Enrolled Copy H.B. 419
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Real Estate Revisions
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: R. Neil Walter
Senate Sponsor: Calvin R. Musselman
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LONG TITLE
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General Description:
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This bill amends provisions related to the Division of Real Estate's investigation practices
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and procedures.
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Highlighted Provisions:
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This bill:
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▸ amends provisions related to the Division of Real Estate's (division) authority to
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investigate licensees, including time periods for retention of certain documents, and the
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division's ability to request documents;
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▸ provides guidance on the determination of disciplinary actions taken by the Real Estate
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Commission;
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▸ defines terms related to advertising practices;
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▸ provides that certain conduct by a principal broker does not create an agency relationship
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with a buyer;
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▸ amends provisions related to the inclusion of the brokerage's name being included in an
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advertisement or through a link requiring only one click; and
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▸ makes technical changes.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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None
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Utah Code Sections Affected:
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AMENDS:
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61-2-203, as last amended by Laws of Utah 2023, Chapter 401
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61-2f-102, as last amended by Laws of Utah 2024, Chapter 227 H.B. 419 Enrolled Copy
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61-2f-206, as last amended by Laws of Utah 2022, Chapter 204
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61-2f-308, as last amended by Laws of Utah 2014, Chapter 350
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61-2f-401, as last amended by Laws of Utah 2024, Chapter 227
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61-2f-402, as last amended by Laws of Utah 2022, Chapter 204
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61-2f-404, as last amended by Laws of Utah 2024, Chapter 227
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61-2f-405, as renumbered and amended by Laws of Utah 2010, Chapter 379
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ENACTS:
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61-2f-309, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 61-2-203 is amended to read:
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61-2-203 . Adjudicative proceedings -- Citation authority.
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(1) The division shall comply with Title 63G, Chapter 4, Administrative Procedures Act, in
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an adjudicative proceeding under a chapter the division administers.
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(2) The division may initiate an adjudicative proceeding through:
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(a) a notice of agency action; or
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(b) a notice of formal or informal proceeding.
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(3) The provisions of Title 63G, Chapter 4, Administrative Procedures Act, do not apply to
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the issuance of a citation under Subsection (4), unless a licensee or another person
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authorized by law to contest the validity or correctness of a citation commences an
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adjudicative proceeding contesting the citation.
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(4) [In addition to any other statutory penalty for a violation related to an occupation or
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profession regulated under this title, the ] The division may issue a citation to a person
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who, upon inspection or investigation, the division concludes to have violated:
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(a) Subsection 61-2c-201(1), which requires licensure;
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(b) Subsection 61-2c-201(4), which requires licensure;
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(c) Subsection 61-2c-205(3), which requires notification of a change in specified
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information regarding a licensee;
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(d) Subsection 61-2c-205(4), which requires notification of a specified legal action;
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(e) Subsection 61-2c-301(1)(g), which prohibits failing to respond to the division within
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the required time period;
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(f) Subsection 61-2c-301(1)(h), which prohibits making a false representation to the
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division;
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(g) Subsection 61-2c-301(1)(i), which prohibits taking a dual role in a transaction;
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(h) Subsection 61-2c-301(1)(l), which prohibits engaging in false or misleading
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advertising;
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(i) Subsection 61-2c-301(1)(t), which prohibits advertising the ability to do licensed
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work if unlicensed;
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(j) Subsection 61-2c-302(5), which requires a mortgage entity to create and file a
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quarterly report of condition;
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(k) Subsection 61-2e-201(1), which requires registration;
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(l) Subsection 61-2e-203(4), which requires a notification of a change in ownership;
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(m) Subsection 61-2e-307(1)(c), which prohibits use of an unregistered fictitious name;
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(n) Subsection 61-2e-401(1)(c), which prohibits failure to respond to a division request;
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(o) Subsection 61-2f-201(1), which requires licensure;
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(p) Subsection 61-2f-206(1), which requires registration;
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(q) Subsection 61-2f-301(1), which requires notification of a specified legal action;
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(r) Subsection 61-2f-401(1)(a), which prohibits making a substantial misrepresentation;
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(s) Subsection 61-2f-401(3), which prohibits undertaking real estate while not affiliated
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with a principal broker;
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(t) Subsection 61-2f-401(9), which prohibits failing to keep specified records and
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prohibits failing to make the specified records available for division inspection;
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(u) Subsection 61-2f-401(12), which prohibits false, misleading, or deceptive
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advertising;
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(v) Subsection 61-2f-401(18), which prohibits failing to respond to a division request;
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(w) Subsection 61-2g-301(1), which requires licensure;
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(x) Subsection 61-2g-405(3), which requires making records required to be maintained
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available to the division;
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(y) Subsection 61-2g-501(2)(c), which requires a person to respond to a division request
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in an investigation within 10 days after the day on which the request is served;
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(z) Subsection 61-2g-502(2)(f), which prohibits using a nonregistered fictitious name;
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(aa) a rule made pursuant to any Subsection listed in this Subsection (4);
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(bb) an order of the division; or
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(cc) an order of the commission or board that oversees the person's profession.
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(5)(a) In accordance with Subsection (10), the division may assess a fine against a
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person for a violation of a provision listed in Subsection (4), as evidenced by:
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(i) an uncontested citation;
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(ii) a stipulated settlement; or
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(iii) a finding of a violation in an adjudicative proceeding.
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(b) The division may, in addition to or in lieu of a fine under Subsection (5)(a), order the
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person to cease and desist from an activity that violates a provision listed in
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Subsection (4).
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(6) Except as provided in Subsection (8)(d), the division may not use a citation to effect a
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license:
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(a) denial;
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(b) probation;
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(c) suspension; or
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(d) revocation.
