DAR File No. 26838

Commerce, Real Estate

R162-3

License Status Changes

NOTICE OF PROPOSED RULE

DAR File No.: 26838
Filed: 12/05/2003, 10:27
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

It is necessary to amend the rule to comply with statutory changes in continuing education and license activation requirements that were made by 2003 Senate Bill 198. The Division also needs to amend the rule so that its language will not preclude on-line license renewal when the technology to do on-line renewal is available to the Division. (DAR NOTE: S.B. 198 is found at UT L 2003 Ch 264, and was effective May 5, 2003.)

Summary of the rule or change:

The continuing education requirements for activation of licenses and the requirements for reinstatement of expired licenses are conformed to the changes in the statute by S.B. 198, and the types of continuing education courses that will be acceptable for these purposes are specified. Requirements that renewal forms and other documents be mailed to the Division have been eliminated. Provisions allowing licensees to certify that they have completed the required continuing education courses instead of mailing course certificates have been added to facilitate the on-line renewal process.

State statutory or constitutional authorization for this rule:

Subsection 61-2-5.5(1)(a)

Anticipated cost or savings to:

the state budget:

No cost or savings is anticipated. The changes in continuing education hours for real estate licensees do not affect State government and therefore no cost or savings is anticipated as a result of those changes. Allowing licensees to renew on-line in the future may save the Division staff costs in an unknown amount, but it is anticipated that any savings in the cost of licensing staff would be offset by increased investigative costs to spot-check whether or not the on-line certifications that continuing education has been completed have been truthful.

local governments:

The rules for continuing education and license renewal for real estate agents and brokers do not involve local government, and therefore no cost or savings is anticipated.

other persons:

Any cost or savings to other persons because of the changes in continuing education requirements made by S.B. 198 are attributable to S.B. 198 itself and not to the provisions in these rules implementing the changes made by S.B. 198. As to on-line renewals, they will of necessity involve payment of renewal fees by credit card, which will result in credit card costs to the Division that will be passed on to licensees in the form of slightly higher renewal fees.

Compliance costs for affected persons:

As explained in "Other persons" above, on-line renewal will result in slightly higher renewal fees charged to licensees.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule filing contains a provision regarding on-line license renewals. Although on-line renewals may result in some convenience fees or slightly increased licensing fees, the convenience associated with this method will likely outweigh the increased fees. Therefore, the fiscal impact to businesses is anticipated to be a positive one. As to the continuing education provisions in this rule filing, the fiscal impact to businesses with respect to continuing education for real estate agents and brokers has already been addressed in the passage of S.B. 198 during the 2003 Legislative Session.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Shelley Wismer at the above address, by phone at 801-530-6761, by FAX at 801-530-6749, or by Internet E-mail at swismer@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/02/2004

This rule may become effective on:

02/03/2004

Authorized by:

Dexter Bell, Director

RULE TEXT

R162. Commerce, Real Estate.

R162-3. License Status Change.

R162-3-1. Status Changes.

3.1. A licensee must notify the Division within ten working days of any status change. Status changes are effective on the date the properly executed forms and appropriate non-refundable fees are received by the Division. Notice must be on the forms required by the Division.

3.1.1. Change of name requires submission of official documentation such as a marriage or divorce certificate, or driver's license.

3.1.2. Change of business, home address or mailing address requires written notification. A post office box without a street address is unacceptable as a business or home address. The licensee may designate any address to be used as a mailing address.

3.1.3. Change of name of a brokerage must be accompanied by evidence that the new name has been approved by the Division of Corporations, Department of Commerce.

3.1.4. Change of Principal Broker of a real estate brokerage which is a sole proprietorship, requires closure of the registered entity. The new principal broker will activate the Registered Company and provide proof from the Division of Corporations of the authorization to use the DBA. Change cards will be required for the terminating Principal Broker, new Principal Broker and all licensees affiliated with the brokerage.

3.1.5. Change of a Principal Broker within an entity which is not a sole proprietorship requires written notice from the entity signed by both the terminating Principal Broker and the new Principal Broker.

R162-3-2. Unavailability of Licensee.

3.2. If a licensee is not available to properly execute the form required for a status change, the status change may still be made provided a letter advising of the change is mailed by certified mail to the last known address of the unavailable licensee. A verified copy of the letter and proof of mailing by certified mail must be attached to the form when it is submitted to the Division.

R162-3-3. Transfers.

3.3. Prior to transferring from one principal broker to another principal broker, the licensee must mail or deliver to the Division written notice of the change on the form required by the Division.

R162-3-4. Inactivation.

3.4. To voluntarily inactivate a license, the licensee must deliver or mail to the Division a written request for the change signed by both the licensee and principal broker.

3.4.1. Prior to placing his license on an inactive status, a principal broker must provide written notice to each licensee affiliated with him of that licensing status change. Evidence of that written notice must be provided to the Division in order to process the status change. The inactivation of the license of a principal broker will also cause the licenses of all affiliated licensees to be immediately inactivated if they do not transfer their licenses in accordance with R162-3.3 prior to the effective date of the principal broker's status change.

3.4.2. The non-renewal, suspension, or revocation of the license of a principal broker will cause the licenses of all affiliated licensees to be immediately inactivated if they do not transfer their licenses in accordance with R162-3.3 prior to the effective date of the principal broker's status change.

3.4.2.1. When a principal broker is notified that his license will be suspended or revoked, he must, prior to the effective date of the suspension or revocation, provide written notice to each licensee affiliated with him of that status change. In addition, the Division shall send written notice to each sales agent, associate broker, or branch broker of the effective date of inactivation and the process for transfer.

