Utah Real Estate Broker Exam — All Questions

Utah Code Section 61-2f-401 lists grounds for discipline involving money that belongs to another and comes into a licensee's possession. Those grounds cover:

• a.Depositing it in a trust account within three business days
• b.Holding it in a Utah bank rather than a Utah credit union
• c.Delivering it to the principal broker on the day it arrives
• d.Failing to account for it, commingling it, or diverting it✓

Section 61-2f-401(4) makes it grounds for discipline to fail, within a reasonable time, "to account for or to remit money that belongs to another and comes into the person's possession," to commingle that money with the person's own, or to divert it "from the purpose for which the money is received." Section 61-2f-403(1) lets the division audit trust accounts and, on evidence of gross mismanagement, commingling, or misuse, order a full audit by a certified public accountant at the licensee's cost under Subsection (2). The other three describe compliance rather than misconduct: Rule R162-2f-403a(1)(a)(i) accepts a bank or a credit union located in Utah, Rule R162-2f-401c(1)(h)(i) sets the three-business-day deposit deadline, and Rule R162-2f-401a(24) requires the agent to deliver money to the principal broker immediately.

A Utah licensee is convicted of a felony that has nothing to do with real estate. Under Utah Code Section 61-2f-401 the conviction is:

• a.Grounds for discipline only after the sentence is completed
• b.Reportable to the division but not itself a ground for action
• c.Grounds for discipline regardless of the link to real estate✓
• d.Outside the section, since it did not involve a transaction

Section 61-2f-401(11) opens with the words "regardless of whether the crime is related to the business of real estate" and then makes it grounds for discipline to be convicted of a felony, or of a class A or class B misdemeanor involving fraud, misrepresentation, theft, or dishonesty. Subsection (11)(b) and (11)(c) add a guilty or nolo contendere plea and a plea in abeyance agreement for the same offenses, so a case that never reaches a conviction can still count. The ground exists on entry rather than on completion of a sentence, and while Section 61-2f-207 and Section 61-2f-301 impose separate reporting duties, Subsection (11) is itself an independent ground. Rule R162-2f-204(2)(a)(ii)(A) separately bars renewal for an applicant with a felony conviction since the last date of licensure.

The Utah division serves a licensee with a request for documents in an authorized investigation. Under Utah Code Section 61-2f-401, failing to respond is a ground for discipline after:

• a.5 business days after the day on which the request is served
• b.10 business days after the day the request is served✓
• c.30 business days after the day the request is served
• d.20 business days after the day the request is served

Section 61-2f-401(18) makes it grounds for discipline to fail to respond to a request by the division in an authorized investigation "within 10 business days after the day on which the request is served," and lists failing to respond to a subpoena, withholding evidence, and failing to produce documents or records as examples. Rule R162-2f-401a(25) states the licensee's side of the same obligation and adds that the division may not bring an enforcement action on it more than four years after the violation. Section 61-2f-102(9) defines a business day as a day other than a Saturday, a Sunday, or a federal or state holiday, so the count is not in calendar days. The same 10-business-day period governs instructor responses under Rule R162-2f-401e(1)(b).

A Utah sales agent is not paid a commission she believes she earned. Utah Code Section 61-2f-401 tells her that recording a lien on the property would be:

• a.Permitted, if she records it after the transaction closes
• b.Permitted, if the listing agreement expressly allows it
• c.Grounds for disciplinary action against her license✓
• d.Permitted, if the principal broker consents in writing

Section 61-2f-401(25) makes it grounds for disciplinary action for "a sales agent or associate broker, placing a lien on real property for an unpaid commission or other compensation related to real estate brokerage services." Subsection (24) covers the other tier: a principal broker may not place a lien on real property "unless authorized by law." Neither ground bends for the timing of the recording, for the broker's consent, or for a clause in the listing agreement. The dispute has its own channel: Section 61-2f-409(2) provides that a sales agent or associate broker may not sue in that individual's own name for a commission unless the action is against the affiliated principal broker.

Utah Code Section 61-2f-402 sets when the division must begin an adjudicative proceeding. As a general rule it must commence no later than the earlier of:

• a.Two years after the violation is reported, or the end of records retention✓
• b.One year after the violation is reported, or the closing of the deal
• c.Six years after the violation occurs, or the day the licensee retires
• d.Four years after the violation occurs, or the day the license is renewed

Section 61-2f-402(5)(a) requires the division to commence an adjudicative proceeding "no later than the earlier of the following: (i) two years after the day on which the violation is reported to the division; or (ii) the day on which the brokerage is no longer required to keep and maintain the records as provided in Section 61-2f-309," which is three calendar years after the year the transaction closes or fails. Subsection (5)(b) allows two extensions: a proceeding responding to a civil or criminal judgment or settlement, brought within one year of it, and a written stipulation between the division and the person. Subsection (5)(c) tolls the period while the division enforces a subpoena. Neither the expiration of a license nor a licensee's retirement ends exposure, because Section 61-2f-404(1)(e) keeps a formerly licensed person answerable for acts committed while licensed.

