Newsletters

• Director's Message – Drones and Accessory Dwelling Units (ADUs)
• Rule Developments Since June 1, 2021
• Kagie's Korner
• Staff Spotlight – Michael Genco
• Appraisers: Inspecting Properties and Signing Reports
• WANTED: Willing Supervising Certified Appraisers
• 2022 Mortgage License Renewal
• Third Quarter Licensing & Disciplinary Actions
• "Love Letters" or "Pick Me Letters"
• By Written Consent
• A Message from the Appraiser Board
• Request for Volunteers – Appraisal Experience Review Committee Members
• 2021 Instructor Development Workshop
• Credits

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 no recently adopted or proposed rule amendments under consideration for the Appraisal Management Company rules.

The Appraiser Board is currently considering a possible proposed rule amendment that would provide an alternative means of obtaining appraisal experience through Practical Application of Real Estate Appraisal, or "PAREA." The Division is drafting a proposed rule amendment that would allow an appraiser to obtain required experience through the completion of PAREA modules. More information will be available as the proposed rule amendment is drafted and considered by the Appraiser Board. In addition, the Board formed a committee to consider possible statutory or rule amendments relative to data collection as part of the appraisal process. The committee has held several meetings but has not, as yet, made a recommendation to the Board.

On September 7, 2021, the Division filed a proposed rule amendment, approved by the Residential Mortgage Regulatory Commission that would adopt rule amendments, summarized as follows:

Section R162-2c-201 — replace the requirement that an applicant evidence "good moral character" with statutory requirements of honesty, integrity, and truthfulness;

Section R162-2c-202 — eliminate references to "moral turpitude and moral character;" and eliminate references to unnecessary and now irrelevant dates;

Section R162-2c-203 — eliminate references to "moral character," clarify the available formats for Utah-specific education instruction, including traditional classroom, virtual-live, distance education, and other formats, and also clarify that the 20 hours of instruction required to renew an instructor certification is not limited to classroom instruction;

Section R162-2c-204 — eliminate references to "moral character," and coordinate the timing for state required fingerprinting for a criminal background check and submission of a credit report with national requirements, thus eliminating the expense to licensees for unnecessary and mostly redundant criminal background checks and credit reports; and

Section R162-2c-301b — delete this outdated section on employee incentive programs.

If approved, the amendment of R162-2c-204 would allow Division staff to rely on the background and credit checks provided by renewal applicants in the NMLS.  This proposed rule amendment would save a considerable amount of staff time during the annual license renewal period and would avoid a need for some applicants and licensees to submit to additional background and credit checks for licensure in Utah within a short period of time after submitting to the same checks for the NMLS.  This proposed rule amendment has been published and is open for public comment through October 15.

On June 8, 2021, the Real Estate Commission approved a significant rule amendment affecting numerous sections of the Real Estate Licensing and Practices Rules.  A summary of those amendments was included in the Second Quarter newsletter, published June 30, 2021.  The Division would like to make a correction or clarification to the summary in the June 30, 2021, newsletter article for Section R162-2f-403a.

Section 403a(15) of the amended rule requires that a principal broker not pay a commission from the real estate trust account without depositing the funds into the broker's operating account prior to further disbursing the funds.  The summary from the last June 2021 newsletter did not specify that the requirement to transfer funds to the broker's operating account prior to further disbursing the funds is only required for commissions.  Certain other deposits may be paid directly from the real estate trust account.  If you have any questions regarding transfers of funds from a trust account, or other questions regarding recent rule amendments, please contact the Division or refer directly to the language in the rules, as amended.

The Commission formed a committee to review state approved and other real estate forms for possible updates.  The committee recommended an update to the Seller Financing Addendum.  The Commission approved the updated Seller Financing Addendum and it has been forwarded to the Attorney General for review and approval.  Other forms are also being considered for possible updates.

The legislature recently enacted legislation that requires the Division of Real Estate to enforce provisions involving an affiliated business arrangement between title licensees or insurers and persons who are in a position to refer business incident to or part of a real estate settlement service, including associates of those persons.  This legislation also authorized the Division to make rules necessary to implement the regulation of affiliated business arrangements.

The Division recently filed a proposed rule entitled Affiliated Title Business Rule.  This proposed rule is under final review by the Division of Administrative Rules.  The proposed rule would require each new or newly affiliated title business to notify the Division in writing of the affiliated relationship within 30 days of the date of affiliation.  This proposed rule amendment has been published and is open for public comment through October 15.

