-2c-209
266 between an individual licensed under this chapter and an entity licensed under this chapter.
267 (tt) "State" means:
268 (i) a state, territory, or possession of the United States;
269 (ii) the District of Columbia; or
270 (iii) the Commonwealth of Puerto Rico.
271 (uu) "Uniform state test" means the uniform state content section of the qualified
272 written test developed by the nationwide database.
273 (vv) "Unique identifier" means the same as that term is defined in 12 U.S.C. Sec. 5102.
274 (ww) "Utah-specific" means an educational requirement under this chapter that relates
275 specifically to Utah.
276 (xx) "Vulnerable adult" means the same as that term is defined in Section 26B-6-201.
277 (2) (a) If a term not defined in this section is defined by rule, the term shall have the
278 meaning established by the division by rule made in accordance with Title 63G, Chapter 3,
279 Utah Administrative Rulemaking Act.
280 (b) If a term not defined in this section is not defined by rule, the term shall have the
281 meaning commonly accepted in the business community.
282 Section 2. Section 61-2c-402 is amended to read:
283 61-2c-402. Disciplinary action.
284 (1) Subject to the requirements of Section 61-2c-402.1, the commission, with the
285 concurrence of the division, may impose a sanction described in Subsection (2) against a
286 person if the person:
287 (a) (i) is a licensee or a person required to be licensed under this chapter; and
288 (ii) violates this chapter; or
289 (b) (i) is not registered under this chapter; and
290 (ii) violated a provision of this chapter during a period in which:
291 (A) the provision of this chapter was in effect; and
292 (B) the person was registered or required to be registered under this chapter; or
293 (c) (i) is a certified education provider or person required to be certified to provide
294 prelicensing or continuing education under this chapter; and
295 (ii) violates this chapter.
296 (2) The commission, with the concurrence of the director, may against a person
297 described in Subsection (1):
298 (a) impose an educational requirement;
299 (b) impose a civil penalty against the individual or entity in an amount not to exceed
300 the greater of:
301 (i) except as provided in Subsection (2)(b)(ii), $5,000 for each violation;
302 (ii) $10,000 for each violation, if the person knew or should have known that the
303 property owner was an individual 65 years old or older, or a vulnerable adult; or
304 [
305 violation;
306 (c) deny an application for an original license;
307 (d) do any of the following to a license under this chapter:
308 (i) suspend;
309 (ii) revoke;
310 (iii) place on probation;
311 (iv) reduce a lending manager license to a loan originator license;
312 (v) deny renewal;
313 (vi) deny reinstatement; or
314 (vii) in the case of a denial of a license or a suspension that extends to the expiration
315 date of a license, set a waiting period for a person to apply for a license under this chapter;
316 (e) issue a cease and desist order;
317 (f) require the reimbursement of the division of costs incurred by the division related to
318 the recovery, storage, or destruction of a record that the person disposes of in a manner that
319 violates this chapter or a rule made under this chapter;
320 (g) modify a sanction described in Subsections (2)(a) through (f) if the commission
321 finds that the person complies with court ordered restitution; or
322 (h) impose any combination of sanctions described in this Subsection (2).
323 (3) (a) If the commission, with the concurrence of the division, issues an order that
324 orders a fine or educational requirements as part of a disciplinary action against a person,
325 including a stipulation and order, the commission shall state in the order the deadline by which
326 the person shall comply with the fine or educational requirements.
327 (b) If a person fails to comply with a stated deadline:
328 (i) the person's license or certificate is automatically suspended:
329 (A) beginning the day specified in the order as the deadline for compliance; and
330 (B) ending the day on which the person complies in full with the order; and
331 (ii) if the person fails to pay a fine required by an order, the division may begin a
332 collection process:
333 (A) established by the division by rule made in accordance with Title 63G, Chapter 3,
334 Utah Administrative Rulemaking Act; and
335 (B) subject to Title 63A, Chapter 3, Part 5, Office of State Debt Collection.
336 (4) (a) A person whose license was revoked under this chapter before May 11, 2010,
337 may request that the revocation be converted to a suspension under this Subsection (4):
338 (i) if the revocation was not as a result of a felony conviction involving fraud,
339 misrepresentation, deceit, dishonesty, breach of trust, or money laundering; and
340 (ii) by filing a written request with the division.
