File No. 34199
This rule was published in the November 15, 2010, issue (Vol. 2010, No. 22) of the Utah State Bulletin.
Commerce, Real Estate
Rule R162-6
Licensee Conduct
Notice of Proposed Rule
(Repeal)
DAR File No.: 34199
Filed: 11/01/2010 03:51:56 PM
RULE ANALYSIS
Purpose of the rule or reason for the change:
The substantive elements of this rule have been incorporated into the proposed new Rule R162-2f. Therefore, this rule is no longer needed. (DAR NOTE: The proposed new Rule R162-2f is under DAR No. 34191 in this issue, November 15, 2010, of the Bulletin.)
Summary of the rule or change:
The rule is repealed in its entirety.
State statutory or constitutional authorization for this rule:
- Subsection 61-2f-103(1)(a)
Anticipated cost or savings to:
the state budget:
Where the substantive provisions of this rule are incorporated into the proposed new Rule R162-2f, no fiscal impact to the state budget is anticipated from this filing.
local governments:
Where the substantive provisions of this rule are incorporated into the proposed new Rule R162-2f, no fiscal impact to local governments is anticipated from this filing.
small businesses:
Where the substantive provisions of this rule are incorporated into the proposed new Rule R162-2f, no fiscal impact to small businesses is anticipated from this filing.
persons other than small businesses, businesses, or local governmental entities:
Where the substantive provisions of this rule are incorporated into the proposed new Rule R162-2f, no fiscal impact to affected persons is anticipated from this filing.
Compliance costs for affected persons:
In repealing this rule, the division and commission relieve affected persons of any obligation to comply with it. There are no compliance costs.
Comments by the department head on the fiscal impact the rule may have on businesses:
No fiscal impact to businesses is anticipated from this rule repeal as the substance of these provisions is contained in the new Rule R162-2f proposed by the Division.
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:
CommerceReal 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 jjonsson@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:
12/15/2010
This rule may become effective on:
12/22/2010
Authorized by:
Deanna Sabey, Director
RULE TEXT
R162. Commerce, Real Estate.
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R162-6. Licensee Conduct.
R162-6-1. Improper Practices.
6.1.1. False Devices. A licensee shall not propose,
prepare, or cause to be prepared any document, agreement, closing
statement, or any other device or scheme, which does not reflect
the true terms of the transaction, nor shall a licensee knowingly
participate in any transaction in which a similar device is
used.
6.1.1.1. Loan Fraud. A licensee shall not participate in
a transaction in which a buyer enters into any agreement that is
not disclosed to the lender, which, if disclosed, may have a
material effect on the terms or the granting of the
loan.
6.1.1.2. Double Contracts. A licensee shall not use or
propose the use of two or more purchase agreements, one of which
is not made known to the prospective lender or loan
guarantor.
6.1.2. Signs. It is prohibited for any licensee to have a
sign on real property without the written consent of the property
owner.
6.1.3. Licensee's Interest in a Transaction. A
licensee shall not either directly or indirectly buy, sell, lease
or rent any real property as a principal, without first
disclosing in writing on the purchase agreement or the lease or
rental agreement the licensee's true position as principal in
the transaction. For the purposes of this rule, a licensee will
be considered to be a "principal in the transaction" if
the licensee: a) is the buyer or the lessee in the transaction;
b) has any ownership interest in the property; c) has any
ownership interest in the entity that is the buyer, seller,
lessor or lessee; or d) is an officer, director, partner, member,
or employee of the entity that is the buyer, seller, lessor or
lessee.
6.1.3.1. Disclosure of Licensed Status. Regardless of
whether a person's license is in active or inactive status, a
licensee shall not fail to disclose in writing on any agreement
to buy, sell, lease or rent any real property as a principal that
the licensee holds a Utah real estate license.
6.1.4. Listing Content. The real estate licensee
completing a listing agreement is responsible to make reasonable
efforts to verify the accuracy and content of the
listing.
6.1.4.1. Net listings are prohibited and shall not be
taken by a licensee.
6.1.5. Advertising. This rule applies to all advertising
materials, including newspaper, magazine, Internet, e-mail,
radio, and television advertising, direct mail promotions,
business cards, door hangers, and signs.
