Newsletters

• Director's Message – Market Research
• Rule Developments Since March 1, 2022
• 2022 Caravan Recap
• Mortgage 5-hour Post Licensing Reminder
• Division Staff Spotlight
• Cooperative Brokerage Agreements
• 2nd Quarter Licensing & Disciplinary Actions
• Kagie's Korner — Release of and Non-Refundable Earnest Money Issues
• Buying and Selling Properties as Principle and a Licensee
• Instructor Development Workshop 2022 Announcement
• Credits

Last 3 Year Complaint Loss Comparison

The FBI report also listed the number of internet crime victims and total dollar loss for each state in 2021.

Utah ranked 31st for total victims per state with 4,242 and 23rd for total victim losses with $65,131,003 lost.

Even though the number of complaints received by the FBI went down from 2020 to 2021, the total loss increased by more than 64%. If none of your clients have lost money in this type of scam, it is easy to feel like it will never happen. It only takes once for thousands of dollars to be lost.

A Money.com article last year shared the story of Carly Andreatos who was just days away from buying her first house when she received an email from her attorney's paralegal. The email instructed her to wire her down payment and closing costs – a total of $22,890. Carly did not want to delay the closing of the transaction, so she quickly wired the money, which was all of her life savings. The next day she learned that her attorney never received the money.

The same article referenced a survey of title agents that found a third of all 2020 real estate transactions included some sort of wire fraud attempt and 76% of title agents said that fraud attempts either increased or held steady from the year prior. Real estate email scams are not going away and it is vital that licensees do all they can to protect their clients. In addition to my 2016 article, here are some additional tips and reminders.

Email Communication

In the last few years I have seen many more emails from real estate and title licensees that contain warnings about email scams. If you have not done so, please update your auto-generated email signature to warn your clients of potential scams and if they receive an email altering wiring instructions to contact you immediately at a known telephone number.

UAR Form

In October 2018 the Utah Association of Realtors® released a Wire Fraud Alert Disclosure. If you have not already done so, please make sure you are providing this disclosure to all your clients.

Data Protection

A common variable we see with victims of wire fraud in real estate transactions is the use of insufficient data security and the use of unsecure email accounts by real estate and title licensees. Using free, unencrypted email accounts to communicate with your clients can potentially put your clients' funds at risk. The following are recommendations from the National Association of Realtors® regarding email and password security:

• Never click on unknown attachments or links, doing so can download malware onto your device.
• Use encrypted email, a transaction management platform, or a document-sharing program to share sensitive information.
  Carefully guard login and access credentials to email and other services used in the transaction.
• Regularly purge your email account, and archive important emails in a secure location.
• Use long, complicated passwords such as phrases or a combination of letters, numbers, and symbols.
• Do not use the same password for multiple accounts.
• Consider using a password manager.
• Use two-factor authentication whenever possible if it is available.
• Avoid doing business over public, unsecured Wi-Fi.

There are a lot of great resources available to you as licensees on what risks are out there and how to best protect your clients. One of the best ways to protect your clients is to educate them about potential scams, the risks associated with those scams, and how they can communicate with you if they ever receive a suspicious email about their real estate transaction. Please take steps to help prevent these types of scams.

To view and comment on any proposed or amended rules during the public comment period, please visit the Utah State Bulletin at https://rules.utah.gov/publications/utah-state-bull/

There are currently no proposed rule amendments under consideration for the Appraisal Management Company rules.

The Appraiser Board approved the filing of a proposed rule amendment that primarily would: 1) provide an alternative means of obtaining appraisal experience through Practical Application of Real Estate Appraisal (PAREA), 2) make permanent the option of virtual-live education for pre-licensing and continuing education, and 3) provide additional experience possibilities for appraisers including those working in centrally assessed property appraising. The proposed rule amendment is moving through various governmental reviews after which it will be available for public comment.

There are currently no proposed rule amendments under consideration for the Utah Residential Mortgage Practices and Licensing rules.