341 (b) Upon receipt of a request to convert a revocation under this Subsection (4), the
342 commission, with the concurrence of the director, shall determine whether to convert the
343 revocation.
344 (c) The commission may delegate to the division the authority to [
345 decide whether to convert a revocation.
346 (d) If the division, acting under Subsection (4)(c), denies a request to convert a
347 revocation, the person who requests the conversion may appeal the decision in a hearing
348 conducted by the commission:
349 (i) after the division denies the request to convert the revocation; and
350 (ii) in accordance with Title 63G, Chapter 4, Administrative Procedures Act.
351 (e) The commission may delegate to the division or an administrative law judge the
352 authority to conduct a hearing described in Subsection (4)(d).
353 (5) (a) A person whose license the commission revokes in accordance with this section
354 may file a written request with the division for the vacation of the license revocation, if the
355 person:
356 (i) has not held a license under this chapter for at least eight years before the day on
357 which the person files the request; and
358 (ii) has not been convicted of a felony involving:
359 (A) fraud;
360 (B) misrepresentation;
361 (C) deceit;
362 (D) dishonesty;
363 (E) breach of trust; or
364 (F) money laundering.
365 (b) After receiving a written request a person makes in accordance with Subsection
366 (5)(a), the commission may vacate the revocation of the person's license:
367 (i) after a hearing; and
368 (ii) with the concurrence of the division.
369 (c) A person whose license revocation is vacated in accordance with this Subsection
370 (5) may apply for licensure in accordance with this chapter.
371 Section 3. Section 61-2f-102 is amended to read:
372 61-2f-102. Definitions.
373 As used in this chapter:
374 (1) "Associate broker" means an individual who is:
375 (a) employed or engaged as an independent contractor by or on behalf of a principal
376 broker to perform an act described in Subsection (20) for valuable consideration; and
377 (b) licensed under this chapter as an associate broker.
378 (2) "Branch broker" means an associate broker who manages a principal broker's
379 branch office under the supervision of the principal broker.
380 (3) "Branch office" means a principal broker's real estate brokerage office that is not
381 the principal broker's main office.
382 (4) "Business day" means a day other than:
383 (a) a Saturday;
384 (b) a Sunday; or
385 (c) a federal or state holiday.
386 (5) "Business opportunity" means the sale, lease, or exchange of any business that
387 includes an interest in real estate.
388 (6) "Commission" means the Real Estate Commission established under this chapter.
389 (7) "Concurrence" means the entities given a concurring role must jointly agree for
390 action to be taken.
391 (8) "Condominium homeowners' association" means the condominium unit owners
392 acting as a group in accordance with declarations and bylaws.
393 (9) (a) "Condominium hotel" means one or more condominium units that are operated
394 as a hotel.
395 (b) "Condominium hotel" does not mean a hotel consisting of condominium units, all
396 of which are owned by a single entity.
397 (10) "Condominium unit" means the same as that term is defined in Section 57-8-3.
398 (11) "Director" means the director of the Division of Real Estate.
399 (12) "Division" means the Division of Real Estate.
400 (13) "Dual broker" means a principal broker of a real estate sales brokerage who
401 obtains from the division a dual broker license in order to function as the principal broker of a
402 property management company that is a separate entity from the real estate sales brokerage.
403 (14) "Entity" means:
404 (a) a corporation;
405 (b) a partnership;
406 (c) a limited liability company;
407 (d) a company;
408 (e) an association;
409 (f) a joint venture;
410 (g) a business trust;
411 (h) a trust; or
412 (i) any organization similar to an entity described in Subsections (14)(a) through (h).
413 (15) "Executive director" means the director of the Department of Commerce.
414 (16) "Foreclosure rescue" means, for compensation or with the expectation of receiving
415 valuable consideration, to:
416 (a) engage, or offer to engage, in an act that:
417 (i) the person represents will assist a borrower in preventing a foreclosure; and
418 (ii) relates to a transaction involving the transfer of title to residential real property; or
419 (b) as an employee or agent of another person:
420 (i) solicit, or offer that the other person will engage in an act described in Subsection
421 (16)(a); or
422 (ii) negotiate terms in relationship to an act described in Subsection (16)(a).