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(7)(a) A citation issued by the division shall:
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(i) be in writing;
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(ii) describe with particularity the nature of the violation, including a reference to the
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provision of the statute, rule, or order alleged to have been violated;
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(iii) clearly state that the recipient must notify the division in writing within 20
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calendar days after the day on which the citation is served if the recipient wishes
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to contest the citation at a hearing conducted under Title 63G, Chapter 4,
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Administrative Procedures Act; and
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(iv) clearly explain the consequences of failure to timely contest the citation or to
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make payment of a fine assessed by the citation within the time period specified in
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the citation.
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(b) The division may issue a notice in lieu of a citation.
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(8)(a) A citation becomes final:
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(i) if within 20 calendar days after the day on which the citation is served, the person
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to whom the citation was issued fails to request a hearing to contest the citation; or
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(ii) if the director or the director's designee conducts a hearing pursuant to a timely
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request for a hearing and issues an order finding that a violation has occurred.
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(b) The division may extend, for cause, the 20-day period to contest a citation.
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(c) A citation that becomes the final order of the division due to a person's failure to
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timely request a hearing is not subject to further agency review.
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(d)(i) The division may refuse to issue, refuse to renew, suspend, revoke, or place on
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probation the license of a licensee who fails to comply with a citation after the
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citation becomes final.
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(ii) The failure of a license applicant to comply with a citation after the citation
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becomes final is a ground for denial of the license application.
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(9)(a) The division may not issue a citation under this section after the expiration of one
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year after the day on which the violation occurs.
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(b) The division may issue a notice to address a violation that is outside of the one-year
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citation period.
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(10) The director or the director's designee shall assess a fine with a citation in an amount
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that is no more than:
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(a) for a first offense, $1,000;
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(b) for a second offense, $2,000; and
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(c) for each offense subsequent to a second offense, $2,000 for each day of continued
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offense.
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(11)(a) An action for a first or second offense for which the division has not issued a
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final order does not preclude the division from initiating a subsequent action for a
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second or subsequent offense while the preceding action is pending.
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(b) The final order on a subsequent action is considered a second or subsequent offense,
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respectively, provided the preceding action resulted in a first or second offense,
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respectively.
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(12)(a) If a person does not pay a penalty, the director may collect the unpaid penalty by:
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(i) referring the matter to a collection agency; or
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(ii) bringing an action in a court with jurisdiction under Title 78A, Judiciary and
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Judicial Administration.
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(b) A county attorney or the attorney general of the state shall provide legal services to
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the director in an action to collect the penalty.
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(c) A court may award reasonable attorney fees and costs to the division in an action the
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division brings to enforce the provisions of this section.
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Section 2. Section 61-2f-102 is amended to read:
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61-2f-102 . Definitions.
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As used in this chapter:
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(1) "Admonition" means a public discipline that declares the conduct of a person as
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improper and does not identify the person.
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(2)(a) "Advertisement" means a notice or announcement meant to:
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(i) promote the availability of real estate, an option on real estate, or a business
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opportunity for sale, exchange, auction, or lease;
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(ii) offer specific types of brokerage services; or
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(iii) specifically solicit the public to contact that licensee for more information.
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(b) "Advertisement" does not include a social media post that generally identifies the
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person as being engaged in the profession of real estate if the social media post does
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not:
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(i) promote the availability of real estate, an option on real estate, or a business
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opportunity for sale, exchange, auction, or lease;
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(ii) offer specific types of brokerage services; or
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(iii) specifically solicit the public to contact that licensee for more information.
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(3) "Advertising" or "advertise" means placing or directing the placement of an
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advertisement.
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[(1)] (4) "Associate broker" means an individual who is:
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(a) employed or engaged as an independent contractor by or on behalf of a principal
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broker to perform an act described in Subsection [(20)] (29) for valuable
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consideration; and
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(b) licensed under this chapter as an associate broker.
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[(2)] (5) "Branch broker" means an associate broker who manages a principal broker's
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branch office under the supervision of the principal broker.
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[(3)] (6) "Branch office" means a principal broker's real estate brokerage office that is not
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the principal broker's main office.
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(7) "Brokerage" means an entity registered or required to be registered with the division
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pursuant to Section 61-2f-206.
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(8) "Brokerage name" means:
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(a) the name of the brokerage as shown on division records;
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(b) the name of a branch office of the brokerage; or
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(c) a DBA of the brokerage.
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[(4)] (9) "Business day" means a day other than:
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(a) a Saturday;
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(b) a Sunday; or
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(c) a federal or state holiday.
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[(5)] (10) "Business opportunity" means the sale, lease, or exchange of any business that
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includes an interest in real estate.
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[(6)] (11) "Commission" means the Real Estate Commission established under this chapter.
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[(7)] (12) "Concurrence" means the entities given a concurring role must jointly agree for
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action to be taken.
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[(8)] (13) "Condominium homeowners' association" means the condominium unit owners
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acting as a group in accordance with declarations and bylaws.
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[(9)] (14)(a) "Condominium hotel" means one or more condominium units that are
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operated as a hotel.
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(b) "Condominium hotel" does not mean a hotel consisting of condominium units, all of
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which are owned by a single entity.
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[(10)] (15) "Condominium unit" means the same as that term is defined in Section 57-8-3.
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[(11)] (16) "Director" means the director of the Division of Real Estate.
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[(12)] (17) "Division" means the Division of Real Estate.
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(18) "Doing business as" or "DBA" means a name that is registered with the Division of
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Corporations and Commercial Code that allows a business to operate under a name
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different from the business's legal name.
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[(13)] (19) "Dual broker" means a principal broker of a real estate sales brokerage who
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obtains from the division a dual broker license in order to function as the principal
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broker of a property management company that is a separate entity from the real estate
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sales brokerage.
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[(14)] (20) "Entity" means:
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(a) a corporation;
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(b) a partnership;
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(c) a limited liability company;
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(d) a company;
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(e) an association;
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(f) a joint venture;
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(g) a business trust;
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(h) a trust; or
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(i) any organization similar to an entity described in Subsections [(14)(a)] (20)(a)
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through (h).
