utah department of commerce division of real estatebrokerage or, as applicable, the property...

160 E 300 S, SLC UT 84111

(801) 530 6747

[email protected]

www.realestate.utah.gov Division of Real EstateUtah Department of Commerce

Gary R. Herbert, Governor Francine A. Giani, Executive Director Jonathan Stewart, Division Director

Director’s Message…………………..1-2Mortgage License Renewal . . . . .. . . .3-4Mortgage Fingerprint/Credit Reports…5In Memory of Jan Buchi…………………6Home Warranty Products………………6L. Paul Smith, UT Apartment Assoc..7-9Scam Alerts…………………………….. 9Rule Developments………………….. 10Referral Fees From Lenders ..……… 11Licensing & Disciplinary Actions…12-15Welcome Kay Ashton ...………………13Kagie’s Korner ………………………..16Questions?..………………………. 17-18Instructor Development Workshop…..19Division Document Requests……….. 20Welcome Lark Martinez .……………. 20Auctions: Change May Be Coming….21

In This Issue

I was recently asked about usinga nickname or a name other thana “given name” in advertising.This issue comes up from time-to-time. What is required by law?

Director’s Message

Real EstateR162-2f-401h, Requirements andRestrictions in Advertising, states:

(1) Advertising shall in-clude the name of the real estatebrokerage or, as applicable, theproperty management brokerageas shown on division records…

As you can see from this adminis-trative rule, there is a requirementto advertise under the real estateor property management broker-age as shown on the division re-cords. When applying for alicense, we do require that youprovide us with your full givenname, which is what will beplaced on the Division recordsand on your license. However,there is no requirement in statute

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Third Quarter 2015

Jonathan Stewart

What Is Your Name?

Division of Real Estate

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or rule about using your full given name in advertising.For example, my given name is Jonathan, but I havealways gone by Jonny. If I were a licensed real estateagent or broker, I could advertise using the nameJonny.

MortgageR162-2c-209, Sponsorship, states:

(1) A mortgage loan originator who issponsored by an entity may operate andadvertise under the name of:

(a) the entity; (b) a branch office registered under the license of the entity; or (c) another trade name registered under the license of the entity.

Once again, there is no requirement about the use of anindividual’s name in advertising. If a mortgage licenseeis advertising, they are only required to advertise usingeither the entity name, a branch office name (that hasbeen registered), or another trade name (that has beenregistered).

R162-2c-301a, Unprofessional Conduct, states:(1) Mortgage loan originator.

(a) Affirmative duties. A mortgage loanoriginator who fails to fulfill any affirmativeduty shall be subject to discipline underSections 61-2c-401 through 405. Amortgage loan originator shall:

(i) solicit business and marketproducts solely in the name of themortgage loan originator's sponsoringentity;

(ii) conduct the business of residentialmortgage loans solely in the name ofthe mortgage loan originator'ssponsoring entity;

If a mortgage licensee is going to solicit or conductbusiness, they need to do it in the name of thesponsoring entity. As long as you are using theentity name, branch office name, or another regis-tered trade name, you would be in compliancewith this portion of the administrative rules.

Some ConsiderationsThe following are only suggestions and are in noway required.

1. If you are going to use a shortened versionof your name, your middle name, or use anickname, you may want to consider usingyour full given name as well. Some adver-tisements I have seen look something likethis: Jonathan (Jonny) Stewart.

2. You could also incorporate your licensenumber into advertising.

Using your full given name in advertising is not arequirement, but you may want to consider givingadditional information to avoid confusion and tohelp potential clients locate you and differentiateyou from agents with similar names.


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All Mortgage licenses are renewable on an annualbasis. Renewal requests can be made on your NMLSfiling between November 1 and December 31. You canprepare now so that your renewal will go smoothly byfollowing the checklists, one for entities (companies,branches, dbas) and one for individuals (loan origina-tors and lending managers).

Individual Renewal Checklist (Loan Originators andLending Managers)

Prior to November 1, 20151. Review your filing in the NMLS to make sure your

information is current and correct. This includesmailing address, email, phone numbers, name,and employment history.

2. Review your filing to make sure there are no li-cense items placed. License items can be defi-ciencies or requirements that are pending on yourlicense and must be cleared prior to requestingrenewal. Some common deficiencies include Em-ployment History Updates, ACH Payments thatmay have been returned unpaid, requests for in-formation about Disclosure Questions or CreditReports. Satisfy all pending license items prior torenewal. You may call the licensing department at801-530-6747, if you do not understand your defi-ciency or need help in getting it cleared. When alicense item is placed on your filing, you receive anemail through the NMLS notifying you of the defi-ciency or requirement.

3. If your driver’s license number has changed, besure to indicate this update on your filing, aswell as your US citizenship status. This is foundunder the Identifying Information section of theMU4 form. If this information is incorrect orincomplete, we may place a deficiency on yourlicense requiring you to provide the Divisionwith a Certificate of Legal Presence.http://realestate.utah.gov/forms/cert_legal_pres_fillable.pdf. If your information is recordedaccurately on your filing, you will not need tosubmit this form (Certificate of Legal Presence)to us as you may have done in prior years.

4. NMLS-approved continuing education (8 hours)must be completed prior to requesting renewal.It is recommended that to insure an on timerenewal, these hours must be completed nolater than December 15, 2015. The NMLS willprevent you from requesting renewal if thesehours are not banked.

5. Utah specific continuing education on Utah Law(2 hours) must be completed prior to renewalapproval. Note: The NMLS system will notprevent you from requesting renewal, but if welater find you have not completed the 2 hours ofUtah law, a deficiency will be placed on yourfiling and your renewal will not be approved untilthe hours are completed. To find providers forthis course, you must go to the Utah Division ofReal Estate website to find a list of approvedproviders.

http://realestate.utah.gov/forms/MO_CE_Providers1.pdf

Note: To insure an on time renewal, thesehours must be completed no later than De-cember 15, 2015. It is also important to notethat these hours will not be banked in yourNMLS account. These hours will only betracked in the Utah DRE database.

Mortgage License- Renewal -Be Prepared!

**REFER TO YOUR INDIVIDUAL NMLSDASHBOARD TO REVIEW OUTSTANDINGREQUIREMENTS AND/OR DEFICIENCIES**

Continued on page 4

http://realestate.utah.gov/forms/cert_legal_pres_fillable.pdf

http://realestate.utah.gov/forms/cert_legal_pres_fillable.pdf




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6. If your license is on probation and there arerequirements that must be completed at renew-al, either to have the probation removed or asterms of the probation, make sure these itemsare reported to the Division before you requestrenewal. This will aid in getting your renewalprocessed in a timely manner.