423 (17) "Loan modification assistance" means, for compensation or with the expectation
424 of receiving valuable consideration, to:
425 (a) act, or offer to act, on behalf of a person to:
426 (i) obtain a loan term of a residential mortgage loan that is different from an existing
427 loan term including:
428 (A) an increase or decrease in an interest rate;
429 (B) a change to the type of interest rate;
430 (C) an increase or decrease in the principal amount of the residential mortgage loan;
431 (D) a change in the number of required period payments;
432 (E) an addition of collateral;
433 (F) a change to, or addition of, a prepayment penalty;
434 (G) an addition of a cosigner; or
435 (H) a change in persons obligated under the existing residential mortgage loan; or
436 (ii) substitute a new residential mortgage loan for an existing residential mortgage loan;
437 or
438 (b) as an employee or agent of another person:
439 (i) solicit, or offer that the other person will engage in an act described in Subsection
440 (17)(a); or
441 (ii) negotiate terms in relationship to an act described in Subsection (17)(a).
442 (18) "Main office" means the address which a principal broker designates with the
443 division as the principal broker's primary brokerage office.
444 (19) "Person" means an individual or entity.
445 (20) "Principal broker" means an individual who is licensed or required to be licensed
446 as a principal broker under this chapter who:
447 (a) sells or lists for sale real estate, including real estate being sold as part of a
448 foreclosure rescue, or a business opportunity with the expectation of receiving valuable
449 consideration;
450 (b) buys, exchanges, or auctions real estate, an option on real estate, a business
451 opportunity, or an improvement on real estate with the expectation of receiving valuable
452 consideration;
453 (c) advertises, offers, attempts, or otherwise holds the individual out to be engaged in
454 the business described in Subsection (20)(a) or (b);
455 (d) is employed by or on behalf of the owner of real estate or by a prospective
456 purchaser of real estate and performs an act described in Subsection (20)(a), whether the
457 individual's compensation is at a stated salary, a commission basis, upon a salary and
458 commission basis, or otherwise;
459 (e) with the expectation of receiving valuable consideration, manages property owned
460 by another person;
461 (f) advertises or otherwise holds the individual out to be engaged in property
462 management;
463 (g) with the expectation of receiving valuable consideration, assists or directs in the
464 procurement of prospects for or the negotiation of a transaction listed in Subsections (20)(a)
465 and (e);
466 (h) except for a mortgage lender, title insurance producer, or an employee of a
467 mortgage lender or title insurance producer, assists or directs in the closing of a real estate
468 transaction with the expectation of receiving valuable consideration;
469 (i) engages in foreclosure rescue; or
470 (j) advertises, offers, attempts, or otherwise holds the person out as being engaged in
471 foreclosure rescue.
472 (21) (a) "Property management" means engaging in, with the expectation of receiving
473 valuable consideration, the management of real estate owned by another person or advertising
474 or otherwise claiming to be engaged in property management by:
475 (i) advertising for, arranging, negotiating, offering, or otherwise attempting or
476 participating in a transaction calculated to secure the rental or leasing of real estate;
477 (ii) collecting, agreeing, offering, or otherwise attempting to collect rent for the real
478 estate and accounting for and disbursing the money collected; or
479 (iii) authorizing expenditures for repairs to the real estate.
480 (b) "Property management" does not include:
481 (i) hotel or motel management;
482 (ii) rental of tourist accommodations, including hotels, motels, tourist homes,
483 condominiums, condominium hotels, mobile home park accommodations, campgrounds, or
484 similar public accommodations for a period of less than 30 consecutive days, and the
485 management activities associated with these rentals; or
486 (iii) the leasing or management of surface or subsurface minerals or oil and gas
487 interests, if the leasing or management is separate from a sale or lease of the surface estate.
488 (22) "Property management sales agent" means a sales agent who:
489 (a) is affiliated with a dual broker through the dual broker's property management
490 company; and
491 (b) is designated by the dual broker as a property management sales agent.
492 (23) "Real estate" includes leaseholds and business opportunities involving real
493 property.
494 (24) (a) "Regular salaried employee" means an individual who performs a service for
495 wages or other remuneration, whose employer withholds federal employment taxes under a
496 contract of hire, written or oral, express or implied.