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

Year after year, the Division notes that blind advertisements (not identifying the brokerage affiliation in a clear and conspicuous manner in the ad) are the most common violations of Utah law and administrative rule.  The Division continues to receive a number of complaints about advertising violations. Advertising rules are one of the most basic and well-known compliance regulations in the industry.  So why are these also the most common complaints the Division receives?

In the Division's 2013 fourth quarter newsletter an article was included to notify the industry regarding the high volume of advertising complaints and the new penalty for violating the statute and rule.  In 2013 the Real Estate Commission provided guidelines to the Division proposing sanctions to those licensees that violate these rules.

Recently, in the September 15, 2021 Real Estate Commission Meeting, the Commission provided updated guidance to the Division regarding sanctions for violating the advertising statutes and rules.  The Commission recommended increasing the civil penalty for advertising violations.  These guidelines will become effective October 15, 2021.  These new sanctions will apply to complaints received by the Division for conduct occurring on or after October 15, 2021.

The recommended sanction for a first-time advertising violation as described above is a civil penalty of $500.  These violations are typically addressed through a citation issued by the Division.  There is an appeal process if the licensee does not agree with the Division's allegations in the citation.  As with any citation, the misconduct will appear in the disciplinary section of the Division's quarterly newsletter.  The Division will also notify the licensee's broker with a letter outlining the violation and will warn the licensee that further violations could result in additional sanctions.

If the Division issues a second citation to the real estate licensee for a subsequent advertising violation, the civil penalty may be $1,000.  And if the licensee's broker was warned about the previous advertising violation and failed to take adequate steps to avoid further violations by an affiliated licensee, the Division may bring an enforcement action against the broker for failing to supervise.

A third advertising violation by a licensee may require the licensee and/or broker to appear before the Real Estate Commission at an enforcement hearing.

Be transparent, and follow the advertising rules.  When you advertise real estate services, the public is entitled to know the brokerage you are affiliated with and you should be proud of your affiliation.

Common areas of Confusion Regarding Statutory and Administrative Rule Requirements for signing reports and inspecting properties

Property Inspections Performed by Trainees and Their Supervising Certified Appraiser(s)

What Duties Can Be Delegated and Limitations on Delegating Property Inspections by Trainees if the Appraisal Report Scope of Work or Certification Requires Appraiser Inspection?

R162-2g-502a(5)(a) A supervisory appraiser shall delegate to a trainee only such duties as the trainee is authorized to perform under Subsection R162-2g-311 Scope of Authority, subsection (1):

1. An individual who has properly qualified as a trainee pursuant to Section R162-2g-302 may perform appraisal-related duties within the competence and scope of authority of the state-certified supervisory appraiser as follows:
   1. participating in property inspections;
   2. measuring or assisting in the measurement of properties;
   3. performing appraisal-related calculations;
   4. participating in the selection of comparable properties for an appraisal assignment;
   5. making adjustments to comparable properties; and
   6. drafting or assisting in the drafting of an appraisal report.
2. A supervisory appraiser shall directly train and supervise the trainee in the performance of assigned duties by:
   1. critically observing and directing each aspects of the appraisal process;
   2. accepting full responsibility for the appraisal and the contents of the appraisal report by signing and certifying the appraisal complies with USPAP; and
   3. reviewing and signing the trainee appraisal reports.
3. A supervisory appraiser shall personally inspect:
   1. each property that is appraised with a trainee until the supervisory appraiser determines the trainee is competent to inspect the property in accordance with the competency rule of USPAP for the property type, and the trainee has performed at least:
      1. 35 residential inspections as provided in Subsection R162-2g-311(1)(c)(i); and
      2. 20 non-residential inspections as provided in Subsection R162-2g-311(1)(b)(ii); and
   2. any property for which the appraisal report scope of work or certification requires appraiser inspection.

7. 1. include in each appraisal report a statement indicating whether or not the subject property was inspected as part of the appraisal process; and (ii) if any inspections were done, include the following information concerning each inspection:
      1. the names of appraisers and trainees who participated in the inspection;
      2. whether the inspection was an exterior inspection only or both an exterior and an interior inspection; and
      3. the date that the inspection was performed;

Who Can Sign an Appraisal Report?  The 2020 legislative session changed the statute allowing the Appraisal Board to make rules regarding who and under what circumstances Trainees, Licensed, and Certified Appraisers can sign appraisal reports.  The statutory reference and subsequent Administrative Rules are cited and/or highlighted below:

61-2g-401 State-certified and state-licensed appraisers — Restrictions on use of terms — Conduct prohibited or required — Trainee.