7. A CREDIT REPORT and BACKGROUNDCHECK ARE BOTH REQUIRED THIS YEAR.These requirements come into play on every fifthyear, including this year, in conjunction with the2015 renewal for your 2016 license. You willneed to authorize these two items with your 2015renewal.

On or After November 1, 2015:1. You can now request renewal. The renewal fee is

$78.00 (which includes the NMLS processing feeof $30, Renewal fee of $30.00 and RecoveryFund fee of $18.00). You will need to authorizeyour credit report fee of $15.00. You will alsoneed to authorize one of two criminal backgroundcheck methods: 1) LiveScan (electronic), pro-cessing fee of $36.25, or 2) Paper Card Capture(if LiveScan is not selected), processing fee of$36.25 plus a $10.00 Card Packet Fee. You willbe required at that time to attest to the accuracyof your filing so make sure, once again, that all iscorrect.

2. If there is a change in your answers to the Disclo-sure Questions, you must upload the requireddocumentation explaining the change in your fil-ing.

3. If you request your renewal prior to January 1,2015, your license will remain in the status that itwas prior to renewal. If your status was active,you can continue to work as usual. Your renewalapproval is contingent on all requirements beingmet, in which case the Division will process therenewal as quickly as possible and email yournew license to you.

Entity License Renewal (company, dbas, branch-es):

Prior to November 1, 20151. Review MU1 filing and/or MU3 filing to con-

firm that all the information, company loca-tion, mailing address, contact information,etc., is all correct.

2. If there is a change in your answers to theDisclosure Questions, you must upload therequirement documentation explaining thechange in your filing.

3. Review the entity filing to make sure there areno license items placed on the filing. Theseitems could include things like a returnedACH Payment, update qualifying individual,company ownership, etc.

On or After November 1, 2015:1. Request and pay renewal fees through NMLS

between November 1 and December 31,2015.

2. If renewal is requested prior to January 1,2016, the license will remain in the status thatit was prior to renewal. If the status was ac-tive, work can continue as usual. Your renew-al approval is contingent on all requirementsbeing met, in which case, the Division willprocess the renewal as quickly as possibleand email your new license to the email ad-dress listed in the contact information.

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- Year End Mortgage -Fingerprint & Credit Reporting Required

(This article is a reprint from the March and June 2015 newsletter)

Utah Mortgage licensees, who transitioned onto theNMLS system back in 2010, were required to be(re)fingerprinted, and authorize the issuance of acredit report. Subsequently, the Division reviewed,and in some instances took licensing actions re-stricting some licensees based upon the results ofthe fingerprint and credit reports.

Since 2010 some states have required annual fin-gerprint and credit reporting when determining thecompetency of renewing mortgage licensees. Oth-er states, including Utah, have taken a less asser-tive approach to requiring mortgage licensees tosubmit to recurring fingerprinting and credit report-ing.

On November 20, 2013 The Utah Residential Mort-gage Commission & The Utah Division of RealEstate approved amendments to AdministrativeRule R162-2c-204 to require the reauthorization offingerprints and credit reporting as indicated below:

For the renewal period beginning November 1,2015, licensees filing to renew a license arerequired to submit a fingerprint background re-port and a credit report. The rule amendmentalso requires all renewing licensees to submit afingerprint background report and a credit reportevery fifth year after 2015.

The fourth quarter 2013 Division Newsletter, an-nounced this previously referenced AdministrativeRule Amendment. This article is intended to fur-ther inform and notify all Utah mortgage licens-ees that when they submit a license renewal thisfall (11/1/15 – 12/31/15), they will be required tore-authorize fingerprint and credit reporting.

The NMLS has advised the Division that somefingerprint records “expire”, which will necessitatethat licensees with “expired” fingerprint records,will be obligated to submit new fingerprint cards.To know if your fingerprint records have “expired”,licensees should review their individual records inthe NMLS.

In addition, anyone receiving an initial/newUtah mortgage license (Mortgage Loan Origi-nator or Lending Manager) between the dates1/1/15 – 10/31/15, will also be required to re-authorize fingerprint and credit reporting inconjunction with their 2016 license renewal(11/1/15 – 12/31/15).

The Division will review and evaluate the resultsof the fingerprinting and credit reporting to deter-mine what if any further licensing action(s) may beprompted as a result of these recent reportingrequirements.

Now as we move forward, Utah mortgage licens-ees can anticipate that every five years the finger-print and credit reporting process will be repeated.


requirements, her tenacious work ethic, and her ability to reduce very complex and complicated proceduresand processes into their most fundamental and simplified steps.

Those of us who were fortunate to have worked with Jan share a deep sense of loss, but are grateful for thefond memories and associations that we had with our now departed co-worker and friend. Her efforts will bemissed, but the legacy she fostered will endure. Our deepest sympathies are extended to her family andfriends for their loss.

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On July 1, 2015 our beloved Jan Buchi passed away. Jan worked as theDivision’s Mortgage Education Coordinator for the past six years. Jan madeconsiderable contributions to the Division and the mortgage industry in multi-ple ways including easing licensees through the transition process of exclu-sive state regulation into the Nationwide Mortgage Licensing System (NMLS)back in 2010 and in each subsequent year.

Division staff and mortgage licensees will miss Jan’s always pleasant de-meanor, her lively sense of humor, her keen understanding of licensing

In Memory of - Jan N. Buchi

The standard Real Estate Purchase Contract(REPC) used in most home purchases contains asection that allows for the optional purchase of ahome warranty. A home warranty product is oftenutilized by a seller as an incentive to the homebuyer to purchase the home.

Unfortunately, there are warranty products that arenot legitimate. A home warranty product can onlybe issued, sold, or offered by a home warrantyprovider that is licensed with the Utah InsuranceDepartment. It is a violation of Utah Code Ann.§31A-6a to issue, sell, or offer a home warrantyproduct by a home warranty provider that is notlicensed with the Insurance Department.

The Insurance Department has received com-plaints that buyers were directed to a home war-

ranty company only to find out later that the companyis not licensed in the State of Utah.

The Insurance Department, which regulates homewarranty companies, strongly encourages real es-tate professionals to do their homework before refer-ring home warranties to clients. Doing so will ensurethe company is properly licensed and covered claimswill be paid. The Insurance Department wants to beyour partner in ensuring home buyers in Utah havea good experience.