On May 25, 2022, a rule amendment became effective which primarily: 1) streamlines the procedure for division approval of required prelicensing education for an applicant who has a current, active license in another state, 2) increases the lookback time from one year to two years for accumulation of required continuing education hours for activation of a license, and 3) makes other corrections consistent with current Rulewriting policy.

The Real Estate Commission has approved a draft proposed rule amendment that provides for the designation of an acting principal broker in the event of the death or incapacity of a principal broker. The proposed rule amendment is being prepared for review and filing.

The Division is considering proposing an amendment to the Affiliated Title Business rule that would require affiliated title entities to notify the division within 30 days of the date that they terminate their affiliation. This proposed rule would provide notice to the Division that no annual report is required from the entity that is no longer affiliated.

There are currently no proposed rule amendments under consideration for the Timeshare and Camp Resort Rules.

This year the Division made CARAVAN training stops in eight towns or cities located throughout the state.

Division Staff participants included: Division Director Jonathan Stewart, Licensing and Education Director Mark Fagergren, Chief Investigator Kadee Wright, Real Estate Education Coordinator Sandra Bargas, and Mortgage Education Coordinator Lark Martinez (for the Provo and Layton CARAVAN sessions).

We shared three hours of timely and interesting conversation and training pertaining to the real estate, mortgage, and appraisal professions. At no cost, licensees received three hours of informative traditional classroom continuing education.

We wish to thank this year's participants for their time and input and await our meeting once again next spring for the 2023 CARAVAN.

Mortgage loan originators who were or will be either initially licensed or relicensed in Utah between 11/01/2021 to 10/31/2022 are required to complete the 5-Hour Utah MLO course. Licensees should complete this course after their license has been approved and before their first renewal. This CE Course must be completed by October 21, 2022, for a timely renewal when the renewal period commences on November 1st. If an MLO has not completed the course by October 21, 2022, they will be prevented from renewing until the course is completed and the hours have been banked on the NMLS. If your Utah MLO license has been approved and the 5-Hour course license item remains on your license, please email a copy of the completion certificate to realestate@utah.gov.

MLOs who still need to complete the course can find providers for this course here or on the NMLS website . To verify course completion, please check your Course Completion and Compliance Record on the NMLS by logging in to the NMLS, then click on the Composite View tab, then click on View Individual on the top sub-menu, then click on View Education Record on the left navigation panel. Approved course providers have seven (7) calendar days to bank a student's course completion hours on the NMLS.

Thank you!

The term Cooperative Brokerage Agreement (CBA) is not clearly defined in either the Division Real Estate Statute or Administrative Rules. Having said that, CBAs have been appropriately used on a regular basis in situations involving referral fees and commission-sharing agreements between cooperating real estate brokerages.

There are instances when an in-state brokerage desires to enter into a CBA with another Utah licensed brokerage for a joint project where they wish to share agency responsibilities and duties including marketing, advertising, and commissions, etc. Be sure to verify that the brokerage is actively licensed in Utah before entering into such an agreement.

Client Referrals

Utah brokerages routinely have clients that are relocating out of state, or brokerages licensed outside of Utah may have clients desiring to move to Utah. CBAs referring and receiving client referrals between licensed real estate brokerages in other states is a common practice that allows Utah licensees to receive motivated clients moving to Utah, or receive referral fees when their former clients purchase properties outside of Utah. Be sure to verify that the out-of-state brokerage with which you establish a cooperating brokerage referral agreement is actively licensed in their state.

Out-of-state brokerages who have a client desiring to do business in Utah have two options:

• the out-of-state brokerage becomes licensed in Utah, or
• the out-of-state brokerage enters into a CBA where they refer business to an actively licensed Utah brokerage

PLEASE NOTE: A Cooperative Brokerage Agreement never allows or entitles an out-of-state brokerage to perform ANY TASK OR DUTY for which a Utah real estate license is required. Similarly, a CBA agreement does not entitle a Utah licensee to perform any task or duty that would require a license in a state outside of Utah. A partial list of tasks or duties includes, but is not limited to the following:

• advertise or otherwise offer to sell, lease, manage, or exchange real estate for another person
• show a property
• engage in the business of a real estate licensee
• draft or negotiate contract terms with buyers, sellers, lessors or lessees
• place monies in trust accounts, etc.