5. In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and with the concurrence of the division, the board may make rules for the administration of this section regarding:
   1. the signing of an appraisal report; or
   2. the disclosure and use of an appraiser or an appraiser trainee's division-assigned credential, registration, license, or certification number.
6. If a trainee assists a state-certified appraiser in the preparation of an appraisal report, the appraisal report shall disclose:
   1. the trainee's name; and
   2. the extent to which the trainee assists in the preparation of the appraisal report.

R162-2g-502a. Standards of Conduct and Practice.

1. 1. immediately following the signature on the report in an appraisal report prepared and signed by a state-licensed or certified appraiser, state either:
      1. the credential type of State-Licensed Appraiser, State-Certified Residential Appraiser, or State-Certified General Appraiser; or
      2. the license or certification number assigned to the appraiser by the division.

4. Unless there is a client assignment condition prohibiting an appraiser trainee from signing an appraisal report, when an appraiser trainee performs significant appraisal assistance on an appraisal, the trainee may sign the appraisal report if the appraisal report is also signed by the trainee's supervisory appraiser.  The appraiser trainee shall state, immediately following the trainee's signature in the report, "Trainee" and include the registration number assigned to the appraiser trainee by the division.

All Mortgage licenses are required to be renewed on an annual basis. Renewal requests can be made on your NMLS filing between November 1st and December 31st.  You can prepare now so that your renewal will go smoothly by following these checklists:

Individual Renewal Checklist: (loan originators and lending managers)

Before November 1st, 2021

1. Review your filing in the NMLS to make sure your information is current and correct.  This includes mailing address, email, phone numbers, name, and employment history.
2. Review your NMLS filing to make sure there are no license items placed on your filing.  License items can be deficiencies or requirements that are pending on your license and must be cleared prior to requesting renewal.  When a license item is placed on your filing, you receive an email through the NMLS notifying you of the deficiency or requirement.  Some common deficiencies include Employment History Updates, ACH Payments that may have been returned unpaid, requests for information about Disclosure Questions or Credit Reports.  Satisfy all pending license items prior to renewal.  You may call the Division of Real Estate licensing section at 801-530-6747 if you do not understand a noted deficiency or need help in getting it cleared.  For assistance in navigating the NMLS system please contact the NMLS Call Center at (855)-665-7123.  NMLS Support staff will assist you in NMLS system use issues and for help requesting your license renewal online.
3. If your driver's license number has changed, be sure to indicate this update on your filing, as well as your US citizenship status.  This is found under the Identifying Information section on your MU4 form.  If this information is incorrect or incomplete, we may place a deficiency on your license requiring you to provide the Division with a copy of the Certificate of Legal Presence .  If your information is recorded accurately on your filing, you will not need to submit this form (Certificate of Legal Presence) to us as you may have done in prior years.
4. Education:  NMLS-approved continuing education (8 hours), the Utah Law Course (2 hours), and MLO's licensed between 11/01/2020 and 10/31/2021 must have completed the new Utah MLO Course (5 hours) by 10/21/21 if they desire to renew their mortgage license at the beginning of the 2022 renewal period on November 1st.  Lending Managers are NOT required to complete the new Utah MLO Course.  Each of these CE requirements must be completed prior to requesting renewal.  It is recommended that these hours be completed no later than December 15th, 2021 in order to ensure an on-time renewal.  The NMLS will prevent you from requesting renewal if these hours are not banked in the NMLS.
5. If your license is on probation and there are requirements that must be completed at renewal, either to have the probation removed or as terms of the probation, make sure these items are reported to the Division before you request renewal.  This will aid in getting your renewal processed in a timely manner.
   

   *MLO'S LICENSED BETWEEN 11/01/20 AND 10/31/2021 MUST HAVE COMPLETED THE NEW UTAH MLO COURSE (5 HOURS) BY 10/21/21 IF THEY DESIRE TO RENEW THEIR MORTGAGE LICENSES ON NOVEMBER 1ST*  You will be prevented from renewing until your hours are banked on the NMLS.