There are several ways to verify if a home warrantyprovider is licensed to do business in the State ofUtah:

- You can go to the Utah Insurance Department’swebsite and type in the name of the provider:https://secure.utah.gov/agentsearch/search.html#

- You can contact the Property and Casualty Divi-sion of the Utah Insurance Department at 801-538-3800 or toll free 800-439-3805.

http://utah.gov/agent-search/search.html#

http://utah.gov/agent-search/search.html#


11 Things Every Real Estate LicenseeShould Know About Managing and Operating

Rental Properties in UtahBy L. Paul Smith

Executive Director, Utah Apartment Association

Real estate licensees take upon themselves a high-er standard than individuals who own or personallymanage rental properties. Real estate licensees aresubject to specific regulations by the Utah Divisionof Real Estate (DRE). The DRE recently spoke toUtah Apartment Association (UAA) representativesabout existing Administrative Rules and how associ-ation members could improve their compliance withthese rules.

LICENSEES THAT RENT PROPERTIES THEYOWN

There are two rules licensees who rent their ownproperties need to be aware of concerning advertis-ing and signing leases:

1 - Because you have a real estate license, youmust disclose you are a licensed agent in youradvertising if you are not listing the property withyour broker. You can do this by adding the words"Owner/Agent" or “Owner/Broker” to your advertis-ing (R162-2f-401h(1)(b)). This includes, but is notlimited to online ads, signs, and any printed fliers.The DRE can fine or sanction you if you don'tdisclose this to potential renters. In order to avoidany potential issues related to this rule, best practicewould be to always advertise if you are an owner ofthe property to be rented or sold.

2 - Likewise, when you sign a lease, because youare a licensed agent, you must disclose this in all ofyour leases. The same phrase "Owner/Agent"

should be added on the signature line where you sign.Disclosing your status as a licensee is required andthe DRE can sanction and fine you if you don't. Also,your failure to disclose that you are a licensed agentcould be viewed in a negative light in any legalentanglement with your tenants.

MANAGING PROPERTIES FOR OTHERS

Unless exempted by law (Utah Code 61-2f-202(1)),when you manage properties for others you MUSThave a real estate license and process rents re-ceived through a trust account. In addition, there areseveral additional things you need to know and prac-tice.

TRUST ACCOUNTS

3 - If you only manage a few properties, you can runfunds through your regular brokerage trust account.But when you get more than six units, you mustcreate a dedicated property management trust ac-count.

4 - If you have any client money in a trust account,you must return this money to the client or the newbroker within 30 days of termination of your manage-ment agreement. This means if you stop managingfor them for any reason, you transfer any client funds(i.e. security deposits, rents, reserve funds, etc.) tothe client, new property manager, or any other partydesignated to receive these funds in the propertymanagement agreement within 30 days.

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5 - While it is most common for property managerswho are licensed to keep renter's security depositsin their trust account, under Utah law, clients cancontractually agree to keep that money themselvesin their own account. This is common with the so-phisticated large apartment complexes that holdhundreds of thousands of dollars in trust, but lesscommon (and usually not advised) for clients whoown a single family home or a few small rentalproperties.

AGENCY DISCLOSURE

The DRE recently spoke to UAA representativesand clarified some existing Administrative Rules onagency disclosure (R162-2f-401a (1-5,10)), andhow UAA members could improve their compliancewith these rules.

6 - The first step in the discussion of agency andagency disclosure is the creation of an agencyagreement between the owner of a rental propertyand your real estate brokerage (through a propertymanagement agreement). The management agree-ment should clearly define the relationship of theparties (Owner and Agent) and define the scope ofthe agent’s responsibilities and authority. Be clear inyour property management agreement who yourepresent. Most management agreements havesome kind of language like this, but double checkyours and get help clarifying if there are any ques-tions. For sample property management contractsand clauses contact the Utah Apartment Associa-tion.

7 - The second requirement in agency disclosurerequires that you disclose to tenants PRIOR tosigning a lease that you represent the Owner of theProperty, and DO NOT represent them (tenants) asan agent or fiduciary. In a sales transaction, theparallel is the buyer’s agency form that all clientsshould be signing before you show them real estate.Since it may not be practical to get a signed disclo-sure from all potential renters who may look at a

rental property, the DRE will allow you to put lan-guage in your rental application to the effect that theapplicant understands that the licensee representsthe Owner and does not represent the tenant as anagent.

8 - The final requirement in agency disclosure is toconfirm your contractual agency relationship to theparties entering into a rental agreement contract.There is a requirement for licensees that there belanguage in your lease stating the agency relation-ship you have with the Owner and/or Tenant that thelicensee is an agent ONLY for the owner and not forthe renter. The July 2015 revised UAA ResidentialRental Agreement has such language included inthe agreement. For examples of any of these formsor sample language, contact the UAA.

PAYING REFERRAL FEES

9 - The DRE regulations allow licensees to pay upto a $200 referral fee to an existing tenant or anunlicensed employee. It is also acceptable to solicitreferrals with this promise, or to reward an existingtenant or employee with up to $200 for each tenantthey refer/lease to.

DISCLOSURE OF AUTHORITY TO SIGN FOROWNERS

10 - Property managers are sometimes authorizedto sign things on behalf of clients. In your propertymanagement agreement, you should have clearlanguage that specifies what authority you have. Inmost cases, property managers don't have a fullpower of attorney. Instead, they obtain authorityunder the management agreement to sign on behalfof clients in certain cases. Common examples in-clude signing leases, contracts for work to be per-formed on the property, and permission to manageutility accounts. Whatever you're authorized to do,enumerate those things clearly in the managementagreement. The division has started to really focus

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on this, and most management agreements aren'tclear. If necessary, update yours.

AGENTS WHO WISH TO BECOME BROKERS

11 - The DRE thoroughly reviews all broker appli-cations including by licensees who have worked asa property manager and now want to become abroker. The DRE requires proof of the agencydisclosures described in paragraph 6-8 above.Broker applicants are required to complete 60experience points. Only property management re-

cords that document the disclosure process describedabove will count towards the necessary 60 experiencepoints. In addition, to receive experience points forproperties you own, you must have a written manage-ment agreement with the brokerage completed BE-FORE the experience was obtained.

Being a licensed, professional, property manager witha Utah real estate license brings greater responsibili-ties. But if you clearly understand the requirements youcan successfully navigate this rewarding and potential-ly lucrative profession.


Recently, in the Association of Real Estate LicenseLaw Officials’ (ARELLO) Newsletter there was anarticle about current real estate scams that havebeen identified across the county. Two of thescams mentioned are a Wiring Instruction Scam,the other, “We Buy Homes” sign scam.

Wiring Instruction ScamIn this scam, perpetrators will hack email accountsand monitor when a real estate transaction is goingto fund. Prior to funding, they will send a fake,although authentic-looking email with new wiringinstructions. We have heard that these emails areused to divert earnest money, buyers’ closing costfunds, and sellers’ proceeds.

