Commerce, Real Estate

Section R162-2f-205

Registration of Entity

Notice of Proposed Rule

(Amendment)

DAR File No.: 34909
Filed: 06/08/2011 09:15:55 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to respond to industry concerns, as explained more fully in the summary.

Summary of the rule or change:

This amendment states that an entity may not register under a business name that closely resembles the name of another registered entity or that the division determines might otherwise prove confusing or misleading to the public.

State statutory or constitutional authorization for this rule:

• Subsection 61-2f-103(1)

Anticipated cost or savings to:

the state budget:

This amendment clarifies an existing rule, which states that the Division must approve an entity's name before a registration may be issued. It does not create a new requirement that the Division will be required to administer or enforce. Therefore, no impact to the state budget is anticipated.

local governments:

Local governments are not subject to the Real Estate rules. Therefore, no fiscal impact to local governments is anticipated.

small businesses:

No new fees are imposed on small businesses as a result of this rule amendment, nor is any incidental cost associated with a small business being required to choose a unique business name. Therefore, no fiscal impact to small businesses is anticipated.

persons other than small businesses, businesses, or local governmental entities:

No new fees are imposed on persons as a result of this rule amendment, nor is any incidental cost associated with a person being required to choose a unique business name. Therefore, no fiscal impact to persons is anticipated.

Compliance costs for affected persons:

To comply, an affected person must choose a unique business name. No costs are associated.

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

As indicated in the rule summary, this rule filing clarifies existing provisions and standards and is not expected to have any fiscal impact to businesses.

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:

Commerce
Real Estate
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Jennie Jonsson at the above address, by phone at 801-530-6706, by FAX at 801-526-4387, or by Internet E-mail at [email protected]

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:

08/01/2011

This rule may become effective on:

08/08/2011

Authorized by:

Deanna Sabey, Director

R162. Commerce, Real Estate.

R162-2f. Real Estate Licensing and Practices Rules.

R162-2f-205. Registration of Entity.

(1) A principal broker shall not conduct business through an entity, including a branch office, dba, or separate property management company, without first registering the entity with the division.

(2) Exemptions. The following locations may be used to conduct real estate business without being registered as branch offices:

(a) a model home;

(b) a project sales office; and

(c) a facility established for twelve months or less as a temporary site for marketing activity, such as an exhibit booth.

(3) To register an entity with the division, a principal broker shall:

(a) evidence that the name of the entity is registered with the Division of Corporations;

(b) certify that the entity is affiliated with a principal broker who:

(i) is authorized to use the entity name; and

(ii) will actively supervise the activities of all sales agents, associate brokers, branch brokers, and unlicensed staff;

(c) if registering a branch office, identify the branch broker who will actively supervise all licensees and unlicensed staff working from the branch office;

(d) submit an application that includes:

(i) the physical address of the entity;

(ii) if the entity is a branch office, the name and license number of the branch broker;

(iii) the names of associate brokers and sales agents assigned to the entity; and

(iv) the location and account number of any real estate trust account in which funds received at the registered location will be deposited; and

(e) pay a nonrefundable application fee.

(4) Restrictions.

(a)(i) The division shall not register an entity proposing to use a business name that :

(A) is likely to mislead the public into thinking that the entity is not a real estate brokerage or property management company[.];

(B) closely resembles the name of another registered entity; or

(C) the division determines might otherwise be confusing or misleading to the public.

(ii) Approval by the division of an entity's business name does not ensure or grant to the entity a legal right to use or operate under that name.

(b) A branch office shall operate under the same business name as the principal brokerage.

(c) An entity may not designate a post office box as its business address, but may designate a post office box as a mailing address.

(5) Registration not transferable.

(a) A registered entity shall not transfer the registration to any other person.

(b) A registered entity shall not allow an unlicensed person to use the entity's registration to perform work for which licensure is required.

(c) If a change in corporate structure of a registered entity creates a separate and unique legal entity, that entity shall obtain a unique registration, and shall not operate under an existing registration.

(d) The dissolution of a corporation, partnership, limited liability company, association, or other entity registered with the division terminates the registration.

 

KEY: real estate business, licensing, enforcement

Date of Enactment or Last Substantive Amendment: [December 22, 2010]2011

Authorizing, and Implemented or Interpreted Law: 61-2f-103(1)