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[(15)] (21) "Executive director" means the director of the Department of Commerce.
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(22) "Factory built housing" means a manufactured home or mobile home.
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[(16)] (23) "Foreclosure rescue" means, for compensation or with the expectation of
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receiving valuable consideration, to:
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(a) engage, or offer to engage, in an act that:
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(i) the person represents will assist a borrower in preventing a foreclosure; and
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(ii) relates to a transaction involving the transfer of title to residential real property; or
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(b) as an employee or agent of another person:
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(i) solicit, or offer that the other person will engage in an act described in Subsection [
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(16)(a)] (23)(a); or
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(ii) negotiate terms in relationship to an act described in Subsection [(16)(a)] (23)(a).
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[(17)] (24) "Loan modification assistance" means, for compensation or with the expectation
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of receiving valuable consideration, to:
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(a) act, or offer to act, on behalf of a person to:
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(i) obtain a loan term of a residential mortgage loan that is different from an existing
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loan term including:
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(A) an increase or decrease in an interest rate;
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(B) a change to the type of interest rate;
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(C) an increase or decrease in the principal amount of the residential mortgage
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loan;
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(D) a change in the number of required period payments;
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(E) an addition of collateral;
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(F) a change to, or addition of, a prepayment penalty;
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(G) an addition of a cosigner; or
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(H) a change in persons obligated under the existing residential mortgage loan; or
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(ii) substitute a new residential mortgage loan for an existing residential mortgage
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loan; or
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(b) as an employee or agent of another person:
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(i) solicit, or offer that the other person will engage in an act described in Subsection [
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(17)(a)] (24)(a); or
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(ii) negotiate terms in relationship to an act described in Subsection [(17)(a)] (24)(a).
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[(18)] (25) "Main office" means the address which a principal broker designates with the
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division as the principal broker's primary brokerage office.
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(26) "Manufactured home" means the same as that term is defined in Section 15A-1-302.
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(27) "Mobile home" means the same as that term is defined in Section 15A-1-302.
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[(19)] (28) "Person" means an individual or entity.
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[(20)] (29) "Principal broker" means an individual who is licensed or required to be licensed
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as a principal broker under this chapter who:
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(a) sells or lists for sale real estate, including real estate being sold as part of a
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foreclosure rescue, [or ]a business opportunity, or, unless licensed with the Division
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of Professional Licensing as a dealer under Title 58, Chapter 56, Building Inspector
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and Factory Built Housing Licensing Act, factory built housing, with the expectation
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of receiving valuable consideration;
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(b) buys, exchanges, or auctions real estate, an option on real estate, a business
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opportunity[, or an improvement on real estate] , or, unless licensed with the Division
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of Professional Licensing as a dealer under Title 58, Chapter 56, Building Inspector
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and Factory Built Housing Licensing Act, factory built housing, with the expectation
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of receiving valuable consideration;
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(c) advertises, offers, attempts, or otherwise holds the individual out to be engaged in the
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business described in Subsection [(20)(a)] (29)(a) or (b);
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(d) is employed by or on behalf of the owner of real estate or by a prospective purchaser
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of real estate and performs an act described in Subsection [(20)(a)] (29)(a), whether
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the individual's compensation is at a stated salary, a commission basis, upon a salary
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and commission basis, or otherwise;
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(e) with the expectation of receiving valuable consideration, manages property owned by
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another person;
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(f) advertises or otherwise holds the individual out to be engaged in property
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management;
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(g) with the expectation of receiving valuable consideration, assists or directs in the
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procurement of prospects for or the negotiation of a transaction listed in Subsections [
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(20)(a)] (29)(a) and (e);
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(h) except for a mortgage lender, title insurance producer, or an employee of a mortgage
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lender or title insurance producer, assists or directs in the closing of a real estate
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transaction with the expectation of receiving valuable consideration;
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(i) engages in foreclosure rescue; or
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(j) advertises, offers, attempts, or otherwise holds the person out as being engaged in
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foreclosure rescue.
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[(21)] (30)(a) "Property management" means engaging in, with the expectation of
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receiving valuable consideration, the management of real estate owned by another
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person or advertising or otherwise claiming to be engaged in property management
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by:
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(i) advertising for, arranging, negotiating, offering, or otherwise attempting or
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participating in a transaction calculated to secure the rental or leasing of real estate;
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(ii) collecting, agreeing, offering, or otherwise attempting to collect rent for the real
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estate and accounting for and disbursing the money collected; or
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(iii) authorizing expenditures for repairs to the real estate.
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(b) "Property management" does not include:
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(i) hotel or motel management;
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(ii) rental of tourist accommodations, including hotels, motels, tourist homes,
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condominiums, condominium hotels, mobile home park accommodations,
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campgrounds, or similar public accommodations for a period of less than 30
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consecutive days, and the management activities associated with these rentals; or
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(iii) the leasing or management of surface or subsurface minerals or oil and gas
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interests, if the leasing or management is separate from a sale or lease of the
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surface estate.
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[(22)] (31) "Property management sales agent" means a sales agent who:
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(a) is affiliated with a dual broker through the dual broker's property management
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company; and
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(b) is designated by the dual broker as a property management sales agent.
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[(23)] (32) "Real estate" includes leaseholds and business opportunities involving real
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property.
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[(24)] (33)(a) "Regular salaried employee" means an individual who performs a service
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for wages or other remuneration, whose employer withholds federal employment
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taxes under a contract of hire, written or oral, express or implied.
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(b) "Regular salaried employee" does not include an individual who performs services
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on a project-by-project basis or on a commission basis.
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[(25)] (34) "Reinstatement" means restoring a license that has expired or has been
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suspended.