In North Carolina, there was a specific examplewhere a hacker gained access to a broker’s emailaccount and sent an email that appeared to befrom the broker to the closing attorney. The attor-ney was instructed to wire the seller’s proceeds toa bank account other than the originally identified

bank account in the transaction. The attorneywired over $272,000 to a foreign bank prior to thecrime being discovered. The North Carolina RealEstate Commission has urged, and we secondtheir plea, to “instruct the closing lawyer [or titlecompany] in each transaction not to disburse theseller’s proceeds other than as specifically autho-rized in documents signed by the seller.”

“We Buy Homes” Signs ScamWe have all seen the signs around town that say:“We Buy Homes.” Recently, the North CarolinaDepartment of Justice issued a warning to home-owners warning them about responding to thesetypes of advertisements. Many of these compa-nies do not do as advertised, but attempt to con-vince homeowners to sign over control of theirhome, and then lease the property. Owners losetheir rights to the home, but still have a mortgageto pay. More often than not, the companies do notoffer to pay cash for the property or help secure afast payoff for the mortgage.


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Rule Developments Since July 1, 2015To view and comment on any proposed or amended rules,

please visit the Utah State Bulletin at http://www.rules.utah.gov/publicat/bulletin.htm

2. R162-2c-203 sets forth certi-fication requirements for in-structors ofDivision-approved courses;

3. R162-2c-205 requires a li-censee to update the nation-wide database as to anychange in the licensee's resi-dential address;

4. R162-2c-301a requires alending manager to take cor-rective action for problemsidentified through the under-writing process, establishesvicarious liability for an entitywhose sponsored licenseesengage in unprofessionalconduct, and requires a mort-gage entity to remit appraisalfees within 30 days of receipt;

5. R162-2c-302 specifies thatthe record retention require-ment applies to 1003 loanapplication forms; and

6. R162-2c-401 establishes thatadjudicative proceedings willbe designated as either infor-mal or formal when filed and,thereafter, may be convertedas provided for in statute.

Real EstateR162-2f-401a – A proposal toamend this rule was filed March 3,2015. A public hearing was heldMay 20, 2015 to gather more publicinput on the proposed rule amend-ment. After considering the publiccomment received in writing and atthe public hearing, the Commissiondetermined to allow the rule filing tolapse. The proposed rule amend-ment was not adopted.

R162-2f – Every five years, statelaw requires that an administrativerule be reviewed and either contin-ued or the rule expires. The fiveyear review of the Real Estate Li-censing and Practices Rules foundin R162-2f occurred during thethird quarter and the rule was con-tinued.

Timeshare and Camp ResortThere are no proposed ruleamendments under considerationfor the timeshare and camp resortrules for the third quarter.

Utah HousingR162-2a – Every five years, statelaw requires that an administrativerule be reviewed and either contin-ued or the rule expires. The fiveyear review of the Utah HousingOpportunity Restricted Account oc-curred during the third quarter andthe rule was continued. In a sepa-rate rule filing, two citation errorswere corrected.

Appraisal ManagementThere are no proposed ruleamendments under considerationin appraisal management for thethird quarter.

AppraisalR162-2g-304d and 307d – A pro-posal to amend these sectionswas filed August 12, 2015. Theproposed amendment of Section304d clarifies that a licensee mayreceive experience credit for workwithout a traditional client up to amaximum of 50% of the requiredexperience and also limits experi-ence credit to the actual hoursworked. The proposed amend-ment of Section 307d clarifies thata licensee may receive credit forup to one-half of the individual’scontinuing education requirementfor participation, other than as astudent, in educational processesand programs. The public com-ment period for this proposedamendment runs through October1, 2015.

MortgageR162-2c – Several sections wereamended in a rule filing whichbecame effective September 4,2015. The following amendmentshave been adopted:

1. R162-2c-201 requires a reg-istering entity to list all busi-ness and trade names used;

http://www.rules.utah.gov/publicat/bulletin.htm


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Utah! Division of Real EstateNEWS

Director ………… Jonathan StewartEditor/Contributor…Mark FagergrenContributor/Layout…Jennica GruverContributor ………….… Jeff NielsenContributor ………….. Justin BarneyContributor …………..….. Van Kagie

2015 Published by

Utah Division of Real EstateDepartment of Commerce

160 E 300 S (84111)PO Box 146711SLC UT 84114(801) 530-6747

Real Estate Commissioners

Russell K. Booth, ChairLerron E. Little, Vice ChairLori ChapmanCalvin MusselmanWilliam O. Perry IV

Residential Mortgage RegulatoryCommissioners

Steve A. Hiatt, ChairGeorge P. Richards, Vice ChairJohn T. GonzalesCathy J. GardnerKay R. Ashton

Appraiser Licensing andCertification Board Members

John E. Ulibarri, II, ChairKristin Coleman-Nichol, Vice ChairDaniel BrammerPaul W. ThrondsenJames S. Bringhurst

Every once in a while, the Divi-sion learns of a situation whichcan cause our licensees to po-tentially violate the Division’sstatutes and rules. Exampleshave been addressed in thenewsletter and on the Division’sannual Caravan event. Anotherissue recently came to the Divi-sion’s attention, and we feel thatit should be passed along to ourreal estate licensees.

Recently, we have seen emailsfrom commercial lenders whoare asking agents to refer clientsto the lender for financing. Inreturn, the lender is offering topay a fee for the referral of busi-ness. While RESPA and otherlending guidelines may not ap-ply, since this involves an issueof commercial lending, thosewho are offered the fee mayhave a problem for acceptingsuch a fee.

Pursuant to administrative ruleR162-2f-401a(16), a real estatelicensee shall:(a) disclose in writing to all par-ties to a transaction any com-pensation in addition to any real

estate commission that will bereceived in connection with areal estate transaction; and(b) ensure that any such com-pensation is paid to the licens-ee's principal broker.

Further, pursuant to rule R162-2f-401b(13), a real estate licens-ee may not accept a referral feefrom (a) a lender, or (b) a mort-gage broker.

By accepting the funds as a realestate licensee, you could findyourself in violation of one orboth of the above rules. Whilethis occurs to one of our realestate licensees, the commer-cial lender, who is not under theDivision’s jurisdiction, will mostlikely not have any disciplinaryaction(s) taken.

Be aware of this and similar situ-ations, and make sure to exer-cise good judgment beforeaccepting these offers or follow-ing instructions from various par-ties. If you have questions, makesure to discuss these with yourbroker, attorney, or the Division.