On or After November 1st, 2021:

1. You may request renewal of your license through the NMLS .  The renewal fee is $78.00 which includes the NMLS processing fee of $30, Renewal fee of $30.00 and Recovery Fund fee of $18.00.  You will be required at that time to ATTEST to the accuracy of your filing so make sure, once again, that all is correct.
2. If there is a change in your answers to the Disclosure Questions, you must upload the required documentation explaining the change in your filing.
3. If you request your renewal prior to January 1st, 2022, your license will remain in the status that it was prior to your request for renewal.  If your status was active, you can continue to work as usual while your request is being reviewed.  Approval of your request for renewal is contingent on all requirements being met.
4. A credit report and background check are NOT REQUIRED this year.

Entity License Renewal Checklist: (companies, DBAs, branches)

Prior to November 1st, 2021:

1. Review MU1 filing and/or MU3 filing to confirm that all the information including company location, mailing address, contact information, etc., is correct.
2. If there is a change to any of your answers to the Disclosure Questions, you must provide a detailed explanation and upload documentation to support your explanation.
3. Review the entity filing to make sure there are no license items placed on the filing.  These items could include things like a returned ACH Payment, update qualifying individual, company ownership, missing quarterly MCR reports, etc.
4. Provide a current Certificate of Existence for all entities & DBAs from the Utah Division of Corporations .  Please upload your certificate to the Certificate of Authority/Good Standing section document upload of you MU1 filing.  You may replace your 2021 certificate with the new 2022 certificate.

On or After November 1st, 2021:

1. Request and pay renewal fees through NMLS between November 1st and December 31st, 2021.  If renewal is requested prior to January 1st, 2022, your license will remain in the status that it was prior to your request for renewal.  If the status was active, work can continue as usual while your request is being reviewed.  Approval of your request for renewal is contingent on all requirements being met, in which case, the Division will process your request as quickly as possible.  A new 2022 license will be emailed to the email address listed in the regulator contact information.

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/

There were no disciplinary or licensing actions in the appraisal or AMC industries in the fourth quarter.

AMERICAN FINANCIAL NETWORK, INC. ("AFN") and John Sherman, Broker and Owner, Brea California.  In a stipulated order dated June 2, 2021, AFN admitted that it allowed persons affiliated with AFN, including a licensed mortgage loan originator and an unlicensed individual, to solicit mortgage services, that the actions of these individuals included engaging in false or misleading advertising, and that AFN failed to exercise reasonable supervision over the mortgage loan originator and unlicensed staff member.  The misleading advertisements created an undue sense of urgency and one mailer suggested that it had been sent by the Veteran's Administration rather than by AFN.  These actions are in violation of Utah law.  AFN agreed to pay a civil penalty of $6,000 and to update its MU-1 form in the NMLS.  Case number MG-17-94-129, MG-18-105708, and MG-20-118115

ABDULKAREEM, EHAB M., Sales agent, West Valley City, Utah.  In an order dated July 30, 2021, Mr. Abdulkareem's license was granted and placed on probation for the initial licensing period due to criminal history.  Case number RE-21-128690

ALLRED, GARRET C., sales agent, North Ogden, Utah.  In a stipulated order dated July 21, 2021, Mr. Allred admitted that he violated Utah law and administrative rules when he did not identify the name of his brokerage in marketing materials.  He agreed to pay a civil penalty of $150.  Case number RE-18-101224

BERRETTA-CAMPBELL, STEPHANIE, Sales Agent, Springville, Utah.  In an order dated August 16, 2021, Ms. Berretta-Campbell's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period.  Case number RE-21-128990

CALDWELL, WILLIAM, principal broker, Ogden, Utah.  In a stipulated order dated June 16, 2021, Mr. Caldwell admitted that he continued to receive tenant rental payments and security deposits after the property management agreement with the property owner had been terminated.  Mr. Caldwell eventually accounted for the funds and delivered those funds to the property owner, but not within the required time period.  These actions are in violation of Utah law and administrative rules.  Mr. Caldwell 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 his next license renewal.  Case number RE-19-112563

CAREY, SAINA D., sales agent, Moab, Utah.  In a stipulated order dated August 18, 2021, Ms. Carey admitted that she continued to market a property for sale after she had been informed that her client had previously signed a listing agreement with another brokerage.  She eventually removed her listing from the MLS.  Ms. Carey states that the seller told her that the seller was not working with another agent and that after she was informed of the prior listing, she made several attempts to meet with the other broker to work out a co-listing.  Ms. Carey agreed to pay a civil penalty of $500 and to complete three hours of continuing education in addition to the continuing education required for her next license renewal.  Case number RE-17-92513 and docket number RE-2020-023

