DAR File No. 39305

Commerce, Real Estate

Section R162-2f-401j

Standards for Property Management

Notice of Proposed Rule

(Amendment)

DAR File No.: 39305
Filed: 04/27/2015 02:08:48 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to clarify that within 30 days of the termination of a contract for property management services, the principal broker must deliver all trust money to the property owner, the property owner's designated agent, or to another party as designated by contract between the principal broker and the property owner.

Summary of the rule or change:

This amendment clarifies that within 30 days of the termination of a contract for property management services, the principal broker must deliver all trust money to the property owner, the property owner's designated agent, or to another party as designated by contract between the principal broker and the property owner.

State statutory or constitutional authorization for this rule:

• Section 61-2f-103
• Section 61-2f-401

Anticipated cost or savings to:

the state budget:

The division has the staff and budget in place to administer this provision. It is not anticipated that the proposed amendment will affect those resources or result in any additional cost or savings to the state budget.

local governments:

Local governments are not required to comply with or enforce the real estate licensing and practices rules. No fiscal impact to local government is expected from the proposed amendment.

small businesses:

This amendment clarifies the process of when and to whom trust funds must be delivered following the termination of a contract for management services. The amendment does not create a new obligation nor does it increase the cost associated with any existing obligation arising from the contract. No fiscal impact to small business is expected from the proposed amendment.

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

This amendment clarifies the process of when and to whom trust funds must be delivered following the termination of a contract for management services. The amendment does not create a new obligation nor does it increase the cost associated with any existing obligation arising from the contract. No fiscal impact to other persons is expected from the proposed amendment.

Compliance costs for affected persons:

This amendment clarifies the process of when and to whom trust funds must be delivered following the termination of a contract for property management services. The amendment does not create a new obligation nor does it increase the cost associated with an existing obligation which mat arise from the contract. No fiscal impact to affected persons is expected from the proposed amendment.

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

As stated in the rule analysis, this filing is made to clarify existing language setting forth circumstances under which a property manager is required to return to a property owner funds held in a trust account. No fiscal impact to businesses is anticipated.

Francine A. Giani, Executive Director, Commerce

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

Commerce
Real Estate
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Justin Barney at the above address, by phone at 801-530-6603, by FAX at , or by Internet E-mail at justinbarney@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:

06/15/2015

This rule may become effective on:

06/22/2015

Authorized by:

Jonathan Stewart, Director

R162. Commerce, Real Estate.

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

R162-2f-401j. Standards for Property Management.

(1) Property management performed by a real estate brokerage, or by licensees or unlicensed assistants affiliated with the brokerage, shall be done under the name of the brokerage as registered with the division unless the principal broker holds a dual broker license and obtains a separate registration pursuant to Section R162-2f-205 for a separate business name.

(2) In addition to fulfilling all duties related to supervision per Section 61-2f-401(12), the principal broker of a registered entity, and the branch broker of a registered branch, shall implement training to ensure that each sales agent, associate broker, and unlicensed employee who is affiliated with the licensee has the knowledge and skills necessary to perform assigned property management tasks within the boundaries of these rules, including this Subsection R162-2f-401j(3).

(3) An unlicensed individual employed by a real estate or property management company may perform the following services under the supervision of the principal broker without holding an active real estate license:

(a) providing a prospective tenant with access to a rental unit;

(b) providing secretarial, bookkeeping, maintenance, or rent collection services;

(c) quoting rent and lease terms as established or approved by the principal broker;

(d) completing pre-printed lease or rental agreements, except as to terms that may be determined through negotiation of the principals;

(e) serving or receiving legal notices;

(f) addressing tenant or neighbor complaints; and

(g) inspecting units.

(4) Within 30 days of the termination of[terminating] a contract with a property owner for property management services, the principal broker shall deliver all trust money[return] to the property owner, [or ]the property owner's designated agent, or other party as designated under the contract with the property owner.[all trust money that:

(a) is due to the property owner; or

(b) is being held for the benefit of the property owner or the owner's property.

]

KEY: real estate business, operational requirements, trust account records, notification requirements

Date of Enactment or Last Substantive Amendment: [January 21, ]2015

Authorizing, and Implemented or Intepreted Law: 61-2f-103(1); 61-2f-105; 61-2f-203(1)(e); 61-2f-206(3); 61-2f-206(4)(a); 61-2f-306; 61-2f-307