497 (b) "Regular salaried employee" does not include an individual who performs services
498 on a project-by-project basis or on a commission basis.
499 (25) "Reinstatement" means restoring a license that has expired or has been suspended.
500 (26) "Reissuance" means the process by which a licensee may obtain a license
501 following revocation of the license.
502 (27) "Renewal" means extending a license for an additional licensing period on or
503 before the date the license expires.
504 (28) "Sales agent" means an individual who is:
505 (a) affiliated with a principal broker, either as an independent contractor or an
506 employee as provided in Section 61-2f-303, to perform for valuable consideration an act
507 described in Subsection (20); and
508 (b) licensed under this chapter as a sales agent.
509 (29) "Vulnerable adult" means the same as that term is defined in Section 26B-6-201.
510 Section 4. Section 61-2f-301 is amended to read:
511 61-2f-301. Reporting requirements.
512 (1) A licensee shall notify the division of the following by sending the division a
513 signed statement within 10 business days [
514 [
515 [
516 [
517
518
519 [
520
521 [
522 [
523
524 [
525 principal broker;
526 [
527 registration of the licensee that is necessary to engage in an occupation or profession is
528 suspended, revoked, surrendered, canceled, or denied, regardless of whether the license or
529 registration is issued by this state or another jurisdiction; or
530 [
531 is issued:
532 (i) against the licensee by a court or administrative agency; and
533 (ii) on the basis of:
534 (A) conduct or a practice involving the business of real estate; or
535 (B) conduct involving fraud, misrepresentation, or deceit.
536 (2) The commission, with the concurrence of the director, shall enforce the reporting
537 requirement under this section pursuant to Section 61-2f-404.
538 Section 5. Section 61-2f-401 is amended to read:
539 61-2f-401. Grounds for disciplinary action.
540 The following acts are unlawful and grounds for disciplinary action for a person
541 licensed or required to be licensed under this chapter:
542 (1) (a) making a substantial misrepresentation, including in a licensure statement;
543 (b) making an intentional misrepresentation;
544 (c) pursuing a continued and flagrant course of misrepresentation;
545 (d) making a false representation or promise through an agent, sales agent, advertising,
546 or otherwise; or
547 (e) making a false representation or promise of a character likely to influence,
548 persuade, or induce;
549 (2) acting for more than one party in a transaction without the informed written consent
550 of the parties;
551 (3) (a) acting as an associate broker or sales agent while not affiliated with a principal
552 broker;
553 (b) representing or attempting to represent a principal broker other than the principal
554 broker with whom the person is affiliated; or
555 (c) representing as sales agent or having a contractual relationship similar to that of
556 sales agent with a person other than a principal broker;
557 (4) (a) failing, within a reasonable time, to account for or to remit money that belongs
558 to another and comes into the person's possession;
559 (b) commingling money described in Subsection (4)(a) with the person's own money;
560 or
561 (c) diverting money described in Subsection (4)(a) from the purpose for which the
562 money is received;
563 (5) paying or offering to pay valuable consideration to a person not licensed under this
564 chapter, except that valuable consideration may be shared:
565 (a) with a principal broker of another jurisdiction; or
566 (b) as provided under:
567 (i) Title 16, Chapter 10a, Utah Revised Business Corporation Act;
568 (ii) Title 16, Chapter 11, Professional Corporation Act; or
569 (iii) Title 48, Chapter 3a, Utah Revised Uniform Limited Liability Company Act, as
570 appropriate pursuant to Section 48-3a-1405;
571 (6) for a principal broker, paying or offering to pay a sales agent or associate broker
572 who is not affiliated with the principal broker at the time the sales agent or associate broker
573 earned the compensation;
574 (7) being incompetent to act as a principal broker, associate broker, or sales agent in
575 such manner as to safeguard the interests of the public;
576 (8) failing to voluntarily furnish a copy of a document to the parties before and after the
577 execution of a document;
578 (9) failing to keep and make available for inspection by the division a record of each
579 transaction, including:
580 (a) the names of buyers and sellers or lessees and lessors;
581 (b) the identification of real estate;
582 (c) the sale or rental price;
583 (d) money received in trust;
584 (e) agreements or instructions from buyers and sellers or lessees and lessors; and
585 (f) any other information required by rule;
586 (10) failing to disclose, in writing, in the purchase, sale, or rental of real estate, whether
587 the purchase, sale, or rental is made for that person or for an undisclosed principal;
588 (11) regardless of whether the crime is related to the business of real estate:
589 (a) be convicted of:
590 (i) a felony; or
591 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