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Please note that Utah law allows 30 days for appeal of an order. Some of theactions below might be subject to this appeal right or currently under appeal.

APPRAISAL

PERKINS, RICHARD T., certifiedgeneral appraiser, Salt Lake City,Utah. In a March 21, 2013 deci-sion, the Appraiser Board and theDivision found numerous errorsand USPAP violations in reportsprepared by Mr. Perkins on threeseparate properties and his certifi-cation was revoked. In addition,Mr. Perkins was ordered to pay atotal civil penalty of $45,000. Mr.Perkins appealed the decision toThird District Court. Thereafter, theparties reached a settlementagreement which was incorporatedby the Court in its July 10, 2015Order on Review which affirmedthe revocation of Mr. Perkins’ certi-fication and ordered Mr. Perkins topay a total civil penalty of $6,000.Case Nos. AP-08-40235, AP-09-43457, and AP-09-42316

MORTGAGE

CITYWIDE HOME LOANS, mort-gage entity, Salt Lake City, Utah. Ina September 8, 2014 order, theMortgage Commission and the Di-vision found that Citywide HomeLoans (Citywide) provided dinnerand gifts to a number of personsfor the referral of business in viola-tion of Utah Code Section 61-2c-301(1)(a). Citywide was ordered topay a civil penalty of $6,000. CaseNo. MG-13-67162

CURTIS, RICK, mortgage loanoriginator, Woods Cross, Utah. Ina June 4, 2015 order, Mr. Curtis’slicense was granted and placed onprobation until he has formalizedplans to satisfy several tax liens.Case No. MG-15-77003

HARDY, AARON D., lending man-ager, Draper, Utah. In a July 6,2015 order, Mr. Hardy’s applicationto renew his license was denied forcriminal history. Mr. Hardy may notapply for re-licensure until threeyears after his conviction in thecriminal matter. Case No. MG-15-74600

HOGAN, JAMES DAVID, mort-gage loan originator, St. George,Utah. In a June 25, 2015 order, Mr.Hogan’s license was granted andplaced on probation until he hasformalized plans to satisfy severaltax liens. Case No. MG-15-77373

LLAVINA, JOSE LUIS, lendingmanager, Draper, Utah. In a stipu-lated order dated August 5, 2015,Mr. Llavina admitted to havingfailed to adequately supervise affil-iated staff and a loan originator inviolation of Utah Code Section 61-2c-301 and having failed to main-tain records and a quality controlplan in violation of Utah Adminis-trative Code Section R162-2c-301and 301a. Mr. Llavina was orderedto pay a civil penalty of $8,000 and

to update his MU4 disclosure.Case No. MG-14-69873

PETERSON, CALLIE M., mort-gage loan originator, Riverton,Utah. In a stipulated order datedAugust 5, 2015, Ms. Petersonadmitted to having drafted lettersof explanation for borrowerswithout their permission in whichshe pasted signatures cut fromother loan documents. In addi-tion, she admitted making altera-tions to the REPC and to a letterfrom the borrowers CPA. Ms.Peterson submitted the lettersand REPC to a lender to inducethe lender to extend credit to theborrower. These actions are inviolation of Utah Code Section61-2c-301. Ms. Peterson agreedto the revocation of her license.Case No. MG-15-75039

PLUMB, STEPHANIE DENISE,mortgage loan originator, CitrusHeights, California. In a June 9,2015 order, Ms. Plumb’s licensewas granted and placed on pro-bation for the initial licensing pe-riod due to her criminal history.Case No. MG-15-77045

SYKES, RICHARD GORDON,mortgage loan originator, Provo,Utah. In a June 5, 2015 order,Mr. Sykes’s license was grantedand placed on probation until hehas formalized a plan to satisfy

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certain tax liens and made substan-tial progress in paying down unpaidcivil judgments. Case No. MG-1577019

TAYLOR, STEVEN L., mortgageloan originator, Draper, Utah. In aJuly 29, 2015 order, Mr. Taylor’slicense was granted and placed onprobation until he has formalizedplans to satisfy certain tax liens.Case No. MG-15-77913

REAL ESTATE

ADAMS, DONALD C., sales agent,Cedar City, Utah. In a July 29, 2015order, Mr. Adams’s license wasgranted and placed on probation forthe initial licensing period due to hiscriminal history. Case number RE-15-77894

BALDWIN, MICAH, sales agent,Pleasant Grove, Utah. In a June 11,2015 order, Ms. Baldwin’s licensewas granted and placed on proba-tion for the initial licensing perioddue to her criminal history and due tounpaid civil judgments. Case num-ber RE-15-77130

BARGAR, SAMUEL D., sales agent,Salt Lake City, Utah. In a June 25,2015 order, Mr. Bargar’s license wasgranted and placed on probation forone year due to his criminal history.Case number RE-15-77377

BARNES, DALLIN LAYNE, salesagent, South Jordan, Utah. In a July29, 2015 order, Mr. Barnes’s licensewas denied due to his criminal histo-ry. Case number RE-15-77905

BELLO, PAUL JAMES, salesagent, Far West, Utah. In a July 29,2015 order, Mr. Bello’s license wasgranted and placed on probationfor the initial licensing period due tohis criminal history. Case numberRE-15-77896

BERNSON, CHAZ, J., sales agent,Sandy, Utah. In a July 20, 2015order, Mr. Bernson’s license wasgranted and immediately suspend-ed until November 30, 2016 andthereafter placed on probation forone year due to his criminal history.Case number RE-15-76613

BOLDEN, WILLIAM E., salesagent, Ogden, Utah. In a June 30,2015 order, Mr. Bolden’s licensewas granted and placed on proba-tion for the initial licensing perioddue to his criminal history. Casenumber RE-15-77447

BOSS, LESLIE, sales agent, SaltLake City, Utah. In a May 27, 2015order, Mr. Boss’s application for therenewal of his license was denieddue to his criminal history. Casenumber RE-15-76884

BURCH, ALLYSON, sales agent,Sandy, Utah. In a June 10, 2015order, Ms. Burch’s license wasgranted and placed on probationfor the initial licensing period due toher criminal history and due to anunpaid civil judgment. Case num-ber RE-15-77106

BUSH, ARI, sales agent, Salt LakeCity, Utah. In an August 4, 2015order, Mr. Bush’s license was


13

The Division is excited towelcome Kay Ashton toour Mortgage Commis-sion!

Kay served on the RealEstate Commission fromJune 2006 to November2014 and has been work-ing in the real estate andmortgage industries forover 30 years.

We look forward to con-tinue working with Kay onour Commission and re-ceiving his guidance andexpertise.