CARRASCO-SOTO, MIGUEL, Sales Agent, Roy, Utah.  In an order dated August 27, 2021, Mr. Carrasco-Soto's license was granted and placed on probation for the initial licensing period due to criminal history.  Case number RE-21-129274

DOMINGO, AJALYNN MALANI, Sales Agent, South Jordan, Utah.  In an order dated August 26, 2021, Ms. Domingo's license was renewed and placed on probation for the renewal period due to plea in abeyance agreements in criminal matters during the past licensing period.  Case number RE-21-121194

ESPARZA, ANTHONY ALEXANDER, Sales Agent, South Jordan, Utah.  In an order dated May 5, 2021, Mr. Esparza's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period.  Case number RE-21-126861

ESTRADA, CHRISTOPHER LEE, Sales Agent, West Valley City, Utah.  In an order dated June 9, 2021, Mr. Estrada's license was renewed and placed on probation due to a pending criminal matter.  Case number RE-21-127614

HANDLEY, JAMES WYATT, Sales Agent, West Bountiful, Utah.  In an order dated August 31, 2021, Mr. Handley's license was renewed and placed on probation for the renewal period due to a plea in abeyance agreement in a criminal matter during the past licensing period.  Case number RE-21-129349

HINRICHS, JANINE GAIL, Sales Agent, Heber City, Utah.  In an order dated August 20, 2021, Ms. Hinrichs's license was granted and placed on probation for the initial licensing period due to criminal history.  Case number RE-21-129097

JORGENSEN, CODY RYAN, Sales Agent, Syracuse, Utah.  In an order dated June 17, 2021, Mr. Jorgensen's license was granted and placed on probation for the initial licensing period due to criminal history.  Case number RE-21-127810

KEMP, RYAN T., Sales Agent, Syracuse, Utah.  In an order dated July 22, 2021, Mr. Kemp's license was renewed and placed on probation for the renewal period due to a plea in abeyance agreement in a criminal matter during the past licensing period.  Case number RE-21-128520

LUCERO, PATRICK RIVERA, Sales Agent, Bountiful, Utah.  In an order dated June 17, 2021, Mr. Lucero's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period.  Case number RE-21-127812

OLPIN, STEVE N., principal broker, Sandy, Utah.  On June 16, 2021, the Division issued a citation to Mr. Olpin for failing to respond to the Division within 10 days in an authorized investigation, despite numerous requests by the Division, in violation of Utah law.  The citation assessed a fine in the amount of $1,000.  Citation #DREC-21-4, case number RE-18-100408

OSTLER, BLAKE HARRIS, Sales Agent, Lewiston, Utah.  In an order dated June 30, 2021, Mr. Ostler's license was renewed and placed on probation for the renewal period due to a plea in abeyance agreement in a criminal matter during the past licensing period.  Case number RE-21-128124

PARKER, MITCHELL L., sales agent, Ogden, Utah.  In a stipulated order dated June 16, 2021, Mr. Parker admitted that he represented a buyer in a transaction without a written agency agreement.  In addition, he delivered the earnest money to the title company and did not hold it at his brokerage as provided for in the REPC.  Mr. Parker also failed to timely cancel the REPC as instructed by the buyer.  Mr. Parker admits that his actions were in violation of Utah administrative rules.  He agreed to pay a civil penalty of $2,500 and to complete three hours of continuing education in addition to the continuing education required for his next license renewal.  Case number RE-18-104077 and docket number RE-2021-002

SPEIRS, SHANE, Sales Agent, South Jordan, Utah.  In an order dated June 3, 2021, Mr. Speirs's application for licensure was denied due to his criminal history.  Case number RE-21-127500

STATOVICK, MICHELE, Sales Agent, Holladay, Utah.  In an order dated August 17, 2021, Ms. Statovick's license was renewed and placed on probation for the renewal period due to criminal conduct during the past licensing period.  Case number RE-21-129024

TEBBS, TYLER STRANGELAND, sales agent, Lehi, Utah.  Mr. Tebbs appealed the prior denial of his application for licensure.  In an order dated July 27, 2021, the Real Estate Commission granted Mr. Tebbs a conditional sales agent license and immediately suspended the license for one year, due to criminal history.  Following the period of suspension, Mr. Tebbs’s license will be placed on probation for the remainder of the initial licensing period.  Case number RE-21-126416

THORNLEY, KADEN JAMES, Sales Agent, Layton, Utah.  In an order dated July 29, 2021, Mr. Thornley's license was granted and placed on probation due to a pending criminal matter.  Case number RE-21-128676

