DAR File No. 28520

Commerce, Real Estate

R162-2-2

Licensing Procedure

NOTICE OF PROPOSED RULE

DAR File No.: 28520
Filed: 02/15/2006, 01:27
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose for this rule change is to set forth the qualifications for real estate licensure related to past criminal conduct by applicants and to turn a policy of the Utah Real Estate Commission and the Utah Real Estate Division into rule. This will give notice to potential applicants of the types of recent criminal convictions that will prevent them from receiving approval from the Utah Real Estate Commission to license or to renew an existing license.

Summary of the rule or change:

The rule change provides that applicants for a new license may not have had a felony conviction or plea in the five years preceding application, and may not have had a misdemeanor conviction or plea in a case involving theft or dishonesty in the three years preceding application. Those same types of convictions will also disqualify an applicant for renewal if the offenses have occurred since the person's last license renewal. A past criminal conviction at any time in the person's history is added to the list of factors that the Commission and the Utah Real Estate Division will consider in determining fitness for licensure, although older criminal convictions will not necessarily preclude licensure if the applicant is able to demonstrate that he or she currently meets the standards of honesty, integrity, truthfulness, reputation, and competency.

State statutory or constitutional authorization for this rule:

Subsections 61-2-5.5(1)(a)(i) and 61-2-6(1)(a)

Anticipated cost or savings to:

the state budget:

This rule change will eliminate an unknown number of the license application hearings before the Utah Real Estate Commission since it will deter applications from applicants who will be only be turned down after a hearing because of the Commission's and the Division's policy concerning licensing applicants with recent criminal convictions. Fewer applications will result in fewer license application hearings before the Commission, and therefore, the Utah Real Estate Commission will not have to hold extra meetings in order to review applications that will only be turned down anyway. This will result in a savings to the State budget of the per diem payments for extra Commission meetings. It is difficult to calculate how many extra meetings will be avoided, and therefore, the anticipated cost savings cannot be calculated.

local governments:

None--Local governments do not act as licensed real estate agents nor do they license real estate agents. Therefore, local governments are not affected by the qualification requirements to obtain real estate licenses.

other persons:

The only persons who are affected by the qualification requirements for real estate licensure are the applicants for those licenses. By explicitly stating the types of crimes and the time periods that will disqualify an applicant from receiving a license, this rule will give notice to potential applicants if their criminal history will disqualify them and therefore will save them from spending money on prelicensing education and examinations for a license that they will not receive.

Compliance costs for affected persons:

None--The only persons affected by this rule are license applicants with recent criminal convictions that will disqualify them from licensure if they apply for a license. It will not cost these persons money to comply with this rule, and it will actually save them from spending money since the rule will give them clear notice that they will not receive a license if they apply for a license too soon after their convictions.

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

This rule filing codifies the Division's and the Commission's standards for determining the fitness of an applicant. Because it it a clarification of existing procedures, no fiscal impact to businesses is anticipated as a result of this filing. Francine A. Giani, Executive Director

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:

03/31/2006

Interested persons may attend a public hearing regarding this rule:

3/15/2006 at 9:30 AM, Heber Wells Bldg, 160 E 300 S, Room 210, Second Floor, Salt Lake City, UT

This rule may become effective on:

04/01/2006

Authorized by:

Derek Miller, Director

RULE TEXT

R162. Commerce, Real Estate.

R162-2. Exam and License Application Requirements.

R162-2-2. Licensing Procedure.

2.2. Within 90 days after successful completion of the exam, the applicant shall return to the Division each of the following:

2.2.1. A report of the examination indicating that both portions of the exam have been passed within a six-month period of time.

2.2.2. The license application form required by the Division. The application form shall include the licensee's business and home address. 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.

2.2.3. The non-refundable fees which will include the appropriate license fee as authorized by Section 61-2-9(5) and the Recovery Fund fee as authorized by Section 61-2a-4.

2.2.4. Documentation indicating successful completion of the required education taken within the year prior to licensing. If the applicant has been previously licensed in another state which has substantially equivalent licensing requirements, he may apply to the Division for a waiver of all or part of the educational requirement.

2.2.4.1. Candidates for the license of sales agent will successfully complete 90 classroom hours of approved study in principles and practices of real estate. Experience will not satisfy the education requirement. Membership in the Utah State Bar will waive this requirement. The Division may waive all or part of the educational requirement by virtue of equivalent education taken while completing a college undergraduate or postgraduate degree program, regardless of the date of the degree, or by virtue of other equivalent real estate education if the other real estate education was taken within 12 months prior to application.

2.2.4.2. Candidates for the license of associate broker or principal broker will successfully complete 120 classroom hours of approved study consisting of at least 24 classroom hours in brokerage management, 24 classroom hours in advanced appraisal, 24 classroom hours in advanced finance, 24 hours in advanced property management and 24 classroom hours in advanced real estate law. Experience will not satisfy the education requirement. The Division may waive all or part of the educational requirement by virtue of equivalent education taken while completing a college undergraduate or postgraduate degree program, regardless of the date of the degree, or by virtue of other equivalent real estate education if the other real estate education was taken within 12 months prior to application.