In no instances may a Utah brokerage enter into any CBA with an unlicensed individual or entity to share a real estate commission.

Please note that Utah law allows 30 days for appeal of an order. Some of the actions below might be subject to this appeal right or currently under appeal.

To view a copy of an order referenced in this article please visit the Utah Division of Real Estate Disciplinary Actions Search at: http://52.39.65.14/licensing-and-disciplinary-actions/

HENDERSON, D. RANDALL, certified general appraiser, American Fork, Utah. In an order dated April 29, 2022, Mr. Henderson’s license was renewed and placed on probation due to criminal conduct during the past licensing period. Case number AP-22-133734

JENKINS, KIM A., certified residential appraiser, Saratoga Springs, Utah. In a stipulated order dated March 23, 2022, Mr. Jenkins admits that due to his conviction in a criminal matter, he does not meet the qualifications of good moral character and general fitness to command the confidence of the community required for certification. Mr. Jenkins agreed to surrender his credential as a state-certified residential appraiser. Case number AP-22-132900

ARIAZAND, SHAHOB, mortgage loan originator, Irvine, California. In a settlement agreement and consent order between Mr. Ariazand and the state mortgage regulators of participating states, as amended on March 7, 2022, Mr. Ariazand admits to being a knowing and active participant in a mortgage education cheating scheme coordinated and implemented by Danny Yen, doing business as Real Estate Educational Services. Mr. Ariazand agreed to pay an administrative penalty of $3,000 and to surrender his mortgage license for a period of three months. After the three-month period, the settlement agreement provides that Mr. Ariazand may apply for a new mortgage license.

BALLON, RODRIGO, lending manager, Heber City, Utah. In a settlement agreement and consent order between Mr. Ballon and the state mortgage regulators of participating states, as amended on March 7, 2022, Mr. Ballon admits to being a knowing and active participant in a mortgage education cheating scheme coordinated and implemented by Danny Yen, doing business as Real Estate Educational Services. Mr. Ballon agreed to pay an administrative penalty of $8,000 and to surrender his mortgage license for a period of three months. After the three-month period, the settlement agreement provides that Mr. Ballon may apply for a new mortgage license.

HAYDEN, KIMBERLY, mortgage loan originator, Grove, Oklahoma. In a settlement agreement and consent order between Ms. Hayden and the state mortgage regulators of participating states, as amended on March 7, 2022, Ms. Hayden admits to being a knowing and active participant in a mortgage education cheating scheme coordinated and implemented by Danny Yen, doing business as Real Estate Educational Services. Ms. Hayden agreed to pay an administrative penalty of $6,000 and to surrender her mortgage license for a period of three months. After the three-month period, the settlement agreement provides that Ms. Hayden may apply for a new mortgage license.

KANDOLA, JITENDERA, lending manager, Temecula, California. In a settlement agreement and consent order between Mr. Kandola and the state mortgage regulators of participating states, as amended on March 7, 2022, Mr. Kandola admits to being a knowing and active participant in a mortgage education cheating scheme coordinated and implemented by Danny Yen, doing business as Real Estate Educational Services. Mr. Kandola agreed to pay an administrative penalty of $11,000 and to surrender his mortgage license for a period of three months. After the three-month period, the settlement agreement provides that Mr. Kandola may apply for a new mortgage license.

PACE, NICKI ANN PACE, also known as Nicki Jenkins, mortgage loan originator, Delta, Utah. In an order dated May 6, 2022, the Mortgage Commission found that Ms. Pace failed to disclose to the Division within ten days a criminal conviction involving a misdemeanor forgery charge. The charge related to a lien waiver in a loan from a relative of Ms. Pace to partially fund the building of her home. In addition, in her application to renew her mortgage loan originator license for calendar year 2021, Ms. Pace answered "No" to the application question related to whether she had been convicted of such a criminal charge. Conviction of a charge involving fraud or misrepresentation also constitutes a violation of the Utah Residential Mortgage Practices and Licensing Act, Utah Code Annotated, 61-2c. The Mortgage Commission found mitigating factors in this case in that the lender was Ms. Pace's uncle, the lender received payment in full of the loan, and the lender, her uncle, helped fund the cost of her criminal defense. The Commission ordered that Ms. Pace pay $500 for each of the disclosure violations and that she be restricted from applying for licensure as a mortgage loan originator for three years from the date of the entry of her plea in the criminal case, which date was December 9, 2020. Case number MG-20-123659 and Docket No. MG-2022-001