6.1.5.1. Any advertising by active licensees that does
not include the name of the real estate brokerage as shown on
Division records is prohibited except as otherwise stated
herein.
6.1.5.2. If the licensee advertises property in which he
has an ownership interest and the property is not listed, the ad
need not appear over the name of the real estate brokerage if the
ad includes the phrase "owner-agent" or the phrase
"owner-broker".
6.1.5.3. Names of individual licensees may be advertised
in addition to the brokerage name. If the names of individual
licensees are included in advertising, the brokerage must be
identified in a clear and conspicuous manner. This requirement
may be satisfied by identifying the brokerage in lettering which
is at least one-half the size of the lettering which identifies
the individual licensees.
6.1.5.4. Advertising teams, groups, or other marketing
entities which are not licensed as brokerages is prohibited if
the advertising states "owner-agent" or
"owner-broker" instead of the brokerage name.
6.1.5.5. Advertising teams, groups, or other marketing
entities which are not licensed as brokerages is permissible in
advertising which includes the brokerage name upon the following
conditions:
(a) The brokerage must be identified in a clear and
conspicuous manner. This requirement may be satisfied by
identifying the brokerage in lettering which is at least one-half
the size of the lettering which identifies the team, group, or
other marketing entity; and
(b) The advertising shall clearly indicate that the team,
group, or other marketing entity is not itself a brokerage and
that all licensees involved in the entity are affiliated with the
brokerage named in the advertising.
6.1.5.6. If any photographs of personnel are used, the
actual roles of any individuals who are not licensees must be
identified in terms which make it clear that they are not
licensees.
6.1.5.7. Any artwork or text which states or implies that
licensees have a position or status other than that of sales
agent or associate broker affiliated with a brokerage is
prohibited.
6.1.5.8. Under no circumstances may a licensee advertise
or offer to sell or lease property without the written consent of
the owner of the property or the listing broker. Under no
circumstances may a licensee advertise or offer to sell or lease
property at a lower price than that listed without the written
consent of the seller or lessor.
6.1.5.9. If an active licensee advertises to purchase or
rent property, all advertising must contain the name of the
licensee's real estate brokerage as shown on Division
records.
6.1.6. Double Commissions. In order to avoid subjecting
the seller to paying double commissions, licensees may not sell
listed properties other than through the listing broker. A
licensee shall not subject a principal to paying a double
commission without the principal's informed consent.
6.1.6.1. A licensee shall not enter or attempt to enter
into a concurrent agency representation agreement with a buyer or
a seller, a lessor or a lessee, when the licensee knows or should
know of an existing agency representation agreement with another
licensee.
6.1.7. Retention of Buyer's Deposit. A principal
broker holding an earnest money deposit shall not be entitled to
any of the deposit without the written consent of the buyer and
the seller.
6.1.8. Unprofessional Conduct. No licensee shall engage
in any of the practices described in Section 61-2-2, et seq.,
whether acting as agent or on the licensee's own account, in
a manner which fails to conform with accepted standards of the
real estate sales, leasing or management industries and which
could jeopardize the public health, safety, or welfare and
includes the violation of any provision of Section 61-2-2, et
seq. or the rules of this chapter.
6.1.9. Finder's Fees. A licensee may not pay a
finder's fee or give any valuable consideration to an
unlicensed person or entity for referring a prospect in a real
estate transaction, except as provided in this rule.
6.1.9.1. Token Gifts. A licensee may give a gift valued
at $150 or less to an individual in appreciation for an
unsolicited referral of a prospect which resulted in a real
estate transaction.
6.1.10. Referrals and Provision of Settlement
Services.
6.1.10.1. Referrals of Prospects to Lender or Mortgage
Broker. A licensee may not receive a referral fee from a lender
or a mortgage broker.
6.1.10.2. Providing Settlement Services. A licensee may
not act as a real estate agent or broker in the same transaction
in which the licensee also acts as a mortgage loan officer or
loan originator, appraiser, escrow agent, or provider of title
services.
6.1.11. Failure to Have Written Agency Agreement. A
principal broker and a licensee acting on the principal
broker's behalf shall have written agency agreements with
their principals.
6.1.11.1. A principal broker and a licensee acting on the
principal broker's behalf who represent a seller shall have a
written agency agreement with the seller defining the scope of
the agency.