Welcome Kay!



granted and placed on probationfor the initial licensing period dueto his criminal history. Case num-ber RE-15-77971

CHRISTENSEN, JEFFREY L.,sales agent, West Point, Utah. Ina July 23, 2015 order, Mr. Chris-tensen’s license was granted andplaced on probation for the initiallicensing period due to his criminalhistory. Case number RE-1577851

GIBBS, NEIL, associate broker,St. George, Utah. In a June 19,2015 order, Mr. Gibbs’s licensewas granted and placed on proba-tion for the initial licensing perioddue to his criminal history andseveral civil judgments whichhave not been satisfied. Casenumber RE-15-76634

GUNN, STEPHANIE, sales agent,Franklin, Idaho. In a June 4, 2015order, Ms. Gunn’s license wasgranted and placed on probationfor the initial licensing period dueto her criminal history. Case num-ber RE-15-76996

HOLMES, TYSON STEVE, salesagent, Holladay, Utah. In a June10, 2015 order, Mr. Holmes’s li-cense was granted and placed onprobation for the initial licensingperiod due to his criminal history.Case number RE-15-77075

INGOLD, MERIDETH, salesagent, Logan, Utah. In a June 10,2015 order, Ms. Ingold’s licensewas granted and placed on proba-tion for the initial licensing period

due to her criminal history and dueto unpaid civil judgments. Casenumber RE-15-77102

JOHNS, DEVIN, sales agent, Lay-ton, Utah. In an August 7, 2015order, Mr. Johns’s license wasgranted and placed on probation forthe initial licensing period due to hiscriminal history. Case number RE-15-78051

KOPAUNIK, STEPHEN, salesagent, West Jordan, Utah. In a July22, 2015 order, Mr. Kopaunik’s li-cense was granted and placed onprobation for the initial licensing pe-riod due to his criminal history.Case number RE-15-77831

KURSCHNER, STEVEN ROBERT,sales agent, Syracuse, Utah. In anAugust 4, 2015 order, Mr. Kursch-ner’s license was granted andplaced on probation for the initiallicensing period due to his criminalhistory. Case number RE-15-77980

LAMBSON, JENNIFER, salesagent, Sandy, Utah. In a July 22,2015 order, Ms. Lambson’s licensewas granted and placed on proba-tion for the initial licensing perioddue to her criminal history. Casenumber RE-15-77824

LEJON, SAN V., principal broker,Salt Lake City, Utah. In a July 22,2015 order, Mr. Lejon’s license wasrenewed and placed on probationfor the renewal period due to hiscriminal history. Case number RE-15-77814

MAGNESEN, STEVEN T.,Salesagent, St. George, Utah. Ina stipulated order dated August19, 2015, Mr. Magnesen admittedto having pled guilty to two felonycharges and two misdemeanorcharges in case number151500591 (Fifth District Court,Washington County, Utah) in vio-lation of Utah Code Section 61-2f-401(10). Mr. Magnesen agreed tothe revocation of his license.Case number RE-15-76361

MANGUM, BRYANT, sales agent,Taylorsville, Utah. In an August 7,2015 order, Mr. Mangum’s licensewas granted and placed on proba-tion for the initial licensing perioddue to his criminal history. Casenumber RE-15-78075

MCKEE, ARLO R., principal bro-ker, Ogden, Utah. In a July 7,2015 order, Mr. McKee’s licensewas renewed and immediatelysuspended until December 21,2016 and thereafter placed onprobation for the remainder of therenewal period due to his criminalhistory. Case number RE-1577528

MELLOR, LESLIE A., salesagent, Holladay, Utah. In an Au-gust 7, 2015 order, Ms. Mellor’slicense was granted and placedon probation for the initial licens-ing period due to her criminal his-tory. Case number RE-15-78055

MILITONI, SALESI TAIONE,sales agent, Lindon, Utah. In anAugust 21, 2015 order, Mr. Milito-ni’s license was granted and


14 continued on page 15


placed on probation for the initiallicensing period due to his criminalhistory. Case number RE-1578280

OSSANA, MILES C., sales agent,Salt Lake City, Utah. In a July 23,2015 order, Mr. Ossana’s licensewas granted and placed on proba-tion for the initial licensing perioddue to his criminal history. Casenumber RE-15-77843

PRAGGASTIS, CHRISTOPHERLEE, sales agent, Salt Lake City,Utah. In a June 9, 2015 order, Mr.Praggastis’s license was renewedand placed on probation for therenewal period due to his criminalhistory. Case number RE-1577054

RANDAL, SARAH JEAN, salesagent, Salt Lake City, Utah. In aJune 25, 2015 order, Ms. Randal’slicense was granted and placed onprobation for the initial licensingperiod due to her criminal history.Case number RE-15-77379

RICHES, SHANNA NICOLE, salesagent, West Valley City, Utah. Inan August 6, 2015 order, Ms.Riches’s license was granted andplaced on probation for the initiallicensing period due to her criminalhistory. Case number RE-1578048

RINCK, CAYLAN JAMES, salesagent, Park City, Utah. In a July29, 2015 order, Mr. Rinck’s licensewas granted and placed on proba-tion for the initial licensing period

due to his criminal history. Casenumber RE-15-77911

ROBINSON, ASHLEIGH KATE,sales agent, Salt Lake City, Utah.In a June 11, 2015 order, Ms. Rob-inson’s license was granted andplaced on probation for the initiallicensing period due to her criminalhistory. Case number RE-1577125

RUTHERFORD, DANNY L., salesagent, Herriman, Utah. In an Au-gust 17, 2015 order, Mr. Ruther-ford’s license was granted andplaced on probation for the initiallicensing period due to his criminalhistory. Case number RE-1578206

SATTERFIELD, STERLING MI-CHAEL, sales agent, Draper, Utah.In an August 17, 2015 order, Mr.Satterfield’s license was grantedand placed on probation for theinitial licensing period due to hiscriminal history. Case number RE-15-78182

STOOKEY, STEVEN LINCOLN,sales agent, Saratoga Springs,Utah. In an August 18, 2015 order,Mr. Stookey’s license was grantedand placed on probation for theinitial licensing period due to hiscriminal history and due to a previ-ous sanction of his mortgage li-cense in another state. Casenumber RE-15-78220

SWABY, NIGEL, sales agent, SaltLake City, Utah. In an August 14,2015 order, Mr. Swaby’s licensewas granted and placed on proba-

tion for the initial licensing perioddue to his criminal history. Casenumber RE-15-78181

THOMPSON, MICAH, salesagent, Ivins, Utah. In a July 7,2015 order, Ms. Thompson’s li-cense was granted and placed onprobation for the initial licensingperiod due to her criminal history.Case number RE-15-77538