MORTGAGE EDUCATORS AND COMPLIANCE, mortgage pre-license school, American Fork, Utah. In a stipulated order dated March 10, 2022, Mortgage Educators and Compliance admits that the school and its only instructor unlawfully instructed courses for a significant number of students between December 31, 2020 and February 22, 2022 when either the school or its instructor did not hold a current license, in violation of Utah law and administrative rules. Mortgage Educators and Compliance agreed to pay a civil penalty of $42,300 and to make changes to its school course completion certificates. Case number MG-22-133376

STAMPER, SAMUEL, mortgage loan originator, Irvine, California. In a settlement agreement and consent order between Mr. Stamper and the state mortgage regulators of participating states, as amended on March 7, 2022, Mr. Stamper admits to being a knowing and active participant in a mortgage education cheating scheme coordinated and implemented by Danny Yen, doing business as Real Estate Educational Services. Mr. Stamper agreed to pay an administrative penalty of $6,000 and to surrender his mortgage license for a period of three months. After the three-month period, the settlement agreement provides that Mr. Stamper may apply for a new mortgage license.

TOUSOUNIS, EMANUEL, mortgage loan originator, Huntington Beach, California. In a settlement agreement and consent order between Mr. Tousounis and the state mortgage regulators of participating states, as amended on March 7, 2022, Mr. Tousounis admits to being a knowing and active participant in a mortgage education cheating scheme coordinated and implemented by Danny Yen, doing business as Real Estate Educational Services. Mr. Tousounis agreed to pay an administrative penalty of $3,000 and to surrender his mortgage license for a period of three months. After the three-month period, the settlement agreement provides that Mr. Tousounis may apply for a new mortgage license.

BAKER, TRU CHACE, sales agent, Salt Lake City, Utah. In an order dated April 28, 2022, Mr. Baker's license was granted and placed on probation for one year due to a plea in abeyance agreement in a criminal matter. Case number RE-22-134513

BOWEN, SKY REID, sales agent, Cedar City, Utah. In an order dated January 4, 2022, Mr. Bowen's license was reinstated and placed on probation for the renewal period due to a plea in abeyance agreement in a criminal matter. Case number RE-22-131969

BURBANK, ROBERT, sales agent, Salt Lake City, Utah. In an order dated March 7, 2022, Mr. Burbank's license was granted and placed on probation due to an unpaid civil judgment. Case number RE-22-133348

CAMPHOUSE, BRAKEN, sales agent, Hyde Park, Utah. In an order dated May 6, 2022, Mr. Camphouse's license was granted and placed on probation for the initial licensing period due to criminal history. Case number RE-22-134672

CECCARELLI, GREG WALLACE, sales agent, Park City, Utah. In an order dated January 25, 2022, Mr. Ceccarelli's license was reinstated and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-132289

ERCANBRACK, LYNDSEY J., sales agent, Orem, Utah. In a stipulated order dated March 16, 2022, Ms. Ercanbrack admits that she failed to enter into a written agency agreement with her clients and failed to obtain written informed consent when representing more than one party in a transaction. These actions are violations of Utah law and administrative rules. Ms. Ercanbrack agreed to pay a civil penalty of $3,000 and to complete three hours of continuing education in addition to the continuing education required for her next license renewal. Case number RE-18-98271 and Docket No. RE-2022-003

ERNEST, AARON CHRISTOPHER, sales agent, Cottonwood Heights, Utah. In an order dated April 27, 2022, Mr. Ernest's license was renewed and placed on probation due to a pending criminal matter. Case number RE-22-134485