6.1.11.2. A principal broker and a licensee acting on the
principal broker's behalf who represent a buyer shall have a
written agency agreement with the buyer defining the scope of the
agency.
6.1.11.3. A principal broker and a licensee acting on the
principal broker's behalf who represent both buyer and seller
shall have written agency agreements with both buyer and seller
which define the scope of the limited agency and which
demonstrate that the principal broker has obtained the informed
consent of both buyer and seller to the limited agency as set
forth in Section R162-6.2.15.3.1.
6.1.11.3.1. A licensee may not act or attempt to act as a
limited agent in any transaction in which: a) the licensee is a
principal in the transaction; or b) any entity in which the
licensee is an officer, director, partner, member, employee, or
stockholder is a principal in the transaction.
6.1.11.4. A licensee affiliated with a brokerage other
than the listing brokerage who wishes to act as a sub-agent for
the seller, shall, prior to showing the seller's
property:
(a) obtain permission from the principal broker with whom
he is affiliated to act as a sub-agent;
(b) notify the listing brokerage that sub-agency is
requested;
(c) enter into a written agreement with the listing
brokerage consenting to the sub-agency and defining the scope of
the agency; and
(d) obtain from the listing brokerage all information
about the property which the listing brokerage has
obtained.
6.1.11.5. A principal broker and a licensee acting on the
principal broker's behalf who act as a property manager shall
have a written property management agreement with the owner of
the property defining the scope of the agency.
6.1.11.6. A principal broker and a licensee acting on the
principal broker's behalf who represent a tenant shall have a
written agreement with the tenant defining the scope of the
agency.
6.1.12. Signing without legal authority. A licensee shall
not sign or initial any document for a principal unless the
licensee has prior written authorization in the form of a duly
executed power of attorney from the principal authorizing the
licensee to sign or initial documents for the principal. A copy
of the power of attorney shall be attached to all documents
signed or initialed for the principal by the licensee.
6.1.12.1. When signing a document for a principal, the
licensee shall sign as follows: "(Principal's Name) by
(Licensee's Name), Attorney-in-Fact."
6.1.12.2. When initialing a document for a principal, the
licensee shall initial as follows: "(Principal's
Initials) by (Licensee's Name), Attorney-in-Fact for
(Principal's Name)."
6.1.13. Counteroffers. A licensee shall not make a
counteroffer by making changes, whiting out, or otherwise
altering the provisions of the Real Estate Purchase Contract or
the language that has been filled in on the blanks of the Real
Estate Purchase Contract. All counteroffers to a Real Estate
Purchase Contract shall be made using the State-Approved Addendum
form.
R162-6-2. Standards of Practice.
6.2.1. Approved Forms. The following standard forms are
approved by the Utah Real Estate Commission and the Office of the
Attorney General for use by all licensees:
(a) August 27, 2008, Real Estate Purchase Contract (use
of this form shall be mandatory beginning January 1,
2009);
(b) January 1, 1999 Real Estate Purchase Contract for
Residential Construction;
(c) January 1, 1987, Uniform Real Estate
Contract;
(d) October 1, 1983, All Inclusive Trust Deed;
(e) October 1, 1983, All Inclusive Promissory Note
Secured by All Inclusive Trust Deed;
(f) August 5, 2003, Addendum to Real Estate Purchase
Contract;
(g) August 27, 2008, Seller Financing Addendum to Real
Estate Purchase Contract;
(h) January 1, 1999, Buyer Financial Information
Sheet;
(i) August 27, 2008, FHA/VA Loan Addendum to Real Estate
Purchase Contract;
(j) January 1, 1999, Assumption Addendum to Real Estate
Purchase Contract;
(k) January 1, 1999, Lead-based Paint Addendum to Real
Estate Purchase Contract;
(l) January 1, 1999, Disclosure and Acknowledgment
Regarding Lead-based Paint and/or Lead-based Paint
Hazards.
6.2.1.1. Forms Required for Closing. Principal brokers
and associate brokers may fill out forms in addition to the
standard state-approved forms if the additional forms are
necessary to close a transaction. Examples include closing
statements, and warranty or quit claim deeds.
