Utah! NEWS DIVISION A Publication For Utah’s Real Estate .

4My License Expired?continued from page 3These delays and expenses couldeasily be avoided if licensees wouldtake upon themselves the responsibility to keep track of the expirationdate of their license. After initial orlicense renewal processing, eachindividual licensee is printed alicense (including a smaller versionof their license to be kept in yourbillfold or purse). This licenseclearly states your name, licensenumber, and license expirationdate. It is your responsibility tokeep track of when your licenseexpires and perform the necessarysteps to renew your license.Remember, if you have misplacedyour license you can verify yourlicense expiration by looking on theDivision’s website at http://realestate.utah.gov/database.html.Please know your license expirationdate because the licensee bears thesole responsibility to renew theirlicense in a timely manner.The Division currently mails out asingle postcard renewal reminder(appraisers continue to receivepaper renewal instructions andforms until they can renew onlinewithin the next few months), yet thiscourtesy is merelyan aid to help youto remember torenew yourlicense. Ultimately licenseesare responsible torenew theirlicenses “ontime.”Utah Division of Real Estate News“Which Comes First Education Or Education Waiver?”Why don’t Principal Lending Manager candidates take the required educationbefore they apply for approval from the Division? The answer to that question isrelatively simple. The Division (and the candidate) does not know the amount ofeducation (if any) that a candidate needs to become a PLM, until after they submittheir PLM Experience Documentation Form for review. Only then will the Divisionbe able to determine whether an applicant qualifies under the five or three yearexperience qualification criteria.If candidates proceed to take education before they receive an education waiver,they may be taking too much education, or they may ultimately not qualify at all tobecome a PLM. In this case they would have taken education unnecessarilybecause they do not qualify to advance to a PLM.In order to avoid candidate frustrations and confusion, Mortgage Pre-licensingschools have been cautioned not to allow students to take the PLM education untilafter the Division has issued them an education waiver. Logic dictates that it makesno sense to “get the cart before the horse” when it comes to receiving PLMeducation before the amount of education, if any has been determined.Some frustrations have been expressed by candidates when the Division notifiesthem that they only qualify to become a PLM under the three year qualificationoption (which requires 40 hours of pre-license education, passing both the nationaland state portions of the exam), when they believed that they qualified under thefive year option (where passing the state portion of the exam, is the onlyrequirement).From the PLM Experience Documentation Form alone, the Division will determinethe applicant’s qualifications to become a PLM. The application will either bedenied or approved based on the information provided by the applicant. Anapplicant would be well advised to list all qualified work experience on their PLMapplication form in order to assure the most probable likelihood of ultimateapproval. The Division discourages applicants from applying, being denied orapproved under a “reduced” experience level qualification, and then seeking to reapply with additional experience documentation. One’s initial application should beinclusive of all qualified work experience. Multiple applications with incrementallyincreasing experience documentation will only delay the applicant and result inanxiety and frustration by the licensee.Over 1,200 individuals have received a written notification from the Divisionregarding their application to become a PLM or ALM. These notifications indicatecontinued on page 8