FRKOVICH, JODI, sales agent, Sandy, Utah. In a stipulated order dated May 18, 2022, Ms. Frkovich admits that she entered into a concurrent agency representation when she knew or should have known that her principal had an existing agency representation agreement with another licensee, in violation of Utah law. Ms. Frkovich agreed to pay a civil penalty of $2,000 and to complete three hours of continuing education in addition to the continuing education required for her next license renewal. Case number RE-18-101921 and Docket No. RE-2022-009

GUNNELL, JENYA, sales agent, Heber City, Utah. In a stipulated order dated March 16, 2022, Ms. Gunnell admits that she allowed an advertisement for the sale of a property that had already closed and changed owners to remain posted for sale for several months without the consent of the new owner, in violation of Utah administrative rules. In addition, advertising the property for sale when it was not available for sale was false, misleading, or deceptive, in violation of Utah law. Ms. Gunnell agreed to pay a civil penalty of $3,000 and to complete six hours of continuing education in addition to the continuing education required for her next license renewal. Case number RE-20-120769 and Docket No. RE-2021-011

HARDIN, MICHAEL L., sales agent, Clinton, Utah. In an order dated March 11, 2022, Mr. Hardin's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-133475

HARMAN, JEFF, sales agent, Orem, Utah. In a stipulated order dated April 13, 2022, Mr. Harman admits that he signed lease agreements as landlord with regard to properties owned by his wife but failed to disclose his status as a real estate licensee. In addition, Mr. Harman failed to obtain a written agency agreement with his wife, the owner of the rental property. These actions are violations of Utah administrative rules. Mr. Harman agreed to pay a civil penalty of $1,500 and to complete three hours of continuing education in addition to the continuing education required for his next license renewal. Case numbers RE-19-114323 and RE-19-114948 and Docket No. RE-2022-005

HERBERT, JENNIFER CLAIR, sales agent, Lehi, Utah. In an order dated April 11, 2022, Ms. Herbert's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-134087

HUNTER, CHRISTOPHER, sales agent, Heber City, Utah. In an order dated January 25, 2022, Mr. Hunter's license was granted and placed on probation for the initial licensing period due to criminal history. Case number RE-22-132390

JENSEN, KARI, sales agent, Midvale, Utah. In an order dated January 5, 2022, Ms. Jensen's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-132029

LOVE, SARA, sales agent, Magna, Utah. In an order dated March 24, 2022, Ms. Love's license was granted and placed on probation for one year due to a plea in abeyance agreement in a criminal matter. Case number RE-22-133730

MILLER, BRANDON JERRY, sales agent, Millville, Utah. In an order dated January 26, 2022, Mr. Miller's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-132400

MISKO, NICOLAUS, sales agent, Midvale, Utah. In an order dated February 24, 2022, Mr. Misko's license was reinstated, immediately suspended for a short period of time, and then placed on probation for the remainder renewal period due to criminal conduct and failure to comply with a court order during the past licensing period. Case number RE-22-133065

OLSON, JEREMY L., sales agent, Ogden, Utah. In an order dated January 14, 2022, Mr. Olson's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-132217

OSTLER, STEPHEN H., sales agent, South Jordan, Utah. In a stipulated order dated April 13, 2022, Mr. Ostler admits that he contacted a seller through a group of text messages to solicit the seller as a client but failed to disclose his status as a real estate licensee in his initial contact with the seller. In addition, Mr. Ostler attempted to enter into a concurrent agency representation when he knew or should have known that the seller had an existing agency representation agreement with another licensee. These actions are violations of Utah administrative rules. Mr. Ostler agreed to pay a civil penalty of $1,500 and to complete three hours of continuing education in addition to the continuing education required for his next license renewal. Case number RE-18-103253

PARSLOW, ROBERT M., sales agent, West Jordan, Utah. In an order dated January 7, 2022, Mr. Parslow's license was renewed and placed on probation for the renewal period due to a plea in abeyance agreement in a criminal matter occurring during the past licensing period. Case number RE-22-132079

PLATT, ALEXANDRA NICOLE, sales agent, Salt Lake City, Utah. In an order dated April 18, 2022, Ms. Platt’s license was granted and placed on probation for the initial licensing period due to criminal history. Case number RE-22-134256