6.2.1.2. Forms Prepared by an Attorney. Any licensee may
fill out forms prepared by the attorney for the buyer or lessee
or the attorney for the seller or lessor to be used in place of
any form listed in R162-6.2.1 (a) through (g) if the buyer or
lessee or the seller or lessor requests that other forms be used
and the licensee verifies that the forms have in fact been
drafted by the attorney for the buyer or lessee, or the attorney
for the seller or lessor.
6.2.1.3. Additional Forms. If it is necessary for a
licensee to use a form for which there is no state-approved form,
for example a lease, the licensee may fill in the blanks on any
form which has been prepared by an attorney, regardless of
whether the attorney was employed for the purpose by the buyer,
seller, lessor, lessee, brokerage, or an entity whose business
enterprise is selling blank legal forms.
6.2.1.4. Standard Supplementary Clauses. There are
Standard Supplementary Clauses approved by the Utah Real Estate
Commission which may be added to Real Estate Purchase Contracts
by all licensees. The use of the Standard Supplementary Clauses
will not be considered the unauthorized practice of law.
6.2.2. Copies of Agreement. After a purchase agreement is
properly signed by both the buyer and seller, it is the
responsibility of each participating licensee to cause copies
thereof, bearing all signatures, to be delivered or mailed to the
buyer and seller with whom the licensee is dealing. The licensee
preparing the document shall not have the parties sign for a
final copy of the document prior to all parties signing the
contract evidencing agreement to the terms thereof. After a lease
is properly signed by both landlord and tenant, it is the
responsibility of the principal broker to cause copies of the
lease to be delivered or mailed to the landlord or tenant with
whom the brokerage or property management company is
dealing.
6.2.3. Residential Construction Agreement. The Real
Estate Purchase Contract for Residential Construction must be
used for all transactions for the construction of dwellings to be
built or presently under construction for which a Certificate of
Occupancy has not been issued.
6.2.4. Real Estate Auctions. A principal broker who
contracts or in any manner affiliates with an auctioneer or
auction company which is not licensed under the provisions of
Section 61-2-1 et seq. for the purpose of enabling that
auctioneer or auction company to auction real property in this
state, shall be responsible to assure that all aspects of the
auction comply with the requirements of this section and all
other laws otherwise applicable to real estate licensees in real
estate transactions. Auctioneers and auction companies who are
not licensed under the provisions of Section 61-2-1 et seq. may
conduct auctions of real property located within this state upon
the following conditions:
6.2.4.1. Advertising. All advertising and promotional
materials associated with an auction must conspicuously disclose
that the auction is conducted under the supervision of a named
principal broker licensed in this state;
6.2.4.2. Supervision. The auction must be conducted under
the supervision of a principal broker licensed in this state who
must be present at the auction;
6.2.4.3. Use of Approved Forms. Any purchase agreements
used at the auction must meet the requirements of Section 61-2-20
and must be filled out by a Utah real estate licensee;
6.2.4.4. Placement of Deposits. All monies deposited at
the auction must be placed either in the real estate trust
account of the principal broker who is supervising the auction or
in an escrow depository agreed to in writing by the parties to
the transaction; and
6.2.4.5. Closing Arrangements. The principal broker
supervising the auction shall be responsible to assure that
adequate arrangements are made for the closing of each real
estate transaction arising out of the auction.
6.2.5. Guaranteed Sales. As used herein, the term
"guaranteed sales plan" includes: (a) any plan in which
a seller's real estate is guaranteed to be sold or; (b) any
plan whereby a licensee or anyone affiliated with a licensee will
purchase a seller's real estate if it is not purchased by a
third party in the specified period of a listing or within some
other specified period of time.
6.2.5.1. In any real estate transaction involving a
guaranteed sales plan, the licensee shall provide full disclosure
as provided herein regarding the guarantee:
(a) Written Advertising. Any written advertisement by a
licensee of a "guaranteed sales plan" shall include a
statement advising the seller that if the seller is eligible,
costs and conditions may apply and advising the seller to inquire
of the licensee as to the terms of the guaranteed sales
agreement. This information shall be set forth in print at least
one-fourth as large as the largest print in the
advertisement.