592 (A) a class A misdemeanor;
593 (B) a class B misdemeanor; or
594 (C) a criminal offense comparable to a class A or class B misdemeanor;
595 (b) plead guilty or nolo contendere to:
596 (i) a felony; or
597 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
598 (A) a class A misdemeanor;
599 (B) a class B misdemeanor; or
600 (C) a criminal offense comparable to a class A or class B misdemeanor;
601 (c) enter into a plea in abeyance agreement in relation to:
602 (i) a felony; or
603 (ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
604 (A) a class A misdemeanor;
605 (B) a class B misdemeanor; or
606 (C) a criminal offense comparable to a class A or class B misdemeanor;
607 (12) advertising the availability of real estate or the services of a licensee in a false,
608 misleading, or deceptive manner;
609 (13) in the case of a principal broker or a branch broker, failing to exercise active and
610 reasonable supervision, as the commission may define by rule made in accordance with Title
611 63G, Chapter 3, Utah Administrative Rulemaking Act, over the activities of the principal
612 broker's or branch broker's licensed or unlicensed staff;
613 (14) violating or disregarding:
614 (a) this chapter;
615 (b) an order of the commission; or
616 (c) the rules adopted by the commission and the division;
617 (15) breaching a fiduciary duty owed by a licensee to the licensee's principal in a real
618 estate transaction;
619 (16) any other conduct which constitutes dishonest dealing;
620 (17) having one of the following suspended, revoked, surrendered, or cancelled on the
621 basis of misconduct in a professional capacity that relates to character, honesty, integrity, or
622 truthfulness:
623 (a) a real estate license, registration, or certificate issued by another jurisdiction; or
624 (b) another license, registration, or certificate to engage in an occupation or profession
625 issued by this state or another jurisdiction;
626 (18) failing to respond to a request by the division in an investigation authorized under
627 this chapter within 10 days after the day on which the request is served, including:
628 (a) failing to respond to a subpoena;
629 (b) withholding evidence; or
630 (c) failing to produce documents or records;
631 (19) in the case of a dual licensed title licensee as defined in Section 31A-2-402:
632 (a) providing a title insurance product or service without the approval required by
633 Section 31A-2-405; or
634 (b) knowingly providing false or misleading information in the statement required by
635 Subsection 31A-2-405(2);
636 (20) violating an independent contractor agreement between a principal broker and a
637 sales agent or associate broker as evidenced by a final judgment of a court;
638 (21) violating Title 57, Chapter 30, Residential Property Service Agreements;
639 (22) (a) engaging in an act of loan modification assistance that requires licensure as a
640 mortgage officer under Chapter 2c, Utah Residential Mortgage Practices and Licensing Act,
641 without being licensed under that chapter;
642 (b) engaging in an act of foreclosure rescue without entering into a written agreement
643 specifying what one or more acts of foreclosure rescue will be completed;
644 (c) inducing a person who is at risk of foreclosure to hire the licensee to engage in an
645 act of foreclosure rescue by:
646 (i) suggesting to the person that the licensee has a special relationship with the person's
647 lender or loan servicer; or
648 (ii) falsely representing or advertising that the licensee is acting on behalf of:
649 (A) a government agency;
650 (B) the person's lender or loan servicer; or
651 (C) a nonprofit or charitable institution; or
652 (d) recommending or participating in a foreclosure rescue that requires a person to:
653 (i) transfer title to real estate to the licensee or to a third-party with whom the licensee
654 has a business relationship or financial interest;
655 (ii) make a mortgage payment to a person other than the person's loan servicer; or
656 (iii) refrain from contacting the person's:
657 (A) lender;
658 (B) loan servicer;
659 (C) attorney;
660 (D) credit counselor; or
661 (E) housing counselor;
662 (23) taking or removing from the premises of a main office or a branch office, or
663 otherwise limiting a real estate brokerage's access to or control over, a record that:
664 (a) (i) the real estate brokerage's licensed staff, unlicensed staff, or affiliated
665 independent contractor prepared; and
666 (ii) is related to the business of:
667 (A) the real estate brokerage; or
668 (B) an associate broker, a branch broker, or a sales agent of the real estate brokerage; or
669 (b) is related to the business administration of the real estate brokerage;
670 (24) as a principal broker, placing a lien on real property, unless authorized by law;
671 (25) as a sales agent or associate broker, placing a lien on real property for an unpaid
672 commission or other compensation related to real estate brokerage services; or
673 (26) failing to timely disclose to a buyer or seller an affiliated business arrangement, as
674 defined in Section 31A-23a-1001, in accordance with the federal Real Estate Settlement