5April 2006Advertising Requirements WhenSelling Real Estate LicenseeOwned PropertiesProperty Listed by Real Estate Licensee (Property Owner) or, PropertyOwned by Real Estate Licensee but Listed by Another LicenseeIf selling a listed property that is personally owned by a licensee, any advertisingmust include the name of the brokerage (of the listing agent), as shown on Divisionrecords.R162-6.1.5.1 – “Any advertising by active licensees that does not includethe name of the real estate brokerage as shown on Division records isprohibited ”A sign “rider” declaring “owner/agent” is not required. However, the licensee’sownership interest in the transaction must be disclosed in the real estate purchasecontract.R162-6.1.3 – Licensee’s Interest in a Transaction. “Alicensee shall not either directly or indirectly buy, sell, leaseor rent any real property as a principal, without firstdisclosing in writing on the purchase agreement or thelease or rental agreement his true position as principal inthe transaction. For the purposes of this rule, a licensee will be consideredto be a “principal in the transaction” if he: a) is himself the buyer or thelessee 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 orlessee; or d) is an officer, director, partner, member, or employee of theentity that is the buyer, seller, lessor or lessee.”Property For Sale By Owner Agent (Unlisted)If selling a personally owned property that is not listed, any advertising must includethe phrase “owner-agent” or the phrase “owner-broker”.R162-6.1.5.2 – “If the licensee advertises property in which he has anownership interest and the property is not listed, the ad need not appearover the name of the real estate brokerage if the ad includes the phrase“owner-agent” or the phrase “owner-broker”.An important reminder: The purchase contract must include the licensee’s trueposition as principal in the transaction regardless of whether the property is listedwith a real estate brokerage or sold “for sale by owner” (R162-6.1.3).Did you know?The Division often receivescontinuing education certificates and other documentation for licensees that do notreflect the person's legal name.While you might go by Jack ifyour name is John, it helpsour staff avoid confusion ifyou use your legal name onall of your correspondencewith the Division. We appreciate your efforts to help us doour jobs better!DIVISION of REAL ESTATEUtah! NEWSDivision Director .Derek B. MillerEditor/Contributor . Mark FagergrenLayout . Jennifer Eatchel 2006 Published byUtah Division of Real EstateDepartment of Commerce160 East 300 South (84111)PO Box 146711Salt Lake City, UT 84114-6711(801) 530-6747 main line(801) 530-6749 main fax line(801) 530-6279 forms fax linewww.realestate.utah.govReal Estate CommissionersDorothy M. Burnham (Bountiful), ChairMaralee Jensen (Spanish Fork), Vice ChairBonnie Peretti (Park City)H. Blaine Walker (Salt Lake City)Doyle C. "Sam" Sampson, Jr. (St. George)Residential Mortgage RegulatoryCommissionersA. Thompson Calder (Park City), ChairPierre Alley (Salt Lake City), Vice ChairJulie McCan (Salt Lake City)Alan Bowyer (Salt Lake City)Heather MacKenzie (Orem)Appraiser Licensing and Certification Board MembersJ. Philip Cook (Salt Lake City), ChairHolly J. Christensen (Provo), Vice ChairJennifer Szczypkowski (West Jordan)Craig Morley (St. George)Lynn N. Christensen (Layton)

6Utah Division of Real Estate NewsAppraiser TraineeSupervisionThe Division occasionally learns of situations where registeredtrainees are performing appraisal duties that exceed their experience and licensed authority. Please refer to Administrative RuleR162-105-3.2 for specific duties that may be performed byregistered trainees.“Only those persons who have properly qualified astrainees may perform the following appraisalrelated duties: participating in property inspections,measuring or assisting in the measurement ofproperties, performing appraisal-relatedcalculations, participating in the selection ofcomparables for an appraisal assignment,making adjustments to comparables, and drafting orassisting in the drafting of an appraisal report. Thesupervising appraiser shall be responsible to determine the point at which a trainee is competent toparticipate in each of these activities”.Trainees are not able to solicit appraisal business in their ownname, but only in the name of the firm or in the name of theappraiser that is directly supervising them. All engagement lettersshall be addressed to the supervisor or the supervisor’s appraisalfirm, not to the trainee.Administrative Rule R162-105-3.2.1 further indicates, “inall appraisal assignments, the supervisor shall delegateonly such duties as are appropriate to the trainee andshall directly supervise the trainee in the performance ofthose duties”.Although currently there are no restrictions on the number oftrainees that an appraiser may supervise, soon the number oftrainees will be restricted.In compliance with national standards determined by the Appraisal Qualifications Board effective January 1, 2008, a supervising appraiser may supervise a maximum of three trainees at atime (R162-105.3.4). Until then, supervisors continue to havedirect responsibility for the trainees affiliated with them, regardlessof the number.PLM LicensingWhere Are We?(The Numbers Don’t Lie)Despite legislation that passed over two yearsago, and repeated communication, only 168Principal Lending Managers (PLM’s), havebecome licensed as of the end of March 2006.With only one month remaining before the legislatively imposed deadline, the Division is concernedwith the low response to this legal requirement, asthere are 1,766 actively licensed mortgage entitiesthat require a PLM.Utah Code 61-2c-201 (5), (8) and (11) statethat:“On or after May 1, 2006, a mortgageofficer shall conduct all business ofresidential mortgage loans:(a) through the principal lendingmanager with which the individualis licensed; and(b) in the business name under whichthe principal lending manager isauthorized by the division to dobusiness.”“On or after May 1, 2006, a mortgageofficer whose license has been placed ininactive status may not transact thebusiness of residential mortgage loans untilthe mortgage officer has licensed with aprincipal lending manager ”Over l,300 education waivers have been grantedto PLM candidates. However, to date, only 330PLM individuals are scheduled to take the examover the next 30 days. As the May 1st deadlineapproaches, the Division strongly encourages alllicensed mortgage entities to quickly complete therequirements to have a legally licensed PrincipalLending Manager.