PRINCE, JOHN D., sales agent, Layton, Utah. In a stipulated order dated May 18, 2022, Mr. Prince admits that he engaged in a marketing campaign involving notes being posted on residential properties without disclosing the name of the brokerage with which he was affiliated. In addition, Mr. Prince maintained a website advertising his real estate services. The web advertisements also did not disclose the name of his brokerage. These actions are violations of Utah law administrative rules. Mr. Prince agreed to pay a civil penalty of $650 and to complete three hours of continuing education in addition to the continuing education required for his next license renewal. Case numbers RE-19-106710 and RE-19-106852, Docket No. RE-2021-007

ROBINSON, RUSSELL B., sales agent, South Weber, Utah. In an order dated April 27, 2022, Mr. Robinson's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-134484

RUSSELL, VICKY L., sales agent, St. George, Utah. In an order dated February 16, 2022, Ms. Russell's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-132875

SAMEK, CHRISTOPH, sales agent, Coalville, Utah. In an order dated March 17, 2022, Mr. Samek's license was renewed and placed on probation for the renewal period due to a plea in abeyance agreement in a criminal matter entered into during the past licensing period and while his license was on probation due to a previous matter. Case number RE-22-133581

SHARKEY RECORD, SAXONY E., sales agent, Draper, Utah. In a stipulated order dated April 13, 2022, Ms. Sharkey admits that she listed property in which she held a partial ownership interest without the knowledge or consent of the other owner. The listing was misleading in that it did not adequately describe the availability of the property. These actions are violations of Utah law and administrative rules. Ms. Sharkey agreed to pay a civil penalty of $2,000 and to complete three hours of continuing education in addition to the continuing education required for her next license renewal. Case number RE-18-102741 and docket No. RE-2022-004

SHAW, AMORI H., sales agent, St. George, Utah. In an order dated January 28, 2022, Ms. Shaw's license was reinstated and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-132463

SHEA, JAMES, sales agent, Park City, Utah. In an order dated March 18, 2022, the Real Estate Commission reinstated Mr. Shea's license and placed the license on probation due to criminal conduct during the past licensing period. Case number RE-21-130972 and Docket No. RE-2021-20

SIMMONS, WENDY LYNN, sales agent, St. George, Utah. In an order dated April 28, 2022, Ms. Simmons's license was granted and placed on probation for the initial licensing period due to criminal history. Case number RE-22-134511

STARLEY, TRICIA C., sales agent, In a stipulated order dated March 16, 2022, Ms. Starley admits that her conduct as a sales agent violated Utah law in that she represented or attempted to represent a principal broker other than the principal broker with whom she was affiliated; she was incompetent to act as a sales agent in a manner as to safeguard the interest of the public; and she failed to respond to a request by the Division in an investigation within 10 days after the request was made, including failing to produce documents or records. Ms. Starley agreed to pay a civil penalty of $5,000; complete 120 hours of approved pre-license education; that her license would be suspended until she completed the required education; and that her license would be placed on probation for one year following completion of the required education. Case number RE-19-107858 and Docket No. RE-2021-019

STOKES, CHAD W., principal broker, Farmington, Utah. In a stipulated order dated March 16, 2022, Mr. Stokes admits that he failed to disclose four matters of criminal history in applications to reinstate his license in 2020 and 2021 and that as a result of his failure to disclose these matters, his applications contained substantial misrepresentations, in violation of Utah law. Mr. Stokes agreed to pay a civil penalty of $2,000, including $500 for each of the four matters he failed to disclose, and that his license be placed on probation for the remainder of the renewal period. Case number RE-22-132186

STRANGE, LINDSAY ANN, sales agent, West Haven, Utah. In an order dated May 11, 2022, Ms. Strange's license was granted and placed on probation for the initial licensing period due to criminal history. Case number RE-22-134806

TODD, TRACEE, sales agent, Willard, Utah. In an order dated May 27, 2022, Ms. Todd's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-135245