675 Procedures Act, 12 U.S.C. Sec. 2601 et seq. and any rules made thereunder.
676 Section 6. Section 61-2f-404 is amended to read:
677 61-2f-404. Disciplinary action -- Judicial review.
678 (1) (a) On the basis of a violation of this chapter, the commission with the concurrence
679 of the director, may issue an order:
680 (i) imposing an educational requirement;
681 (ii) imposing a civil penalty not to exceed the greater of:
682 (A) except as provided in Subsection (1)(a)(ii)(B), $5,000 for each violation; [
683 (B) $10,000 for each violation, if the person knew or should have known that the
684 property owner was an individual 65 years old or older, or a vulnerable adult; or
685 [
686 (iii) taking any of the following actions related to a license, registration, or certificate:
687 (A) revoking;
688 (B) suspending;
689 (C) placing on probation;
690 (D) denying the renewal, reinstatement, or application for an original license,
691 registration, or certificate; or
692 (E) in the case of denial or revocation of a license, registration, or certificate, setting a
693 waiting period for an applicant to apply for a license, registration, or certificate under this title;
694 (iv) issuing a cease and desist order;
695 (v) modifying an action described in Subsections (1)(a)(i) through (iv) if the
696 commission finds that the person complies with court ordered restitution; or
697 (vi) doing any combination of Subsections (1)(a)(i) through (v).
698 (b) (i) If the commission with the concurrence of the director issues an order that
699 orders a fine or educational requirements as part of a disciplinary action against a person,
700 including a stipulation and order, the commission shall state in the order the deadline by which
701 the person shall comply with the fine or educational requirements.
702 (ii) If a person fails to comply by the stated deadline:
703 (A) the person's license, registration, or certificate is automatically suspended:
704 (I) beginning the day specified in the order as the deadline for compliance; and
705 (II) ending the day on which the person complies in full with the order; and
706 (B) if the person fails to pay a fine required by an order, the division may begin a
707 collection process:
708 (I) established by the division, with the concurrence of the commission, by rule made
709 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
710 (II) subject to Title 63A, Chapter 3, Part 5, Office of State Debt Collection.
711 (c) [
712 determined by the division, the division shall inform [
713 (i) with whom [
714 (A) [
715 written response from the licensee;
716 (B) a violation alleged against the licensee by the division;
717 (C) [
718 and
719 (D) the resolution of a violation alleged described in Subsection (1)(c)(i)(B); and
720 (ii) upon inquiry from a principal broker regarding an affiliated licensee:
721 (A) disciplinary actions made by the division against the licensee for the past five
722 years; and
723 (B) the resolution of the disciplinary actions described in Subsection (1)(c)(ii)(A).
724 (d) A person previously licensed under this chapter remains responsible for, and is
725 subject to disciplinary action for, an act the person committed while the person was licensed in
726 violation of this chapter or an administrative rule in effect at the time the person committed the
727 act, regardless of whether the person is currently licensed.
728 (2) (a) An applicant, certificate holder, licensee, registrant, or person aggrieved,
729 including the complainant, may obtain agency review by the executive director and judicial
730 review of any adverse ruling, order, or decision of the division.
731 (b) If an applicant, certificate holder, registrant, or licensee prevails in the appeal and
732 the court finds that the state action was undertaken without substantial justification, the court
733 may award reasonable litigation expenses to the applicant, certificate holder, registrant, or
734 licensee as provided under Title 78B, Chapter 8, Part 5, Small Business Equal Access to
735 Justice Act.
736 (c) (i) An order, ruling, or decision of the division shall take effect and become
737 operative 30 days after the service of the order, ruling, or decision unless otherwise provided in
738 the order.