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[(26)] (35) "Reissuance" means the process by which a licensee may obtain a license
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following revocation of the license.
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[(27)] (36) "Renewal" means extending a license for an additional licensing period on or
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before the date the license expires.
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(37) "Reprimand" means a public discipline that declares the conduct of a person as
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improper and includes the name of the person.
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[(28)] (38) "Sales agent" means an individual who is:
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(a) affiliated with a principal broker, either as an independent contractor or an employee
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as provided in Section 61-2f-303, to perform for valuable consideration an act
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described in Subsection [(20)] (29); and
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(b) licensed under this chapter as a sales agent.
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(39) "Transaction" means, whether complete or incomplete:
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(a) a purchase of real estate;
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(b) a sale of real estate;
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(c) an exchange of real estate;
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(d) a lease of real estate;
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(e) an auction of real estate;
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(f) management of real estate;
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(g) an option on real estate; or
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(h) a business opportunity.
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[(29)] (40) "Vulnerable adult" means the same as that term is defined in Section 26B-6-201.
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Section 3. Section 61-2f-206 is amended to read:
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61-2f-206 . Registration of person or branch office -- Certification of education
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providers and courses -- Specialized licenses.
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(1)(a) A person may not engage in an activity described in Section 61-2f-201, unless:
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(i) the person is registered with the division[.] ; or
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(ii) an exemption to registration applies.
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(b) To register with the division under this Subsection (1), a person shall submit to the
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division:
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(i) an application in a form required by the division;
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(ii) evidence of an affiliation with a principal broker;
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(iii) evidence that the person is registered and in good standing with the Division of
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Corporations and Commercial Code; and
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(iv) a registration fee established by the commission with the concurrence of the
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division under Section 63J-1-504.
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(c) The division may terminate a person's registration if:
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(i) the person's registration with the Division of Corporations and Commercial Code
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has been expired for at least three years; and
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(ii) the person's license with the division has been inactive for at least three years.
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(2)(a) A principal broker shall register with the division each of the principal broker's
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branch offices.
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(b) To register a branch office with the division under this Subsection (2), a principal
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broker shall submit to the division:
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(i) an application in a form required by the division; and
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(ii) a registration fee established by the commission with the concurrence of the
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division under Section 63J-1-504.
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(3)(a) In accordance with rules made by the commission with the concurrence of the
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division and in accordance with Title 63G, Chapter 3, Utah Administrative
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Rulemaking Act, the division shall certify:
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(i) a real estate school;
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(ii) a course provider; or
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(iii) an instructor.
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(b) In accordance with rules made by the commission in accordance with Title 63G,
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Chapter 3, Utah Administrative Rulemaking Act, subject to concurrence by the
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division, the division shall certify a continuing education course that is required
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under this chapter.
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(4) Except as provided under this chapter or by rule the commission makes in accordance
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with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, a principal broker may
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not be responsible for more than one registered entity at the same time.
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(5) A principal broker:
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(a) shall exercise active and reasonable supervision of the principal broker's main office
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in accordance with this chapter and rules the commission makes in accordance with
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Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
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(b) may supervise a branch office affiliated with the principal broker at the same time
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the principal broker exercises the supervision required under Subsection (5)(a).
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(6)(a) A principal broker may designate a branch broker to supervise a branch office
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affiliated with the principal broker.
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(b) A branch broker shall exercise active and reasonable supervision, in accordance with
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this chapter and rules the commission makes in accordance with Title 63G, Chapter
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3, Utah Administrative Rulemaking Act, of each branch office the principal broker
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designates the branch broker to supervise.
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(7)(a) In addition to issuing a principal broker license, associate broker license, or sales
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agent license authorizing the performance of an act set forth in Section 61-2f-201, the
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division may issue a specialized sales license or specialized property management
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license with the scope of practice limited to the specialty.
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(b) An individual may hold a specialized license in addition to a license as a principal
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broker, associate broker, or a sales agent.
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(c) A sales agent who is affiliated with a dual broker may act as a property management
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sales agent if:
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(i) the dual broker designates the sales agent as a property management sales agent;
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and
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(ii) the sales agent pays to the division a property management sales agent
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designation fee in an amount determined by the division in accordance with
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Section 63J-1-504.
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(d) A property management sales agent may simultaneously provide both property
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management services and real estate sales services under the supervision of a dual
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broker as provided by the commission with the concurrence of the division by rule
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made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
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(8) The commission may determine, by rule made in accordance with Title 63G, Chapter 3,
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Utah Administrative Rulemaking Act, subject to concurrence by the division, licensing
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requirements related to this section for a principal broker, associate broker, sales agent,
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dual broker, property management sales agent, or for a specialized license described in
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Subsection (7), including:
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(a) prelicensing and postlicensing education requirements;
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(b) examination requirements;
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(c) affiliation with real estate brokerages or property management companies;
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(d) property management sales agent:
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(i) designation procedures;
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(ii) allowable scope of practice; and
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(iii) division fees;
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(e) what constitutes active and reasonable supervision for:
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(i) a principal broker when supervising a branch broker or sales agent; and
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(ii) a branch broker when supervising a sales agent; and
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(f) other licensing procedures.
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Section 4. Section 61-2f-308 is amended to read:
428
61-2f-308 . Brokerage agreements.
429
(1) As used in this section:
430
(a) "Brokerage agreement" means a written agreement between a client and a principal
431
broker:
432
(i)(A) to list for sale, lease, or exchange, real estate, an option on real estate, or an
433
improvement on real estate; or
434
(B) for representation in the purchase, lease, or exchange of real estate, an option
435
on real estate, or an improvement on real estate; and
- 13 - H.B. 419 Enrolled Copy
436
(ii) that gives the principal broker the expectation of receiving valuable consideration
437
in exchange for the principal broker's services.