WALLACE, CHRISTOPHER, sales agent, Augusta, Georgia. In an order dated February 23, 2022, Mr. Wallace's license was reinstated and placed on probation for the renewal period due a sanction placed on his real estate license issued by another jurisdiction during the past licensing period. Case number RE-22-133006

WEBB, KEVAN LEE, sales agent, St. George, Utah. In an order dated February 4, 2022, Mr. Webb's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-132433

WOLCOTT, CHRISTOPHER J., sales agent, Salt Lake City, Utah. In an order dated April 27, 2022, Mr. Wolcott's license was reinstated and placed on probation for the renewal period due to criminal conduct during the past licensing period. Case number RE-22-134488

There were no disciplinary or registration actions in the timeshare industry in the second quarter.

Last quarter I addressed the issue of who is responsible for earnest money deposits. If you have not read that article, the Division recommends that you do so: Earnest Money Receipt. This quarter I would like to continue with earnest money-related issues.

It is critical for licensees to understand and clearly explain to their clients the risks involved when offering non-refundable earnest money in a contract. The licensee has a fiduciary duty to help facilitate the transaction and to ensure both parties have met their contractual agreements or disclose that they have not met their obligations. In addition, knowing and communicating the risks when making an offer with non-refundable earnest money should be clearly communicated and explained to your clients.

Statute and Rules that may apply to the situation:

61-2f-401. Grounds for disciplinary action.

The following acts are unlawful and grounds for disciplinary action for a person licensed or required to be licensed under this chapter:

4. 1. failing, within a reasonable time, to account for or to remit money that belongs to another and comes into the person's possession;

R162-2f-401a (1) uphold the following fiduciary duties in the course of representing a principal:

3. full disclosure, which obligates the agent to inform the principal of any material fact the agent learns about:
   1. the other party; or
   2. the transaction;

5. reasonable care and diligence;

The Division continues to receive complaints about earnest money issues. Some complaints allege that buyers or sellers did not understand or were not made aware of the point in time when the earnest money, or a portion of it, would become non-refundable. Other complaints allege that sellers were not notified, or were informed only after the fact, that the buyer's agent did not receive earnest money from the buyer. These issues become problematic if a dispute arises and circumstances call for the release of the earnest money.

The Division recommends that a licensee discuss with and receive guidance from their principal broker when dealing with a client who has a non-refundable earnest money addendum prior to sending or presenting the offer to the seller.

The disbursement of earnest money can be released from a broker's trust account only pursuant to administrative rule R162-2f-403a (16) which states, that a principal broker may disburse funds from a real estate trust account only in accordance with:

1. specific language in the Real Estate Purchase Contract authorizing disbursement;
2. other proper written authorization of the parties having an interest in the funds;
3. this section; or
4. court order.

Brokers, be aware of the previously cited administrative rule and take precautions in the release of earnest money. The Utah Association of Realtors® has a form available to its members to help with the release of earnest money. When the funds are being held at a title company, the buyer and seller both need to understand that the release of earnest money may be more difficult. This is the reason the state-approved Title Company Earnest Money Addendum  is required to be used when earnest money is held by a title company. We recommend that all licensees re-read the 2017 1st quarter Kagie Korner article that addresses this form, as a refresher.

In Utah, if you are personally purchasing or selling a property on your own behalf and you are a real estate licensee (active or inactive) you must disclose in writing in the purchase contract that you are both a licensee and a principal.  Under no circumstances can you be a limited agent and a principal in the same transaction.  This includes if you are a member of an entity.

If you are a licensee and have an interest in a business entity that is purchasing or selling a property, you must disclose in writing in the purchase contract that you are a licensee (active or inactive) and a principal.

If you are a licensee and are married to your client and help them make a purchase through a business entity and you become a part-owner of the business entity before the closing of the transaction, you must disclose in writing in the purchase contract that you are a licensee and a principal.

If you are a licensee and give your client earnest money or other personal monies in order to secure an offer on a home – you are now a person with interest in the property and must disclose in writing in the purchase contract that you are a licensee and a principal. The Division discourages this practice.

These examples come from some of the cases I've personally investigated and resulted in the following violations of division statutes and rules concerning essential written disclosures.