739 (ii) If an appeal is taken by a licensee, registrant, or certificate holder, the division may
740 stay enforcement of an order, ruling, or decision in accordance with Section 63G-4-405.
741 (iii) An appeal is governed by the Utah Rules of Appellate Procedure.
742 (3) The commission and the director shall comply with the procedures and
743 requirements of Title 63G, Chapter 4, Administrative Procedures Act, in an adjudicative
744 proceeding.
745 Section 7. Section 61-2g-306 is amended to read:
746 61-2g-306. Renewal of license, certification, or registration.
747 (1) To renew a license, certification, or registration, before the license, certification, or
748 registration expires, the holder of the license, certification, or registration shall submit to the
749 division in compliance with procedures set through the concurrence of the division and the
750 board:
751 (a) an application for renewal;
752 (b) a fee established by the division and the board, in accordance with Section
753 63J-1-504; and
754 (c) evidence in the form prescribed by the division of having completed the continuing
755 education requirements for renewal specified in this chapter.
756 (2) (a) A license, certification, or registration expires if it is not renewed on or before
757 its expiration date.
758 (b) For a period of 30 days after the expiration date, a license, certification, or
759 registration may be reinstated upon:
760 (i) payment of a renewal fee and a late fee determined through the concurrence of the
761 division and the board; and
762 (ii) satisfying the continuing education requirements specified in Section 61-2g-307.
763 (c) After the 30-day period described in Subsection (2)(b), and until six months after
764 the expiration date, a license, certification, or registration may be reinstated by:
765 (i) paying a renewal fee and a reinstatement fee determined through the concurrence of
766 the division and the board; and
767 (ii) satisfying the continuing education requirements specified in Section 61-2g-307.
768 (d) After the six-month period described in Subsection (2)(c), and until one year after
769 the expiration date, a license, certification, or registration may be reinstated by:
770 (i) paying a renewal fee and a reinstatement fee determined through the concurrence of
771 the division and the board in accordance with Section 63J-1-504;
772 (ii) providing proof acceptable to the division, with the concurrence of the board, of the
773 person having satisfied the continuing education requirements of Section 61-2g-307; and
774 (iii) providing proof acceptable to the division, with the concurrence of the board, of
775 the person completing 24 hours of continuing education:
776 (A) in addition to the requirements in Section 61-2g-307; and
777 (B) on a subject determined by the division by rule made in accordance with Title 63G,
778 Chapter 3, Utah Administrative Rulemaking Act.
779 (e) The division shall relicense, recertify, or reregister a person who does not renew
780 that person's license, certification, or registration within one year after the expiration date as
781 prescribed for an original application.
782 (f) Notwithstanding Subsection (2)(a), the division may extend the term of a license,
783 certification, or registration that would expire under Subsection (2)(a) except for the extension
784 if:
785 (i) (A) the person complies with the requirements of this section to renew the license,
786 certification, or registration; and
787 (B) the application for renewal remains pending at the time of the extension; or
788 (ii) at the time of the extension, there is pending under this chapter a disciplinary
789 action.
790 (3) A person who is licensed, certified, or registered under this chapter shall notify the
791 division of the following by sending the division a signed statement within 10 business days
792 [
793 [
794 [
795 [
796
797
798 [
799
800 [
801 [
802
803 [
804 professional license, certification, or registration [
805 surrendered, canceled, or denied, regardless of whether the license, certification, or registration
806 is issued by this state or another jurisdiction; or
807 [
808 is entered:
809 (i) against the person by a court or administrative agency; and
810 (ii) on the basis of:
811 (A) conduct or a practice involving an act regulated by this chapter; or
812 (B) conduct involving fraud, misrepresentation, or deceit.
813 (4) The board, with the concurrence of the division, shall enforce the reporting
814 requirement of Subsection (3) pursuant to Section 61-2g-502.
815 Section 8. Section 63I-2-261 is amended to read:
816 63I-2-261. Repeal dates: Title 61.
817 [
818 Section 9. Effective date.
819 This bill takes effect on May 1, 2024.