TRAN, NHU LIEU THI, sales agent, Midvale, Utah.  In a stipulated order dated June 16, 2021, Ms. Tran admitted that she employed other sales agents in the marketing of a home owned by an entity for which she was a principal, and that she failed to disclose her status as a licensed real estate agent and her status as a principal in the transaction.  Ms. Tran's actions are in violation of Utah law and administrative rules.  Ms. Tran agreed to pay a civil penalty of $2,000 and to complete six hours of continuing education in addition to the continuing education required for her next license renewal.  Case number RE-19-112618 and docket number RE-2021-003

WASATCH VACATION HOMES, unlicensed activity, Salt Lake City, Utah.  On June 10, 2021, the Division issued a citation to Wasatch Vacation Homes ("WVH") for unlicensed activity.  WVH is in the business of managing a short-term rental business (30 days or less) which does not require licensure with the Division.  However, between August 15, 2020, and January 20, 2021, WVH made two reservations for terms exceeding 30 days without registering as a property management company, in violation of Utah law.  The citation assessed a fine in the amount of $1,000.  Citation # DREC-21-3, Case number RE-20-122274

WATERFALL, CHARLES COLE, sales agent, Draper, Utah.  In an order dated July 20, 2021, Mr. Waterfall's application to renew his license was denied due to his plea in abeyance agreement to felony charges brought against him during the past licensing period and while his license was on probation.

BRIONES, MARLO R., timeshare salesperson, West Valley City, Utah.  After the initial denial of his application for registration as a timeshare salesperson for failure to disclose criminal history in his application for registration, Mr. Briones made a second application for registration.  In his second application, Mr. Briones fully disclosed his criminal history and his application for registration was approved.  Case number TS-21-129193

LEON, BRYAN, timeshare salesperson, Salt Lake City, Utah.  In an order dated June 30, 2021, Mr. Leon's application for registration as a timeshare salesperson was denied for failing to disclose criminal history in his application and due to his history of disregarding court orders in the undisclosed criminal cases.

Love letters are a recent phenomenon used in real estate transactions where a prospective buyer tries to entice a seller to accept their offer.  These letters often include personal information, that if relied on, could be a violation of the Fair Housing Act.  Sellers should avoid selecting a buyer based on race, religion, color, national origin, sex, sexual orientation, marital status or familial status.  "Love Letters" may very well speak to these descriptors either directly or indirectly and one could feel discriminated against if a seller selected a different buyer.

The Utah Association of Realtors® has an excellent Facebook Live about Love Letters.  We highly recommend all brokers and agents take the time to watch their video: Love Letter Facebook Live .

The National Association of Realtors® also shared some recommendations for best practices when dealing with Love Letters:

• Educate your clients about the fair housing laws and the pitfalls of buyer love letters.
• Inform your clients that you will not deliver buyer love letters, and advise others that no buyer love letters will be accepted as part of the MLS listing.
• Remind your clients that their decision to accept or reject an offer should be based on objective criteria only.
• If your client insists on drafting a buyer love letter, do not help your client draft or deliver it.
• Avoid reading any love letter drafted or received by your client.
• Document all offers received and the seller’s objective reason for accepting an offer.

Please read the rest of the information provided by the NAR here:
https://www.nar.realtor/fair-housing-corner/love-letters-or-liability-letters

In the past few years, we've had several complaints and questions concerning licensees listing properties without having the written consent of all (or any) owners of record.

§61-2f-202(5)(a-e)  An owner does not include a person who holds an option to purchase real property, a mortgagee, a beneficiary under a deed of trust, a trustee under a deed of trust or a person who owns or holds a claim that encumbers real property, etc.

Additional questions arise regarding acceptable signatories on behalf of Trusts, Limited Liability Companies (LLCs), corporate entities and those who have been assigned a Power of Attorney (POA).

§61-2f-102 (14)(a-i)  Entity means: corporation, partnership, LLC, company, association, joint venture, business trust, trust or any organization similar to an entity.

Before you take a listing, there are a few quick ways to check ownership of a property before you sign paperwork with your sellers.  The easiest is a quick search for property tax records on the local Multiple Listing Service, if you are a member, or your county recorder’s office.  Each of these sources will provide the current owner's name and address.  If you have enough notice of an upcoming listing, ask a title company to order a Preliminary Title Report which will give you similar ownership information.

When you present your listing contract to your seller, there is a paragraph that you need to be direct in addressing – Seller Warranties/Disclosures.  In this section, the seller warrants that they are the property owners of record.  Be clear in asking if there are any other owners of record to the property that need to give written consent before listing and advertising a property.