7April 2006Caravan 2006continued from page 1This session was also a success and thankfully all who reserved a seat were admitted.(Phase II – Northern Utah)The second phase of the Division’s 2006 Caravan will begin with a meeting in Logan on Tuesday, May 2nd. This will befollowed by a meeting in Tooele on Thursday, May 4th. On Tuesday, May 16th the Division will be in Utah County, andon Thursday, May 18th the Caravan will travel to Vernal. Watch your mail for further details if you live in or adjacent toa county where the Caravan will be visiting.Appraiser Issuesby Jon Brown, Enforcement DirectorIssue #1Real estate licensees are calling the Division of Real Estatecomplaining about appraisers who are pulling threecomparables and telling lenders they cannot reach a valueneeded to complete a transaction. You may think this is agood service to your client, but you cannot do a letter reportor a verbal conclusion as to what a value could be withoutfollowing Standard 1 and 2 of USPAP. If you are offeringthis type of service, STOP! USPAP requires you to gothrough the process and do the report. Common senseshould tell you that you cannot do an “eyeball” type of report.You have completed an appraisal if you say a propertycannot reach a certain value. If the Division of Real Estateuncovers that this has happened, there will be a completeinvestigation and if USPAP violations are found, there will beaction taken against the licensee.Issue #2Administrative Rule 107.1.5 says in part, that it is unprofessional conduct for a supervisor to allow a non-appraiser to(c) “accept an appraisal assignment.” Rule 107.6 says inpart, that trainees may not be paid by the client, but that thesupervisor or supervisor’s firm must collect the fee for anappraisal service and that the trainee must be paid by thesupervisor. The Division will take action against the supervisor, if an investigation finds the above rules have beenviolated.continued on page 9