438
(b) "Client" means a person who makes an exclusive brokerage agreement with a
439
principal broker under Subsection (1)(d).
440
(c) "Closed" means that:
441
(i) the documents required to be executed under the contract are executed;
442
(ii) the money required to be paid by either party under the contract is paid in the
443
form of collected or cleared funds;
444
(iii) the proceeds of any new loan are delivered by the lender to the seller; and
445
(iv) the applicable documents are recorded in the office of the county recorder for the
446
county in which the real estate is located.
447
(d) "Exclusive brokerage agreement" means a brokerage agreement that gives the
448
principal broker the sole right to act as the agent or representative of the client for the
449
purchase, sale, lease, or exchange of real estate, an option on real estate, or an
450
improvement on real estate.
451
(2)(a) Except as provided in Subsection (2)(b), a principal broker subject to an exclusive
452
brokerage agreement shall:
453
(i) accept delivery of and present to the client offers and counteroffers to buy, lease,
454
or exchange the client's real estate;
455
(ii) assist the client in developing, communicating, and presenting offers,
456
counteroffers, and notices; and
457
(iii) answer any question the client has concerning:
458
(A) an offer;
459
(B) a counteroffer;
460
(C) a notice; and
461
(D) a contingency.
462
(b) A principal broker subject to an exclusive brokerage agreement need not comply
463
with Subsection (2)(a) after:
464
(i)(A) an agreement for the sale, lease, or exchange of the real estate, option on
465
real estate, or improvement on real estate is signed;
466
(B) the contingencies related to the sale, lease, or exchange are satisfied or
467
waived; and
468
(C) the sale, lease, or exchange is closed; or
469
(ii) the exclusive brokerage agreement expires or terminates.
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470
[(3) A principal broker who violates this section is subject to Sections 61-2f-404 and
471
61-2f-405.]
472
[(4)] (3)(a) Subject to Subsection (4)(b), a principal broker who represents a buyer may
473
directly contact a seller who is subject to a brokerage agreement or an exclusive
474
brokerage agreement if:
475
(i) the seller's principal broker gives the buyer's principal broker written
476
authorization; or
477
(ii) subject to Subsection (4)(c), the seller gives the buyer's principal broker written
478
authorization.
479
(b) If a buyer's principal broker obtains a written authorization described in Subsection
480
(4)(a), the buyer's principal broker may contact the seller directly to:
481
(i) discuss items related to a real estate transaction between the buyer and the seller;
482
(ii) provide the seller with blank [state-approved ]forms; and
483
(iii) negotiate the terms of a real estate transaction between the buyer and the seller.
484
(c) A buyer's principal broker may not solicit from a seller a written authorization
485
described in Subsection (4)(a)(ii).
486
[(5)] (4) A principal broker who, in accordance with Subsection (4), engages in the conduct
487
described in Subsection (4)(b) is not, by that conduct, representing that the principal
488
broker is acting on behalf of both the buyer and the seller.
489
(5) The following conduct by a principal broker who represents a seller does not create an
490
agency relationship with a buyer unrepresented by a principal broker:
491
(a) contacting the buyer directly to discuss items related to a real estate transaction
492
between the seller and buyer;
493
(b) providing the buyer with blank forms; or
494
(c) negotiating the terms of a real estate transaction between the seller and the buyer.
495
Section 5. Section 61-2f-309 is enacted to read:
496
61-2f-309 . Record requirements.
497
(1) A brokerage shall make or possess any applicable record required for the brokerage to
498
maintain by rule made by the commission pursuant to Section 61-2f-103 for the time
499
period specified in Subsection (2).
500
(2) A brokerage shall maintain and safeguard in the brokerage's possession a record
501
described in Subsection (1) for three years following:
502
(a) the day the transaction either closes or fails;
503
(b) in a lease transaction, the day of the commencement of the lease;
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504
(c) the day an offer is rejected; or
505
(d) the end of the term of a property management agreement.
506
Section 6. Section 61-2f-401 is amended to read:
507
61-2f-401 . Grounds for disciplinary action.
508
The following acts are unlawful and grounds for disciplinary action for a person licensed
509
or required to be licensed under this chapter:
510
(1)(a) making a substantial misrepresentation, including in a licensure statement;
511
(b) making an intentional misrepresentation;
512
(c) pursuing a continued and flagrant course of misrepresentation;
513
(d) making a false representation or promise through an agent, sales agent, advertising,
514
or otherwise; or
515
(e) making a false representation or promise of a character likely to influence, persuade,
516
or induce;
517
(2) acting for more than one party in a transaction without the informed written consent of
518
the parties;
519
(3)(a) acting as an associate broker or sales agent while not affiliated with a principal
520
broker;
521
(b) representing or attempting to represent a principal broker other than the principal
522
broker with whom the person is affiliated; or
523
(c) representing as sales agent or having a contractual relationship similar to that of sales
524
agent with a person other than a principal broker;
525
(4)(a) failing, within a reasonable time, to account for or to remit money that belongs to
526
another and comes into the person's possession;
527
(b) commingling money described in Subsection (4)(a) with the person's own money; or
528
(c) diverting money described in Subsection (4)(a) from the purpose for which the
529
money is received;
530
(5) paying or offering to pay valuable consideration to a person not licensed under this
531
chapter, except that valuable consideration may be shared:
532
(a) with a principal broker of another jurisdiction; or
533
(b) as provided under:
534
(i) Title 16, Chapter 10a, Utah Revised Business Corporation Act;
535
(ii) Title 16, Chapter 11, Professional Corporation Act; or
536
(iii) Title 48, Chapter 3a, Utah Revised Uniform Limited Liability Company Act, as
537
appropriate pursuant to Section 48-3a-1405;
- 16 - Enrolled Copy H.B. 419
538
(6) for a principal broker, paying or offering to pay a sales agent or associate broker who is
539
not affiliated with the principal broker at the time the sales agent or associate broker
540
earned the compensation;
541
(7) being incompetent to act as a principal broker, associate broker, or sales agent in such