For buyers, you should become aware of who you are representing, whether it is an individual or other entity, when you have your buyer sign the Buyer-Broker Agency Agreement.  If you are representing an entity other than an individual, the best practice would be to ask for a copy of the Trust, LLC, Entity or POA paperwork to ensure the proper authority of signers.

You can find the authorized signatories for an LLC or other entities with the Utah Division of Corporations for a nominal fee.  Trusts and POAs are typically not filed with the local record repositories, so check with your clients before any documents are signed to avoid potential pitfalls.

When making an offer with the Real Estate Purchase Contract, be sure to address section 13, Authority of Signers, where the buyer warrants their binding authority to sign on behalf of a corporation, partnership, trust, estate, LLC or other entity.

In the following paragraphs are a few instructive examples of problematic scenarios that we have experienced at the Division that should help you recognize and avoid written consent liability as you continue to list and sell properties in Utah.

Written Consent to List a Property

A property is under contract.  The buyer submits a complaint alleging that the listing agent is having someone other than the owner of record sign the purchase contract.  The Division Investigator's interview with the listing agent goes something like this:

Investigator:  Is the person signing the contracts on behalf of the seller the owner of record?

Licensee:  No, but she is the mother of the owner of record.

Investigator:  Do you have a Power of Attorney for the mother to sign on behalf of the owner of record?

Licensee:  Um...I’ll have to check on that but no, I don’t think so.

Investigator:  Did the owner of record sign the listing contract?

Licensee:  No, but we were going to have the property put in the mother's name at closing.

This example is simplified but it's clear that the owner of record did not give written consent to list or sell this property.  Potential violations:

§61-2f-401(12), Advertising the availability of real estate in a false, misleading or deceptive manner; and

§R162-2f-401b(17)(a) Advertising property to sell or lease without the written consent of the owner of the property.

Signing on behalf of a Trust, LLC, Corporation or other entity

We received a phone call where a property held in a joint Trust was listed and now under contract without one of the Trustee's written consent.

The authorized signing Trustees; (sister (1), sister (2) & a brother) had discussed listing the property to sell as a group but sister (2) declined to give consent to sell the property. Sister (1) & brother decided to list the property with a licensed agent without disclosing that there was another non-consenting party, sister (2).

Sister (2) received a phone call from her siblings stating that they had listed the property and it was now under contract and that if she didn't sign the closing paperwork, they would all be in breach of contract.

Sister (2) reached out to the listing agent, who had no idea that there was another party that had not authorized the listing or the sale of the property.  As of this date, the licensee has not reached out to sister (2) with any explanations on how to move forward.

This is a transaction in process, so I don't know the end of the story and I don't know if the licensee was at fault, but you can imagine the problems that might arise in this situation.  One thing that is apparent is that the licensee failed to find out who the authorized signers of the Trust were before listing, advertising, and selling the property.

Power of Attorney

We have a licensee who listed a property with an owner of record.  After the listing became active, the owner granted a POA to the licensee to sign on the owner's behalf.  If done correctly, this is legal.

R162-2f-401a(19)(a)  In order to sign or initial a document on behalf of a principal in a sales transaction: (a) you must obtain prior written authorization in the form of a power of attorney duly executed by the principal.  This administrative rule further states (b-e) that you must retain the POA in your transaction file, attach it to anything you sign or initial and sign it with the "Owners Name, by Your Name, Attorney in Fact."

The licensee decided to purchase the property for himself as an investment and had authority to sign on the owner's behalf, but wisely had the owner sign on the owner's own behalf since using the authorizing POA would be a clear conflict of interest if not a breach of fiduciary duty in this matter.

If your buyer or seller authorizes someone to sign on their behalf with a POA, you need to get a copy of the POA, which should be signed and notarized.  A POA is typically drafted by an attorney and each POA is different, so read it carefully to ascertain if the person named in the POA is authorized to buy and sell the property.  If so, have the authorized person sign documents with the principal's name, by the authorized person's name, Attorney-in-Fact.  A POA can be revoked at any time so it's wise to verify with the person giving the POA that the document is current and valid.

Please note:  Title Companies often require a Durable Power of Attorney in order to transfer real property, so check with them to ensure you have appropriate documentation to close a transaction.