(b) Radio/Television Advertising. Any radio or television
advertisement by a licensee of a "guaranteed sales
plan" shall include a conspicuous statement advising if any
conditions and limitations apply.
(c) Guaranteed Sales Agreements. Every guaranteed sales
agreement must be in writing and contain all of the conditions
and other terms under which the property is guaranteed to be sold
or purchased, including the charges or other costs for the
service or plan, the price for which the property will be sold or
purchased and the approximate net proceeds the seller may
reasonably expect to receive.
6.2.6. Agency Disclosure. In every real estate
transaction involving a licensee, as agent or principal, the
licensee shall clearly disclose in writing to the licensee's
respective client(s) or any unrepresented parties, the
licensee's agency relationship(s). The disclosure shall be
made prior to the parties entering into a binding agreement with
each other. The disclosure shall become part of the permanent
file.
6.2.6.1. When a binding agreement is signed in a sales
transaction, the prior agency disclosure shall be confirmed in
the currently approved Real Estate Purchase Contract or, with
substantially similar language, in a separate provision
incorporated in or attached to that binding agreement.
6.2.6.1.1. The blank in paragraph 5 of the approved Real
Estate Purchase Contract for "Seller's Brokerage"
shall be filled in with either the principal broker's
individual name or the principal broker's brokerage name.
Notwithstanding the fact that either the principal broker's
name or the brokerage name may be shown in paragraph 5, filling
in the name of the brokerage does not change the agency
relationship with the seller.
6.2.6.2. When a lease or rental agreement is signed, a
separate provision shall be incorporated in or attached to it
confirming the prior agency disclosure. The agency disclosure
shall be in the form stated in R162-6.2.6.1, but shall substitute
terms applicable for a rental transaction for the terms
"buyer"and "seller".
6.2.6.3. Disclosure to other agents. An agent who has
established an agency relationship with a principal shall
disclose who the agent represents to another agent in a
transaction upon initial contact with the other agent.
6.2.7. Duty to Inform. Sales agents and associate brokers
must keep their principal broker or branch broker informed on a
timely basis of all real estate transactions in which the
licensee is involved, as agent or principal, in which the
licensee has received funds on behalf of the principal broker or
in which an offer has been written.
6.2.8. Broker Supervision. Principal brokers and
associate brokers who are branch brokers shall be responsible for
exercising active supervision over the conduct of all licensees
affiliated with them.
6.2.8.1. A broker will not be held responsible for
inadequate supervision if:
(a) An affiliated licensee violates a provision of
Section 61-2-1, et seq., or the rules promulgated thereunder, in
contravention of the supervising broker's specific written
policies or instructions;
(b) Reasonable procedures were established by the broker
to ensure that licensees receive adequate supervision and the
broker has followed those procedures;
(c) Upon learning of the violation, the broker attempted
to prevent or mitigate the damage;
(d) The broker did not participate in the
violation;
(e) The broker did not ratify the violation; and
(f) The broker did not attempt to avoid learning of the
violation.
6.2.8.2. The existence of an independent contractor
relationship or any other special compensation arrangement
between the broker and affiliated licensees shall not release the
broker and licensees of any duties, obligations, or
responsibilities.
6.2.9. Disclosure of Fees. If a real estate licensee who
is acting as an agent in a transaction will receive any type of
fee in connection with a real estate transaction in addition to a
real estate commission, that fee must be disclosed in writing to
all parties to the transaction.
6.2.10. Fees from Builders. All fees paid to a licensee
for referral of prospects to builders must be paid to the
licensee by the principal broker with whom the licensee is
licensed and affiliated. All fees must be disclosed as required
by R162-6.2.10.
6.2.11. Fees from Manufactured Housing Dealers. If a
licensee refers a prospect to a manufactured home dealer or a
mobile home dealer, under terms as defined in Section 58-56-1, et
seq., any fee paid for the referral of a prospect must be paid to
the licensee by the principal broker with whom the licensee is
licensed.
6.2.12. Gifts and Inducements. A gift given by a
principal broker to a buyer or seller, lessor or lessee, in a
real estate transaction as an inducement to use the services of a
real estate brokerage, or in appreciation for having used the
services of a brokerage, is permissible and is not an illegal
sharing of commission.