542
manner as to safeguard the interests of the public;
543
(8) failing to voluntarily furnish a copy of a document to the parties before and after the
544
execution of a document;
545
(9) a brokerage failing to keep and make available for inspection by the division a record of
546
each transaction, including:
547
(a) the names of buyers and sellers or lessees and lessors;
548
(b) the identification of real estate;
549
(c) the sale or rental price;
550
(d) money received in trust;
551
(e) agreements or instructions from buyers and sellers or lessees and lessors; and
552
(f) any other information required by rule;
553
(10) failing to disclose, in writing, in the purchase, sale, or rental of real estate, whether the
554
purchase, sale, or rental is made for that person or for an undisclosed principal;
555
(11) regardless of whether the crime is related to the business of real estate:
556
(a) be convicted of:
557
(i) a felony; or
558
(ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
559
(A) a class A misdemeanor;
560
(B) a class B misdemeanor; or
561
(C) a criminal offense comparable to a class A or class B misdemeanor;
562
(b) plead guilty or nolo contendere to:
563
(i) a felony; or
564
(ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
565
(A) a class A misdemeanor;
566
(B) a class B misdemeanor; or
567
(C) a criminal offense comparable to a class A or class B misdemeanor;
568
(c) enter into a plea in abeyance agreement in relation to:
569
(i) a felony; or
570
(ii) any of the following involving fraud, misrepresentation, theft, or dishonesty:
571
(A) a class A misdemeanor;
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572
(B) a class B misdemeanor; or
573
(C) a criminal offense comparable to a class A or class B misdemeanor;
574
(12) at the time of placing an advertisement:
575
(a) advertising the availability of real estate or the services of a licensee in a false,
576
misleading, or deceptive manner; or
577
(b) failing to include within the advertisement the brokerage name with which a person
578
who is licensed is affiliated or, if the advertisement is placed online or in a digital
579
format, a link to a website or media platform that identifies the brokerage name
580
within one click;
581
(13) in the case of a principal broker or a branch broker, failing to exercise active and
582
reasonable supervision, as the commission may define by rule made in accordance with
583
Title 63G, Chapter 3, Utah Administrative Rulemaking Act, over the activities of the
584
principal broker's or branch broker's licensed or unlicensed staff;
585
(14) violating or disregarding:
586
(a) this chapter;
587
(b) an order of the commission; or
588
(c) the rules adopted by the commission and the division;
589
(15) breaching a fiduciary duty owed by a licensee to the licensee's principal in a real estate
590
transaction;
591
(16) any other conduct which constitutes dishonest dealing;
592
(17) having one of the following suspended, revoked, surrendered, or cancelled on the basis
593
of misconduct in a professional capacity that relates to character, honesty, integrity, or
594
truthfulness:
595
(a) a real estate license, registration, or certificate issued by another jurisdiction; or
596
(b) another license, registration, or certificate to engage in an occupation or profession
597
issued by this state or another jurisdiction;
598
(18) failing to respond to a request by the division in an investigation authorized under this
599
chapter within 10 business days after the day on which the request is served, including:
600
(a) failing to respond to a subpoena;
601
(b) withholding evidence; or
602
(c) failing to produce documents or records;
603
(19) in the case of a dual licensed title licensee as defined in Section 31A-2-402:
604
(a) providing a title insurance product or service without the approval required by
605
Section 31A-2-405; or
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606
(b) knowingly providing false or misleading information in the statement required by
607
Subsection 31A-2-405(2);
608
(20) violating an independent contractor agreement between a principal broker and a sales
609
agent or associate broker as evidenced by a final judgment of a court;
610
(21) violating Title 57, Chapter 30, Residential Property Service Agreements;
611
(22)(a) engaging in an act of loan modification assistance that requires licensure as a
612
mortgage officer under Chapter 2c, Utah Residential Mortgage Practices and
613
Licensing Act, without being licensed under that chapter;
614
(b) engaging in an act of foreclosure rescue without entering into a written agreement
615
specifying what one or more acts of foreclosure rescue will be completed;
616
(c) inducing a person who is at risk of foreclosure to hire the licensee to engage in an act
617
of foreclosure rescue by:
618
(i) suggesting to the person that the licensee has a special relationship with the
619
person's lender or loan servicer; or
620
(ii) falsely representing or advertising that the licensee is acting on behalf of:
621
(A) a government agency;
622
(B) the person's lender or loan servicer; or
623
(C) a nonprofit or charitable institution; or
624
(d) recommending or participating in a foreclosure rescue that requires a person to:
625
(i) transfer title to real estate to the licensee or to a third-party with whom the
626
licensee has a business relationship or financial interest;
627
(ii) make a mortgage payment to a person other than the person's loan servicer; or
628
(iii) refrain from contacting the person's:
629
(A) lender;
630
(B) loan servicer;
631
(C) attorney;
632
(D) credit counselor; or
633
(E) housing counselor;
634
(23) taking or removing from the premises of a main office or a branch office, or otherwise
635
limiting a real estate brokerage's access to or control over, a record that:
636
(a)(i) the real estate brokerage's licensed staff, unlicensed staff, or affiliated
637
independent contractor prepared; and
638
(ii) is related to the business of:
639
(A) the real estate brokerage; or
- 19 - H.B. 419 Enrolled Copy
640
(B) an associate broker, a branch broker, or a sales agent of the real estate
641
brokerage; or
642
(b) is related to the business administration of the real estate brokerage;
643
(24) as a principal broker, placing a lien on real property, unless authorized by law;
644
(25) as a sales agent or associate broker, placing a lien on real property for an unpaid
645
commission or other compensation related to real estate brokerage services; or
646
(26) failing to timely disclose to a buyer or seller an affiliated business arrangement, as
647
defined in Section 31A-23a-1001, in accordance with the federal Real Estate Settlement
648
Procedures Act, 12 U.S.C. Sec. 2601 et seq. and any rules made thereunder.