In all your transactions, don't assume that a person is authorized to sign on a titled property or on behalf of a trust, business entity, or POA, even if they are a good friend or family member of the owner of record.  Cover your bases by verbally addressing this directly with your clients, then obtain and read the documents to ensure that you have the proper written authority of all owners of record.

Laurel North – Lead Investigator – Division of Real Estate

In a recent Appraisal Board meeting, the Board considered the appeal of a license applicant whose experience had been determined to be insufficient to allow the applicant to sit for the license exam.  We have noticed a consistent, recurring problem in the training of individuals who participate at an experience review appeal hearing.  That problem is a deficient workfile.  As board members, we thought it would be a good reminder for everyone to review what is important to be included in an appraisal workfile.

Let's review what USPAP states about the workfile.  For your reference FAQ 82-110 and the record Keeping rule include the following information:

1. An appraiser must prepare a workfile for each appraisal or appraisal review assignment.  A workfile must be in existence prior to the issuance of any report or other communication of assignment results.  A written summary of an oral report must be added to the workfile within a reasonable time after the issuance of the oral report.

We often see things that were added to the workfile just days before submission to the board for review.  Which begs the question as to what the workfile contained when it was originally compiled at the time of the appraisal.

2. The workfile must include:
   • The name of the client;
   • True (signed) copies of all written reports;
   • Summaries of all oral reports or testimony, or a transcript of testimony, including the appraiser’s signed and dated certification; and
   • All other data, information, and documentation necessary to support the appraiser's opinions and conclusions and to show compliance with USPAP, or references to the location(s) of such other data, information, and documentation.  USPAP 2020-2021 Record Keeping Rule.

The last bullet point regarding "all other data" is typically the area that is found to be missing and/or deficient.  Here are a few examples:

1. The appraisal states that the land site extraction method was used to determine the site value.  However, the workfile does not contain the land site extraction documentation or notes on how this was completed.  The question arises if the work stated was ever completed.
2. The sales comparison approach was used to determine the site value, and no land sales are in the workfile.  Or if the sales are in the workfile, no other information was in the report to reflect how the site value was determined.
3. Paired sales analysis was used to determine the lot size adjustment.  No comments on the process or other comparable sales other than those used within the report are in the workfile.

There are many other examples, but the bottom line is, when you state that you have performed an appraisal analysis procedure, that analysis procedure should be contained in the workfile.  Since the appraisal is part of the workfile, if more specific comments are made in the appraisal, that will satisfy both the workfile requirement as well as provide support within the appraisal itself.

The purpose of a workfile is for the appraiser as much as it is for anyone else.  Create your workfile as if you would need to document, support, or defend your work five years from when the appraisal was completed.  Put enough information in the workfile so that you and your peers would know what you did, why you did it, how you determined it was necessary and what the market's reaction to that component was at the time of the appraisal.

Due to the number of new appraiser applications being submitted to the Division, many current members of the Board approved Experience Review Committee are being asked to complete a growing number of USPAP review assignments.  Certified Appraisers, please consider submitting your resume and requesting appointment to the Experience Review Committee to help "lighten the load" of current committee members and help new appraisal applicants to avoid having to wait months to have their experience assignments reviewed.

A sincere THANK YOU to all current members of the committee for their generous contribution (just imagine...some members have been serving for many years) to the appraisal industry by providing this necessary and very important work!

Please respond to  realestate@utah.gov under the subject line: Appraisal Experience Review Committee

The Division of Real Estate will be holding its annual Instructor Development Workshop (IDW), Wednesday and Thursday, October 27th and 28th, at the Sheraton Park City.

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 the Mandatory Course. Mortgage and appraisal CE instructors are invited to attend this course, although no CE credit can be given. Only Real Estate instructors (pre-license and continuing education) as well as attending real estate licensees, will receive 13 hours of core continuing education credit for attendance at this outstanding training event. Please keep in mind that CE credits are only awarded in full-day segments.

Craig GrantCraig Grant "The Real Estate Tech Guru" from Stuart, Florida will be the featured presenter for this two-day event. Craig presents over 150 speaking engagements around the country every year including some of the industry's top events for NAR, CRS, many state associations, and national franchises. Mr. Grant will engage our industries' instructors to improve their techniques and skills.

Among other things, Craig plans to "raise attendees' overall tech skill level." "He will show you how you can modernize your classrooms and perform technology marketing."

The morning of October 27th, Division staff will present industry updates and information to the participants.

Registration is now being accepted for this event. Please complete the following registration form and return it to the Division with payment to reserve your seat. Registration numbers are limited and will be filled on a first come, first served basis.