TIMMONS, SPENCER J., salesagent, Salt Lake City, Utah. In anAugust 11, 2015, order, Mr. Tim-mons’s license was granted andplaced on probation for the initiallicensing period due to his crimi-nal history. Case number RE-15-78076

WEBSTER, KARI S., sales agent,Syracuse, Utah. In a June 10,2015 order, Ms. Webster’s licensewas renewed and placed on pro-bation for the renewal period dueto her criminal history. Case num-ber RE-15-77101

WILLIAMS, SCOTT L., salesagent, Salt Lake City, Utah. In aJuly 21, 2015 order, Mr. Wil-liams’s license was granted andplaced on probation for the initiallicensing period due to his crimi-nal history. Case number RE-15-76488

ZAHM, CHRISTINA, sales agent,Sandy, Utah. In a July 9, 2015order, Ms. Zahm’s license wasgranted and placed on probationfor the initial licensing period dueto her criminal history. Case num-ber RE-15-77589


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When a buyer's agent is repre-senting his or her client and pre-pares a Real Estate PurchaseContract (REPC), the client has achoice to make with regard to theearnest money. The REPC pro-vides a couple of options. Thebuyer can: 1) deliver the earnestmoney to the buyer’s brokeragewith the REPC; or 2) agree todeliver the earnest money to thebuyer's brokerage within four daysafter acceptance of the REPC.Regardless of the option selected,the buyer's agent must determinehow to document receipt of theearnest money.

If the buyer elects option one, thefirst section of the REPC shouldbe used as a receipt to documentthat the earnest money was re-ceived by the buyer’s agent. If thebuyer elects option two, the properway to document receipt of theearnest money is also for the buy-er’s agent to sign the first sectionof the REPC. However, with op-tion 2, the buyer’s agent shouldonly sign the receipt after receiv-ing the earnest money from thebuyer (which should be within fourdays after acceptance of theREPC by the seller). If a partyother than the buyer’s brokerageis to hold the earnest money, thiscircumstance should be ad-dressed in an addendum to theREPC.

If an addendum is used, the ad-dendum should indicate which ti-tle company is holding the fundsand when the deposit should oc-cur. For example the addendumshould not read, “Earnest moneyto be deposited at buyer’s titlecompany.” This language is toobroad. Both the buyer and sellerneed to know which title companywill be holding the funds, and theagents involved should ensurethat their clients are protected bynoting in the addendum wherethe earnest money will be heldand who will hold the funds intrust. An example of addendumlanguage might be “Earnest mon-ey will be deposited with ABC TitleCompany as per the deadlinestated in the OFFER TO PUR-CHASE AND EARNEST MONEYDEPOSIT on Page 1 of theREPC.” When the language isclear, both the buyer and sellerhave agreed to which title compa-ny will be holding the earnestmoney and when the money willbe deposited for their transaction.Clarity in the REPC and Addendawill help to alleviate possible liti-gation.

When properly documented in anaddendum, earnest money maybe deposited with a title companyor other authorized escrow com-pany, as per the following admin-istrative rule:

R-162-2f-401c (1) A principalbroker shall:(i)(i) except as provided in thisSubsection (1)(i)(iii), within threebusiness days of receiving aclient's money in a real estatetransaction, deposit the client'smoney into a trust account:

(A) maintained by the principalbroker pursuant to SectionR162-2f-403; or(B) if the parties to thetransaction agree in writing,maintained by:(I) a title company pursuant toSection 31A-23a-406; or(II) another authorized escrowentity.

In addition to the language in theREPC confirming receipt of ear-nest money, use of either theUtah Association of Realtor’sConfirmation of Receipt of Ear-nest Money Form, or a form draft-ed by your broker’s attorneyaddressing receipt of the earnestmoney, would be a beneficial ad-ditional step to demonstrate to allparties that earnest monies havebeen received.

Both the listing and selling agentshave a fiduciary duty to their cli-ents to ensure the earnest moneyis deposited as directed and inaccordance with the terms of theREPC.


The Division recently received the following question:

“In some of the more rural towns in southern Utah,brokers seem to think that they have the right to holdagents “hostage” and not sign a licensee’s changecards or complete a change affiliation request inRELMS when requested to do so. I have seen ithappen over and over again in the past 12 years, 3times for myself. I am very thankful that this is incor-rect and that these “Bully Brokers” do not own us orour license. I would love to see an article in thenewsletter telling agents that they have the right tochange brokerages and not to be bullied by meanbrokers.”

This is a fascinating question and we appreciate theopportunity to clarify this matter.

When a sales agent or associate broker desires toinactivate their license, or to change company affilia-tions, the sales agent or associate broker has twomethods to accomplish their request through theirpersonal RELMS account:

The first method is for the sales agent or associatebroker to submit a change request in RELMS. Thereis no fee associated with inactivating a license orchanging affiliations. If inactivation is requested, thecurrent broker is notified by e-mail of your request toinactivate your license. The broker has ten days toelectronically acknowledge your request in his or herRELMS account. When the broker acknowledgesyour request (if within ten days), your license statuswill change to inactive on the following business day.

If the current broker fails to acknowledge your inac-tivation request within ten days, your inactivation req-uest has

If the sales agent or associate broker desires tochange brokerage affiliations they need to submit achange affiliation request in their RELMS account.In this instance, the current broker and the pendingnew broker are both sent an electronic notification ofyour request. The current broker must acknowledgeyour desire to change affiliations, and the pendingnew broker must accept your request to join theircompany, within ten days. If either broker fails toelectronically acknowledge or accept the requestwithin ten days, the desired affiliation change requ-est

Once again both brokers must electronicallyacknowledge/accept within ten days or this secondrequest will fail. This process must be continued bythe initiating licensee until BOTH the current brokerAND the pending new broker have acknowledgedand accepted within ten days.

The second method does not require either broker’sacknowledgement or acceptance. The process forthe second method is for the sales agent or associ-

17

fails1.

failed1.

1 If an inactivation request or affiliation request fails,the sales agent of associate broker must first can-cel the inactivation request and/or affiliation re-quest in their RELMS account, and then submitanother change request in the RELMS system.



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ate broker desiring to inactive their license, or to beremoved from a company affiliation, to send a letterby certified mail to their current broker at their lastknown address. Then in their personal RELMS ac-count, enter the Certified Mail Return Receipt Num-ber and click “Record Acknowledgment.” TheDivision will make the requested change as of thedate electronically received by the Division.