649
Section 7. Section 61-2f-402 is amended to read:
650
61-2f-402 . Investigations -- Disciplinary actions.
651
(1) The division may conduct a public or private investigation within or outside of this state
652
as the division considers necessary to determine whether a person has violated, is
653
violating, or is about to violate this chapter or any rule or order under this chapter.
654
(2) To aid in the enforcement of this chapter or in the prescribing of rules and forms under
655
this chapter, the division may require or permit a person to file a statement in writing,
656
under oath or otherwise as to the facts and circumstances concerning the matter to be
657
investigated.
658
(3)(a) For the purpose of the investigation described in Subsection (1), the division or an
659
employee designated by the division may:
660
[(a)] (i) administer an oath or affirmation;
661
[(b)] (ii) issue a subpoena that requires:
662
[(i)] (A) the attendance and testimony of a witness; or
663
[(ii)] (B) the production of evidence;
664
[(c)] (iii) take evidence;
665
[(d)] (iv) require the production of a book, paper, contract, record, other document, or
666
information relevant to the investigation; and
667
[(e)] (v) serve a subpoena by certified mail.
668
(b) The division may not require the production of evidence, book, paper, contract,
669
record, other document, or information required to be kept by a brokerage, or
670
licensee pursuant to Section 61-2f-309 after the expiration of the time in which the
671
brokerage is required to maintain and safeguard the record as described in Section
672
61-2f-309.
673
(4)(a) A court of competent jurisdiction shall enforce, according to the practice and
- 20 - Enrolled Copy H.B. 419
674
procedure of the court, a subpoena issued by the division.
675
(b) The division shall pay any witness fee, travel expense, mileage, or any other fee
676
required by the service statutes of the state where the witness or evidence is located.
677
(5)(a) Except as provided in Subsections (5)(b) and (c), the division shall commence [a
678
disciplinary action ] an adjudicative proceeding under this chapter no later than the
679
earlier of the following:
680
(i) [four years ] two years after the day on which the violation is reported to the
681
division; or
682
(ii) the date the brokerage is no longer required to keep and maintain the records as
683
provided in Section 61-2f-309.
684
[(ii) 10 years after the day on which the violation occurred.]
685
[(b) Except as provided in Subsection (5)(c), the division shall commence a disciplinary
686
action within four years after the day on which a violation occurred, if the violation
687
was of:]
688
[(i) Section 61-2f-206;]
689
[(ii) Subsection 61-2f-401(8), which prohibits failure to voluntarily furnish a copy of
690
a document to the parties before and after the execution of a document; or]
691
[(iii) Subsection 61-2f-401(18), which prohibits failure to respond to a division
692
request in an investigation within 10 days after the day on which the request is
693
served.]
694
[(c)] (b) The division may commence [a disciplinary action] an adjudicative proceeding
695
under this chapter after the time period described in Subsection (5)(a)[ or (b)] expires
696
if:
697
(i)(A) the [disciplinary action] adjudicative proceeding is in response to a civil or
698
criminal judgment or settlement; and
699
(B) the division [initiates the disciplinary action] commences an adjudicative
700
proceeding no later than one year after the day on which the judgment is issued
701
or the settlement is final; or
702
(ii) the division and the person subject to [a disciplinary action] an adjudicative
703
proceeding enter into a written stipulation to extend the time period described in
704
Subsection (5)(a)[ or (b)].
705
(c) The time period described in Subsection (5)(a) is tolled during the division's
706
enforcement of a subpoena under Subsection (4), including any resulting appeals.
707
(6)(a) The division may publish notices of admonition, reprimand, suspension,
- 21 - H.B. 419 Enrolled Copy
708
revocation, and surrender with discipline pending in the division newsletter.
709
(b) Nothing in this Subsection (6) shall be construed to restrict the division's publication
710
of information, including orders, irrespective of their style or format, on the division's
711
website.
712
(c) Nothing in this Subsection (6) shall be construed to restrict the division's publication
713
of information as required by Title 52, Chapter 4, Open and Public Meetings Act.
714
Section 8. Section 61-2f-404 is amended to read:
715
61-2f-404 . Disciplinary action -- Judicial review.
716
(1)(a) On the basis of a violation of this chapter, the commission with the concurrence of
717
the director, may issue an order:
718
(i) imposing an educational requirement;
719
(ii) imposing a civil penalty not to exceed the greater of:
720
(A) except as provided in Subsection (1)(a)(ii)(B), $5,000 for each violation;
721
(B) $10,000 for each violation, if the person knew or should have known that the
722
property owner was an individual 65 years old or older, or a vulnerable adult; or
723
(C) the amount of any gain or economic benefit derived from each violation;
724
(iii) taking any of the following actions related to a license, registration, or certificate:
725
(A) revoking;
726
(B) suspending;
727
(C) placing on probation;
728
(D) denying the renewal, reinstatement, or application for an original license,
729
registration, or certificate; or
730
(E) in the case of denial or revocation of a license, registration, or certificate,
731
setting a waiting period for an applicant to apply for a license, registration, or
732
certificate under this title;
733
(iv) issuing a cease and desist order;
734
(v) authorizing an admonition;
735
(vi) authorizing a reprimand;
736
(vii) authorizing surrender with discipline pending;
737
[(v)] (viii) modifying an action described in Subsections (1)(a)(i) through [(iv)] (vii) if
738
the commission finds that the person complies with court ordered restitution; or
739
[(vi)] (ix) doing any combination of Subsections (1)(a)(i) through [(v)] (viii).