8Utah Division of Real Estate NewsEducation Or Education Waiver?continued from page 4in some instances whether an individualis denied based on inadequate experience. In the vast majority of cases, theapplicants are approved to proceed inthe licensing process to become a PLM.Some are approved under the “threeyear” experience standard. Others areapproved under the “five year” experience requirement (for further information on these two approval options seethe January 2006 edition of the UtahDivision of Real Estate News at ed with the personal letter ofnotification, applicants are provided a“Mortgage Candidate Education Certifying Document.” This document isstamped and signed by the Division ofReal Estate (if the 40 hour education iswaived); or, by an approved mortgagepre-licensing school (once the 40 houreducation is completed).The bottom left portion of the “Mortgage Candidate Education CertifyingDocument” indicates the date in whichthis document “expires”. Since Associate Lending Managers are not required to be licensed by May 1, 2006,they can complete their licensing, upuntil the expiration of the certifyingdocument (one year from approval bythe Division orcompletionof mortgagepre-licenseeducation).The education “waiver expiration date”refers only to the date at which time the“Mortgage Candidate Education Certifying Document” expires. In no waydoes it waive the requirement forentities to have an actively licensedPLM by the 5/1/06 deadline. Individuals who are required to become aPLM to comply with the statutory requirement must complete the licensingprocess by the 5/1/06 deadline!Confirmation of Agency DisclosureParagraph five of the real estate purchase contract (REPC) is titled “CONFIRMATION OF AGENCY DISCLOSURE”.[5. CONFIRMATION OF AGENCY DISCLOSURE. At the signing of this Contract:] Seller’s Initials[ ] Buyer’s InitialsThe Listing Agent,The Listing Broker,The Selling Agent,The Selling Broker,, represents [ ] Seller [ ] Buyer [ ] both Buyer and Selleras a Limited Agent;, represents [ ] Seller [ ] Buyer [ ] both Buyer and Selleras a Limited Agent;, represents [ ] Seller [ ] Buyer [ ] both Buyer and Selleras a Limited Agent;, represents [ ] Seller [ ] Buyer [ ] both Buyer and Selleras a Limited Agent;This paragraph includes space to list the names of the listing and selling agents for a transaction. Space is also providedto include the listing and selling brokers names. The brokers’ space is to be completed with the name of the principalbroker of the real estate brokerage representing either or both the buyer or seller in the transaction. This space is NOTto be filled in with the name of the listing or selling brokerage. The agency relationship is established between theprincipal broker and his/her principal in the transaction (buyers and/or sellers). Therefore the name of a branch brokeror a company name should not be entered in the space provided for the “broker” in the confirmation of agency disclosure section of the REPC.

9April 2006When Can a New LicenseeBegin to Conduct Business?Each day the Division receives a number of inquiriesabout when an individual that has applied for a newlicense may begin conducting business. There are alarge number of misconceptions and confusion on thisissue. Which of the following is correct regardingwhen an individual may begin to use their license.When they:a) take and pass the examb) pass the exam and apply to the Divisionc) apply to the Division (the date stamp onthe receipt serves as their temporarylicense)d) call the Division and are issued a licensenumber before their printed licensearrives in the maile) receive their printed license in the mailAppraiser Issuescontinued from page 7Issue #3Appraisal reports that list trainees as participating in the report,must also state what services the trainee rendered. When atrainee submits an application to become a Licensed Appraiser,they are required to obtain certain experience levels. The reportshe submits must be USPAP compliant. If the level of hisparticipation is not in the report, the experience is disqualified andthe application is denied. Do it the right way!Licensing Actions andDisciplinary SanctionsThe answer to this quiz is answer “e”. Onlywhen an individual has received their original licensein the mail from the Division may they conductlicensed activities.When Can a RenewingLicensee Begin to ConductBusiness After Their Licensehas Expired?The answer to this question is the same answer to thequiz above, “when they receive their printed license inthe mail.” The exception to this answer is for thosewho renew their license on-line; they are able toimmediately print their “temporary” license, which isvalid until their Division printed license arrives.“Active” vs. “Inactive”Any individual is required to have an “active” validlicense to perform activities that require a mortgage,real estate, or appraisal license. Renewing an “inactive” license (real estate and mortgage) does notenable an individual to act in a licensed capacity. Aninactive licensee may not perform licensed activity.*Pursuant to Utah Code 63G-4-106 and 107, alladministrative disciplinary actions commenced over10 years ago and certain actions over 5 years are notaccessible online, but may be provided in response toa GRAMA request.continued on page 10

10Utah Division of Real Estate Newscontinued from page 9*Pursuant to Utah Code 63G-4-106 and 107, alladministrative disciplinary actions commenced over10 years ago and certain actions over 5 years are notaccessible online, but may be provided in response toa GRAMA request.

11April 2006*Pur

*NEW* Postcard License Renewal Notification February marked a change in the way real estate sales agents, associate brokers, and mortgage licensees receive notice of upcoming license renewals. Postcard notification provides detailed information about how licensees can r