61-2f-401 Grounds for disciplinary action.

The following acts are unlawful and grounds for disciplinary action for a person licensed or required to be licensed under this chapter.

10. failing to disclose, in writing, in the purchase, sale, or rental of real estate, whether the purchase, sale, or rental is made for that person or for an undisclosed principal;

R162-2f-401a Affirmative Duties Required of Licensed Individuals.

An individual licensee shall:

5. when making an offer or solicitation to buy, sell, lease or rent real property as a principal, either directly or indirectly, or as an agent for a client, a licensee shall disclose in the initial contact with the other party the fact that the licensee holds a license with the division, whether the licensee’s status is active or inactive;
6. prior to the execution of a binding purchase or lease agreement, disclose in writing to clients, agents for other parties, and unrepresented parties:
   
   1. the licensee's position as a principal in any transaction where the licensee operates either directly or indirectly to buy, sell, lease, or rent real property;
   2. the fact that the licensee holds a license with the division, whether the license status is active or inactive, in any circumstance where the licensee is a principal in an agreement to buy, sell, lease, or rent real property.

Between the years 2018 through the first quarter of 2022, there have been 17 licensees assessed with one or all of these violations that have resulted in a total financial penalty of $64,000 in fines.

There is one more disclosure-related rule:

R162-2f-401a Affirmative Duties Required of Licensed Individuals.

An individual licensee shall:

9. upon initial contact with another agent in a transaction, disclose the agency relationship between the licensee and the client.

You should introduce yourself as a licensee upon initial contact anytime you discuss real estate business on behalf of a client, yourself, or your personal business.  If you send out a mailer, that is your first point of contact and you must disclose in the mailer that you are a licensee and include your brokerage information.

The Division has been firm on assessing violations if we don't find the written licensee and principal interest disclosures in the purchase contract. It is imperative that these disclosures are made to clarify to all parties that you are a professional in the field of real estate.  If you are buying and selling on your own behalf, make sure that you disclose, in writing, that you are a principal and a licensee, and have all parties involved sign the disclosing document.  That will legitimately fulfill your duties of disclosure as a licensee and a principal in a transaction.

The Division is excited to announce that plans for our annual Instructor Development Workshop (IDW) are underway! It will be held later this year on October 25th and 26th at the Sheraton Salt Lake City. Registration and other important information will be made available in our next quarterly newsletter.

Attendance at the two-day IDW is REQUIRED once every two years for all real estate, mortgage, and appraiser pre-licensing instructors, as well as real estate continuing education instructors who teach any of the Mandatory Courses. Mortgage and appraisal CE instructors are invited and encouraged to attend this workshop, but please keep in mind that no CE credit can be given. Only Real Estate instructors (pre-license and continuing education) as well as attending real estate licensees, will be eligible to receive core continuing education credit for attendance at this outstanding training event. As a reminder, CE credits are only awarded in full-day segments.

We are also excited to announce and introduce to you this year's guest speaker, Jim Fletemier. Jim is a Nationally recognized motivational humorist and instructional developer, as well as a former residential Broker in the Lake Norman/North Charlotte market of North Carolina, consistently one of the most dynamic markets in the Country. He brings true passion and a unique approach to lifelong learning, and an observational lens that certainly puts a different spin on things!

Jim is also the founder and Lead Curriculum Developer for E4 Education Development Services© (a B2B consultative instructor and curriculum development firm serving adult education and trainers worldwide) as well as the lead researcher on some current forward thinking in the field of Educational Psychology. A comment often heard from students and student instructors is that Jim makes "the complicated concepts finally make sense." In addition to being an NC Broker in Charge, Jim holds the DREI designation, the highest designation given to Real Estate Instructors nationally.

A self-proclaimed dog person and keen observer of the obvious, Jim regularly leaves his students smiling, laughing, and inspired while somehow having learned even more than they realize! A true believer in leading by example, Jim is known for demonstrational teaching methods that highlight the skills being taught.

We are very excited to have Jim as our speaker this year and are looking forward to seeing you all there. Keep an eye out for registration information in our next newsletter!