740
(b) In determining appropriate action under Subsection (1)(a), the commission shall
741
consider the following factors:
- 22 - Enrolled Copy H.B. 419
742
(i) the seriousness, nature, circumstances, extent, and persistence of the conduct
743
constituting the violation;
744
(ii) the harm to other persons resulting either directly or indirectly from the violation;
745
(iii)(A) the cooperation by the person in any inquiry conducted by the division
746
concerning the violation;
747
(B) efforts by the person to prevent future occurrences of the violation; and
748
(C) efforts by the person to mitigate the harm caused by the violation, including
749
any disgorgement or restitution made to the other persons harmed by the acts
750
of the person;
751
(iv) the history of previous violations by the person;
752
(v) the need to deter the person or other persons from committing the violation in the
753
future;
754
(vi) whether the person knew or should have known that the property owner was an
755
individual 65 years old or older, or a vulnerable adult;
756
(vii) any direct or indirect compensation or economic benefit the person committing
757
the violation received; and
758
(viii) other matters as justice may require.
759
[(b)] (c)(i) If the commission with the concurrence of the director issues an order that
760
orders a fine or educational requirements as part of a disciplinary action against a
761
person, including a stipulation and order, the commission shall state in the order
762
the deadline by which the person shall comply with the fine or educational
763
requirements.
764
(ii) If a person fails to comply by the stated deadline:
765
(A) the person's license, registration, or certificate is automatically suspended:
766
(I) beginning the day specified in the order as the deadline for compliance; and
767
(II) ending the day on which the person complies in full with the order; and
768
(B) if the person fails to pay a fine required by an order, the division may begin a
769
collection process:
770
(I) established by the division, with the concurrence of the commission, by rule
771
made in accordance with Title 63G, Chapter 3, Utah Administrative
772
Rulemaking Act; and
773
(II) subject to Title 63A, Chapter 3, Part 5, Office of State Debt Collection.
774
[(c)] (d) In a manner determined by the division, the division shall inform a principal
775
broker:
- 23 - H.B. 419 Enrolled Copy
776
(i) with whom a licensee is affiliated of:
777
(A) a complaint made to the division against the licensee that requires a written
778
response from the licensee;
779
(B) a violation alleged against the licensee by the division;
780
(C) the time and place of any disciplinary hearing regarding the licensee; and
781
(D) the resolution of a violation alleged described in Subsection [(1)(c)(i)(B)]
782
(1)(d)(i)(B); and
783
(ii) upon inquiry from a principal broker regarding an affiliated licensee:
784
(A) disciplinary actions made by the division against the licensee for the past five
785
years; and
786
(B) the resolution of the disciplinary actions described in Subsection [(1)(c)(ii)(A)]
787
(1)(d)(ii)(A).
788
[(d)] (e) A person previously licensed under this chapter remains responsible for, and is
789
subject to disciplinary action for, an act the person committed while the person was
790
licensed in violation of this chapter or an administrative rule in effect at the time the
791
person committed the act, regardless of whether the person is currently licensed.
792
(2)(a) An applicant, certificate holder, licensee, registrant, or person aggrieved,
793
including the complainant, may obtain agency review by the executive director and
794
judicial review of any adverse ruling, order, or decision of the division.
795
(b) If an applicant, certificate holder, registrant, or licensee prevails in the appeal and the
796
court finds that the state action was undertaken without substantial justification, the
797
court may award reasonable litigation expenses to the applicant, certificate holder,
798
registrant, or licensee as provided under Title 78B, Chapter 8, Part 5, Small Business
799
Equal Access to Justice Act.
800
(c)(i) An order, ruling, or decision of the division shall take effect and become
801
operative 30 days after the service of the order, ruling, or decision unless
802
otherwise provided in the order.
803
(ii) If an appeal is taken by a licensee, registrant, or certificate holder, the division
804
may stay enforcement of an order, ruling, or decision in accordance with Section
805
63G-4-405.
806
(iii) An appeal is governed by the Utah Rules of Appellate Procedure.
807
(3) The commission and the director shall comply with the procedures and requirements of
808
Title 63G, Chapter 4, Administrative Procedures Act, in an adjudicative proceeding.
809
Section 9. Section 61-2f-405 is amended to read:
- 24 - Enrolled Copy H.B. 419
810
61-2f-405 . Other penalties for violation of chapter.
811
[(1)(a) An individual required to be licensed under this chapter who violates this
812
chapter, in addition to being subject to a license sanction or a fine ordered by the
813
commission, is, upon conviction of a first violation, guilty of a class A misdemeanor.]
814
[(b) For a conviction under this Subsection (1), imprisonment shall be for a term not to
815
exceed six months.]
816
[(2)(a) Upon conviction of a second or subsequent violation, an individual is guilty of a
817
third degree felony.]
818
[(b) Imprisonment for a conviction under this Subsection (2)(a) shall be for a term not to
819
exceed two years.]
820
[(3)] (1) An officer or agent of a corporation, a member or agent of a partnership or
821
association, or an individual in a similar position of another type of entity who
822
personally participates in or is an accessory to any violation of this chapter by the entity
823
is subject to the penalties prescribed for an individual.
824
[(4)] (2) If a person receives money or its equivalent, as commission, compensation, or
825
profit by or in consequence of a violation of this chapter, that person is liable for an
826
additional penalty of not less than the amount of the money received and not more than
827
three times the amount of money received, as may be determined by the court. This
828
penalty may be sued for in any court of competent jurisdiction, and recovered by any
829
person aggrieved for the person's own use and benefit.
830
[(5)] (3) A fine imposed by the commission and the director under this chapter shall,
831
notwithstanding Section 13-1-2, be deposited into the Real Estate Education, Research,
832
and Recovery Fund to be used in a manner consistent with the requirements of Part 5,
833
Real Estate Education, Research, and Recovery Fund Act.
834
Section 10. Effective Date.
835
This bill takes effect on May 7, 2025.
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