3.4.3. The principal broker may involuntarily inactivate the license of the sales agent or associate broker by complying with R162-3.2.

R162-3-5. Activation.

3.5. All licensees changing to active status must submit to the Division the applicable non-refundable activation fee, [and ]a [written ]request for activation [on]in the form required by the Division, and, if the license has been on inactive status for more than 12 consecutive months, proof of completion of the examination or the 12-hour continuing education requirement set forth in Section 61-2-9(3).[ If the license has been on an "inactive" status in excess of one year, the licensee must provide to the Division a certificate evidencing completion of the education or examination requirements set forth in Section 61-2-9. At the time of the licensee's next renewal, education which was used to activate the license may not be used again for continuing education purposes.]

3.5.1 Continuing Education for Activation. Courses that have been approved by the Division for continuing education purposes in the following topics will be acceptable toward the continuing education required for activation: agency, contract law, the Real Estate Purchase Contract and other state-approved forms, ethics, Utah law, and closing/settlement.

3.5.1.1 To qualify as continuing education for activation, all courses submitted must have been completed within one year before activation.

3.5.1.2 Continuing education that was submitted to activate a license may not be used again toward the continuing education required on the licensee's next renewal.

R162-3-6. Renewal and Reistatement.

3.6.1 A license renewal notice shall be sent by the Division to the licensee at the mailing address shown on the division records. The renewal notice shall specify the requirements for renewal and shall require that the licensee document or certify that the requirements have been met. The licensee must apply to renew and pay all applicable fees[return the completed renewal notice, proof of completion of 12 hours of continuing education and the applicable non-refundable renewal fee to the Division] on or before the expiration shown on the notice. Renewal of an active Principal Broker license requires certification in the form required by the division that the business name under which the licensee is operating is still current and in good standing with the Division of Corporations and that all real estate trust accounts are current.

3.6.1.1 Continuing education requirement. All licenses who are applying to renew their licenses in an active status are required to have completed 12 hours of approved continuing education prior to applying to renew.

3.6.1.2 Applications filed by mail. The division will consider a properly completed application that has been postmarked on or before the expiration date shown on the renewal notice to have been timely filed.

3.6.1.3 Documentation of continuing education. Any licensee who renews on-line on the division's web site and certifies that the required continuing education has been completed shall maintain the original course completion certificates supporting that certification for three years following renewal. The licensee shall produce those certificates for audit upon request by the division.

3.6.1.4 Misrepresentation on application. Any misrepresentation in an application for renewal will be considered a separate violation of these rules and separate grounds for disciplinary action against the licensee, regardless of whether the application is filed with the division by mail or in person, or made on-line.[3.6.1. If the renewal fee and documentation are not received within the prescribed time period, the license shall expire.]

3.6.2. A license expires if it is not renewed on or before its expiration date. When an active license expires, the licensee's affiliation with a principal brokerage automatically terminates.

3.6.3 The license may be renewed for a period of thirty days after the expiration date by meeting all of the conditions for renewal and, in addition, paying a non-refundable late fee, and, if the licensee will be actively licensed, submitting the forms required by the Division to activate a license[upon payment of a non-refundable late fee in addition to the requirements of R162-3.5 and R162-3.6].

3.6.[3]4. After this 30-day period and until six months after the expiration date the license may be reinstated by meeting all of the conditions for renewal and, in addition, paying a non-refundable late fee and a non-refundable reinstatement fee, submitting proof of the 12 hours of continuing education required by Section 61-2-9(2)(a) and the 12 additional hours of continuing education required by Section 61-2-9(2)(c)(iii), and, if the licensee will be actively licensed, submitting the forms required by the Division to activate a license.[paying a non-refundable reinstatement fee, and providing proof of satisfactory completion of the Utah portion of the prelicensing education required under Section 61-2-6 or passing the Utah portion of the real estate examination, in addition to the requirements of R162-3.5 and R162-3.6.]

3.6.4.1 Additional Continuing Education Hours for Reinstatement. Courses that have been approved by the Division for continuing education purposes in the following topics will be acceptable toward the additional 12 hours of continuing education required for reinstatement by Section 61-2-9(2)(c)(iii): agency, contract law, the Real Estate Purchase Contract and other state-approved forms, ethics, Utah law, and closing/settlement.

3.6.4.1.1 To qualify as continuing education for reinstatement, all courses submitted must have been completed within one year before activation.

3.6.4.1.2 Continuing education that was submitted to reinstate a license may not be used again toward the continuing education required on the licensee's next renewal.

3.6.[4]5. If the licenses of licensees affiliated with a principal broker are inactivated because of the[A] principal broker's failure to renew his license when due, [which causes the licenses of those affiliated with him to be placed on an inactive status,]the failure to renew the license in a timely manner shall be separate grounds for disciplinary action against the principal broker.

3.6.[5]6. If the Division has received a licensee's application for renewal [documents ]in a timely manner but the information is incomplete, the division may grant the licensee [shall be extended ]a 15-day grace period to complete the application, during which time the division shall extend the license.

3.6.[6]7. Education credit will be given for a course taken in another state provided the course has been certified for continuing education purposes in another state. These courses shall meet the Utah requirement of protection of the public, except that credit will not be given for education where the subject matter pertains to another state's license laws.

3.6.[6]7.1. Prior approval must be obtained from the division before credit will be granted. Evidence must be provided to the Division that the course was certified by another licensing jurisdiction at the time the course was taken.

KEY: real estate business

[April 23, 1998]2004

Notice of Continuation June 3, 2002

61-2-5.5

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Shelley Wismer at the above address, by phone at 801-530-6761, by FAX at 801-530-6749, or by Internet E-mail at swismer@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.