2.2.5. The principal broker and associate broker applicant will submit the forms required by the Division documenting a minimum of three years licensed real estate experience and a total of at least 60 points accumulated within the five years prior to licensing. A minimum of two years (24 months) and at least 45 points will be accumulated from Tables I and/or II. The remaining 15 points may be accumulated from Tables I, II or III.

TABLE I - REAL ESTATE TRANSACTIONS

RESIDENTIAL - points can be accumulated from either the 

selling or the listing side of a real estate closing:

(a) One unit dwelling                         2.5 points

(b) Two- to four-unit dwellings               5 points

(c) Apartments, 5 units or over              10 points

(d) Improved lot                              2 points

(e) Vacant land/subdivision                  10 points



COMMERCIAL

(f) Hotel or motel                           10 points

(g) Industrial or warehouse                  10 points

(h) Office building                          10 points

(i) Retail building                          10 points

(j) Leasing of commercial space               5 points

TABLE II - PROPERTY MANAGEMENT

RESIDENTIAL

(a) Each unit managed                         .25 pt/month



COMMERCIAL - hotel/motel,

industrial/warehouse, office, or

retail building

(b) Each contract OR each separate

property address or location for

which licensee has direct responsibility       1 pt/month

2.2.6. The Principal Broker may accumulate additional experience points by having participated in real estate related activities such as the following:

TABLE III - OPTIONAL

Real Estate Attorney                          1 pt/month

CPA-Certified Public Accountant               1 pt/month

Mortgage Loan Officer                         1 pt/month

Licensed Escrow Officer                       1 pt/month

Licensed Title Agent                          1 pt/month

Designated Appraiser                          1 pt/month

Licensed General Contractor                   1 pt/month

Bank Officer in Real Estate Loans             1 pt/month

Certified Real Estate Prelicensing Instructor  .5 pt/month

2.2.7. If the review of an application has been performed by the Division and the Division has denied the application based on insufficient experience, and if the applicant believes that the Experience Points Tables do not adequately reflect the amount of the applicant's experience, the applicant may petition the Real Estate Commission for reevaluation by making a written request within 30 days after the denial stating specific grounds upon which relief is requested. The Commission shall thereafter consider the request and issue a written decision.

2.2.8. An applicant previously licensed in another state will provide a written record of his license history from that state and documentation of disciplinary action, if any, against his license.

2.2.9. Qualifications of License Applicants. An applicant for a new license may not:

(a) have been convicted of, entered a plea in abeyance to, or completed any sentence of confinement on account of, any felony within five years preceding the application; or

(b) have been convicted of, entered a plea in abeyance to, or completed any sentence of confinement on account of, any misdemeanor involving fraud, misrepresentation, theft, or dishonesty within three years preceding the application.

2.2.10 Qualifications for Renewal. An applicant for license renewal, or for reinstatement of an expired license, may not have, during the term of the applicant's last license or during the period between license expiration and application to reinstate an expired license, been convicted of, or entered a plea in abeyance to, a felony, and may not have been convicted of, or entered a plea in abeyance to, a misdemeanor involving fraud, misrepresentation, theft, or dishonesty.

2.2.11 Determining fitness for licensure. In determining whether an applicant who has not been disqualified by Subsections 2.2.9 or 2.2.10 meet the requirements of honesty, integrity, truthfulness, reputation and competency required for a new or a renewed license, [ T]the Commission and the Division will consider information they consider necessary to make this determination,[determine whether an applicant meets the requirements of honesty, integrity, truthfulness, reputation and competency, which shall include] including the following:

2.2.[9]11.1. Whether an applicant has been denied a license to practice real estate, property management, or any regulated profession, business, or vocation, or whether any license has been suspended or revoked or subjected to any other disciplinary sanction by this or another jurisdiction;

2.2.[9]11.2. Whether an applicant has been guilty of conduct or practices which would have been grounds for revocation or suspension of license under Utah law had the applicant then been licensed;

2.2.[9]11.3. Whether a civil judgment has been entered against the applicant based on a real estate transaction, and whether the judgment has been fully satisfied;

2.2.[9]11.4. Whether a civil judgment has been entered against the applicant based on fraud, misrepresentation or deceit, and whether the judgment has been fully satisfied.

2.2.11.5 Whether an applicant has ever been convicted of, or entered a plea in abeyance to, any criminal offense, or whether any criminal charges against the applicant have ever been resolved by a diversion agreement or similar disposition;

2.2.[9.5]11.6. Whether restitution ordered by a court in a criminal [conviction]case has been fully satisfied;

2.2.[9.6]11.7. Whether the parole or probation in a criminal [conviction]case or the probation in a licensing action has been completed and fully served; and

2.2.[9.7]11.8. Whether there has been subsequent good conduct on the part of the applicant. If, because of lapse of time and subsequent good conduct and reputation or other reason deemed sufficient, it shall appear to the Commission and the Division that the interest of the public will not likely be in danger by the granting of a license, the Commission and the Division may approve the applicant relating to honesty, integrity, truthfulness, reputation and competency.

KEY: real estate business

Date of Enactment or Last Substantive Amendment: [October 24, 2005]2006

Notice of Continuation: June 12, 2002

Authorizing, and Implemented or Interpreted Law: 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.