6.2.12.1. If an inducement is to be offered to a buyer or
seller, lessor or lessee, who will not be obligated to pay a real
estate commission in a transaction, the principal broker who is
offering the inducement must notify the principal broker of the
party who will pay the commission that the inducement will be
offered.
6.2.12.1.2. When the party who will pay the commission is
not represented by a principal broker, the principal broker who
is offering the inducement shall notify the party
directly.
6.2.12.2. This rule does not:
(a) require notice under R162-6.2.12.1 to be given by one
principal broker according to a specific method or form preferred
by another principal broker; or
(b) authorize a principal broker to give any type of
inducement that would violate the underwriting guidelines that
apply to the loan for which a borrower has applied.
6.2.13. "Due-On-Sale" Clauses. Real estate
licensees have an affirmative duty to disclose in writing to
buyers and sellers the existence or possible existence of a
"due-on-sale" clause in an underlying encumbrance on
real property, and the potential consequences of selling or
purchasing a property without obtaining the authorization of the
holder of the underlying encumbrance.
6.2.14. Personal Assistants. With the permission of the
principal broker with whom the licensee is affiliated, the
licensee may employ an unlicensed individual to provide services
in connection with real estate transactions which do not require
a real estate license, including the following examples:
(a) Clerical duties, including making appointments for
prospects to meet with real estate licensees, but only if the
contact has been initiated by the prospect and not by the
unlicensed person;
(b) At an open house, distributing preprinted literature
written by a licensee, so long as a licensee is present and the
unlicensed person furnishes no additional information concerning
the property or financing and does not become involved in
negotiating, offering, selling or filling in contracts;
(c) Acting only as a courier service in delivering
documents, picking up keys, or similar services, so long as the
courier does not engage in any discussion of, or filling in of,
the documents;
(d) Placing brokerage signs on listed
properties;
(e) Having keys made for listed properties; and
(f) Securing public records from the County
Recorders' Offices, zoning offices, sewer districts, water
districts, or similar entities.
6.2.14.1. If personal assistants are compensated for
their work, they shall be compensated at a predetermined rate
which is not contingent upon the occurrence of real estate
transactions. Licensees may not share commissions with unlicensed
persons who have assisted in transactions by performing the
services listed in this rule.
6.2.14.2. The licensee who hires the unlicensed person
will be responsible for supervising the unlicensed person's
activities, and shall ensure that the unlicensed person does not
perform activity which requires a real estate license.
6.2.14.3. Unlicensed individuals may not engage in
telephone solicitation or other activity calculated to result in
securing prospects for real estate transactions, except as
provided in R162-6.2.14.(a) above.
6.2.15. Fiduciary Duties. A principal broker and
licensees acting on his behalf owe the following fiduciary duties
to the principal:
6.2.15.1. Duties of a seller's or lessor's agent.
A principal broker and licensees acting on his behalf who act
solely on behalf of the seller or the lessor owe the seller or
the lessor the following fiduciary duties:
(a) Loyalty, which obligates the agent to act in the best
interest of the seller or the lessor instead of all other
interests, including the agent's own;
(b) Obedience, which obligates the agent to obey all
lawful instructions from the seller or lessor;
(c) Full disclosure, which obligates the agent to tell
the seller or lessor all material information which the agent
learns about the buyer or lessee or about the
transaction;
(d) Confidentiality, which prohibits the agent from
disclosing any information given to the agent by the seller or
lessor which would likely weaken the seller's or lessor's
bargaining position if it were known, unless the agent has
permission from the seller or lessor to disclose the information.
This duty does not require the agent to withhold any known
material fact concerning a defect in the property or the
seller's or lessor's ability to perform his
obligations;
(e) Reasonable care and diligence;
(f) Holding safe and accounting for all money or property
entrusted to the agent; and
(g) Any additional duties created by the agency
agreement.
6.2.15.2. Duties of a buyer's or lessee's agent.
A principal broker and licensees acting on his behalf who act
solely on behalf of the buyer or lessee owe the buyer or lessee
the following fiduciary duties:
(a) Loyalty, which obligates the agent to act in the best
interest of the buyer or lessee instead of all other interests,
including the agent's own;
(b) Obedience, which obligates the agent to obey all
lawful instructions from the buyer or lessee;
(c) Full Disclosure, which obligates the agent to tell
the buyer or lessee all material information which the agent
learns about the property or the seller's or lessor's
ability to perform his obligations;
(d) Confidentiality, which prohibits the agent from
disclosing any information given to the agent by the buyer or
lessee which would likely weaken the buyer's or lessee's
bargaining position if it were known, unless the agent has
permission from the buyer or lessee to disclose the information.