With the availability of both these methods to eitherinactive or change company affiliations there is no


reason for any licensee to feel as though they arebeing “held hostage” by a “bully broker.” Real estatelicensees have every reason to make these impor-tant decisions without feeling as though they areconstrained to remain, and/or have no remedy toinactive or terminate their working relationship withtheir real estate broker. No laughing matter, please,no more mean bully brokers.

Send an email with yourquestions to:

[email protected] can also reach the

Division of Real Estate at801-530-6747


Utah Division of Real Estate

Instructor Development Workshop

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This year our speaker will be career educator, DeborahLong. Since 1994, Deborah has traveled around theUnited States, sharing her research, expertise, andprovocative insights with real estate professionals,home inspectors, surveyors, engineers, and basicallyanyone who will listen. A career educator, Deborah hasbeen certified as an ethics trainer by the JosephsonInstitute of Ethics and earned her doctorate in adulteducation. Her research on the effect of ethics instruc-tion on Florida real estate agents created a firestorm ofcontroversy and interest. Deborah was recognized asNorth Carolina’s Real Estate Educator of the Year bythe NC Real Estate Educators Association, and herethics courses have achieved national recognition.

Deborah is theauthor of morethan 20 real es-tate textbooks,including Doingthe Right Thing:A Real EstatePractitioner'sGuide to EthicalDecision Mak-ing, which is inits 4th edition.Deborah current-ly resides inChapel Hill,North Carolina, atown famous for

its rabid love of sports, The University of North Caroli-na, Michael Jordan, and BBQ pork.

Division representatives will present current industry

information and changes duringthe morning sessionOctober 14th

NOTE: Attendance at the two-day IDW is requiredonce every two years for all real estate, mortgage,and appraiser pre-licensing instructors. Mortgageand appraisal instructors are invited to attend thiscourse although no CE credit can be given. OnlyReal Estate instructors (pre-license and con-tinuing education) as well as attending realestate licensees, will receive 13 hours of corecontinuing education credit for attendance atthis outstanding training event. Please keep inmind that CE credits are only awarded in full-daysegments.

October 14 $50October 15 $50Both days $75

Click to download theREGISTRATION FORM

http://realestate.utah.gov/idw-reg-2015.pdf?

http://realestate.utah.gov/idw-reg-2015.pdf?


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The Division has a few casesunder review where additionalviolations may be pursued aboveand beyond the initial allegationsbecause of how agents and/orbrokers have handled documentrequests. It has to do with howthey answer the following ques-tion:

“The Division is asking me for acopy of my brokerage file or re-cords. While copying and review-ing the file, I noticed a documentis not present (e.g. listing agree-ment). What should I do in thissituation?”

A licensee in this situation has afew options:1. An agent/broker can check

with each other to see if theother party has a copy.

2. Team members can checkwith one another.

3. Depending on who wouldhave needed the document,such as title, a licensee canpossibly acquire it from them.

4. A licensee can even checkwith the client to see if theclient has a copy.

But there is definitely a wronganswer to this situation. That isrecreating the document. This

means having parties resign thedocument and back-dating thedocument to when it should havebeen done to be in compliance.This could also mean to place aperson’s signature on the docu-ment after the fact. This can in-clude any number of things tocreate a version of the documentwhich was not either created orexecuted during the time of thetransaction in question.

If the Division asks for a copy ofthe file, and documents may bemissing, do not try to recreatethem. The Division would callthat a fabricated document, andwill look to take serious action inthese matters. If a licensee justdoes not have the document inquestion, be honest about it. Wecan deal with that situation, andit probably will not be as seriousof a situation as if you create adocument and try to pass it off asan original copy to the Divisionfor review.

If you have questions about howto handle this type of situation,speak with an attorney or withthe Division staff member mak-ing the request. The last thingthe Division wants to do is addadditional, serious violationsagainst a licensee because theytried to be dishonest about main-taining a copy of any given docu-ment.

Lark MartinezMortgage

Education Coordinator

Lark Martinez has joined the Di-vision as the new Mortgage Ed-ucation Coordinator! She dealswith NMLS, licensing and edu-cation. Lark has been workingin the Mortgage industry for 15years and spent 5 of those yearsserving as a Principal LendingManager. In the short time thatLark has been with the Divisionher knowledge and experiencehas provided a great value toour Mortgage team.

Outside of work Lark enjoysroad biking as well as takingmotorcycle road trips with herhusband. Lark also enjoysspending time with her two sons,two chihuahuas.

Lark is extremely driven and ef-ficient at what she does. We areexcited to have Lark as part ofour work family!


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Recently the Division received a communication inwhich concerns were expressed about real estateauction companies. Specific concerns regardinghow unlicensed auction companies or auctioneersparticipate in a transaction have been raised.Based on those concerns, the Division wanted toprovide our licensees with some clarifying informa-tion.

According to Utah Code Annotated § 61-2f-102(18),which defines Principal Broker (and, consequently,draws the line when a license is required), a licenseis required for two relevant activities related to auc-tions. A license is required for a person who:

1.) buys, exchanges, or auctions real estate…withthe expectation of receiving valuable consider-ation; or

2.) sells or lists for sale real estate…with the expec-tation of receiving valuable consideration.

In order for a property to be auctioned or advertised,a licensed broker must be directly involved. Thestatutes do not further discuss how auctions occur,but current rules under R162-2f-401i do address theissue.

At this time, there are a couple of things to takeaway from the statutes and rules. First, an auctioncompany or auctioneer must be licensed in order tomarket or advertise the property. Second, if theauction company or auctioneer is not licensed, theymust contract or affiliate with a licensed principal to conduct an auction.

For our licensed brokers, if you contract with anauction company or auctioneer to conduct an auc-tion, you are responsible to ensure the auction iscompliant with the Divisions rules. This does not

mean you can sit back and let the auction companyor auctioneer handle all of the work…you mustensure that all of the elements under the rule aresupervised by you, the broker.

With that said, the Division is currently consideringa rule change regarding how auctions will occur inthe future. Until a rule change occurs, please beaware of your duties as the licensed broker to,according to the auction rules, “ensure that all as-pects of the auction comply with the requirements ofthis section (R162-2f-401i).”

If you are aware of auction companies that areapproaching homeowners who are already subjectto an agency agreement, advertising Utah proper-ties, or auctioning Utah properties without eitherbeing licensed or without being properly affiliatedwith a principal broker, please notify the Division tofile a complaint.

1We have also heard that there are auction compa-nies paying commissions to real estate agents di-rectly. Even if your brokerage does affiliate with anauction company, any compensation must gothrough the licensee’s broker.

broker1

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utah department of commerce division of real estatebrokerage or, as applicable, the property...

Documents