This duty does not permit the agent to misrepresent, either
affirmatively or by omission, the buyer's or lessee's
financial condition or ability to perform;
(e) Reasonable care and diligence;
(f) Holding safe and accounting for all money or property
entrusted to the agent; and
(g) Any additional duties created by the agency
agreement.
6.2.15.3. Duties of a limited agent. A principal broker
and a licensee acting on the principal broker's behalf who
act as agent for both seller and buyer, or lessor and lessee,
commonly referred to as "dual agents," are limited
agents since the fiduciary duties owed to seller and to buyer, or
to lessor and lessee, are inherently contradictory. A principal
broker and a licensee acting on the principal broker's behalf
may act in this limited agency capacity only if the informed
consent of both buyer and seller, or lessor and lessee, is
obtained.
6.2.15.3.1. In order to obtain informed consent, the
principal broker or a licensee acting on the principal
broker's behalf shall clearly explain to both buyer and
seller, or lessor and lessee, that they are each entitled to be
represented by their own agent if they so choose, and shall
obtain written agreement from both parties that they will each be
giving up performance by the agent of the following fiduciary
duties:
(a) The principal broker or a licensee acting on the
principal broker's behalf shall explain to buyer and seller,
or lessor and lessee, that they are giving up their right to
demand undivided loyalty from the agent, although the agent,
acting in this neutral capacity, shall advance the interest of
each party so long as it does not conflict with the interest of
the other party. In the event of conflicting interests, the agent
will be held to the standard of neutrality;
(b) The principal broker or a licensee acting on the
principal broker's behalf shall explain to buyer and seller,
or lessor and lessee, that there will be a conflict as to a
limited agent's duties of confidentiality and full
disclosure, and shall explain what kinds of information will be
held confidential if told to a limited agent by either buyer or
seller, or lessor and lessee, and what kinds of information will
be disclosed if told to the limited agent by either party. The
limited agent may not disclose any information given to the agent
by either principal which would likely weaken that party's
bargaining position if it were known, unless the agent has
permission from the principal to disclose the information;
and
(c) The principal broker or a licensee acting on the
principal broker's behalf shall explain to the buyer and
seller, or lessor and lessee, that the limited agent will be
required to disclose information given to the agent in confidence
by one of the parties if failure to disclose the information
would be a material misrepresentation regarding the property or
regarding the abilities of the parties to fulfill their
obligations.
(d) The Division and the Commission shall consider use of
consent language approved by the Division and the Commission to
be informed consent.
6.2.15.3.2. In addition, a limited agent owes the
following fiduciary duties to all parties:
(a) Obedience, which obligates the limited agent to obey
all lawful instructions from either the buyer or the seller,
lessor and lessee, consistent with the agent's duty of
neutrality;
(b) Reasonable care and diligence;
(c) Holding safe all money or property entrusted to the
limited agent; and
(d) Any additional duties created by the agency
agreement.
6.2.15.4. Duties of a sub-agent. A principal broker and a
licensee acting on the principal broker's behalf who act as
sub-agents owe the same fiduciary duty to a principal as the
brokerage retained by the principal.
KEY: real estate business
Date of Enactment or Last Substantive Amendment: November
23, 2009
Notice of Continuation: April 18, 2007
Authorizing, and Implemented or Interpreted Law:
61-2-5.5 ]
Additional Information
The Portable Document Format (PDF) version of the Bulletin is the official version. The PDF version of this issue is available at https://rules.utah.gov/publicat/bull-pdf/2010/b20101115.pdf. The HTML edition of the Bulletin is a convenience copy. Any discrepancy between the PDF version and HTML version is resolved in favor of the PDF version.
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For questions regarding the content or application of this rule, please contact Jennie Jonsson at the above address, by phone at 801-530-6706, by FAX at 801-526-4387, or by Internet E-mail at jjonsson@utah.gov.