The Utah division director serves a cease and desist order. Under Utah Code Section 61-2f-407 the person served may request a hearing within 10 days, and pending that hearing the order:

• a.Remains in effect while the request is pending✓
• b.Is stayed until the commission rules on the request
• c.Applies only to conduct in the county where it was served
• d.Expires unless a court confirms it within 30 days

Section 61-2f-407(1)(b) gives the person 10 days after service to request a hearing, and Subsection (1)(c) settles the effect: "pending a hearing requested under Subsection (1)(b), a cease and desist order shall remain in effect." A request does not stay it, no court confirmation is needed, and the order is not limited by county. Subsection (2)(a) provides that after the hearing, if the commission and the director agree that the conduct violates the chapter, the director shall make the order permanent and may impose another sanction under Section 61-2f-404. Rule R162-2f-407(1) adds that an adjudicative proceeding conducted after a cease and desist order is issued shall be a formal adjudicative proceeding.

Utah Code Section 61-2f-404 raises the civil penalty ceiling for each violation where the person knew or should have known that the property owner was:

• a.A person whose primary language is not English
• b.65 years old or older, or a vulnerable adult✓
• c.A member of the armed forces on active duty
• d.A first-time buyer purchasing a primary residence

Section 61-2f-404(1)(a)(ii) lets the commission, with the director's concurrence, impose a civil penalty not to exceed the greater of $5,000 for each violation; "$10,000 for each violation, if the person knew or should have known that the property owner was an individual 65 years old or older, or a vulnerable adult"; or the amount of any gain or economic benefit derived from the violation. The same circumstance reappears in Subsection (1)(b)(vi) as a factor the commission must weigh in choosing a sanction. Section 61-2f-102(44) defines vulnerable adult by reference to Section 26B-6-201. The three other characteristics may matter under fair housing law, but they do not lift the ceiling under this section.

Utah Code Section 61-2f-404 says an order, ruling, or decision of the division takes effect and becomes operative, unless the order provides otherwise:

• a.30 days after the service of the order, ruling, or decision✓
• b.10 days after the division serves the order, ruling, or decision
• c.Immediately upon the vote of the Real Estate Commission
• d.On the first day of the month following the decision

Section 61-2f-404(2)(c)(i) provides that "an order, ruling, or decision of the division shall take effect and become operative 30 days after the service of the order, ruling, or decision unless otherwise provided in the order." Subsection (2)(c)(ii) lets the division stay enforcement under Section 63G-4-405 if a licensee, registrant, or certificate holder appeals, and Subsection (2)(c)(iii) puts appeals under the Utah Rules of Appellate Procedure. Subsection (2)(a) gives an applicant, certificate holder, licensee, registrant, or person aggrieved, including the complainant, the right to agency review by the executive director and to judicial review. Subsection (2)(b) lets a court award reasonable litigation expenses where the state acted without substantial justification.

Utah Code Section 61-2f-409 restricts actions to recover a commission. An action for a fee earned by a sales agent may be brought only by:

• a.The seller, on behalf of the sales agent who found the buyer
• b.The brokerage entity, whether or not it has a principal broker
• c.The sales agent, in the county where the property sits
• d.The principal broker with whom the sales agent is affiliated✓

Section 61-2f-409(2)(b) provides that "an action for the recovery of a fee, commission, or other compensation may only be instituted and brought by the principal broker with whom a sales agent or associate broker is affiliated," and Subsection (2)(a) bars the sales agent or associate broker from suing in that individual's own name unless the defendant is the affiliated principal broker. Subsection (1)(b) lists who may bring such an action at all: a principal broker, an individual who was licensed as a principal broker when the service was performed, or an entity that division records show is affiliated with a principal broker, which is why an entity without one does not qualify. Subsection (1)(a) closes the door entirely where the act or service was prohibited under the chapter.

Under Utah's Statute of Frauds, an agreement employing a broker to buy or sell real estate for compensation is:

• a.Void unless written and signed by the party to be charged✓
• b.Void unless recorded with the county recorder before closing
• c.Enforceable if a notary attests the parties' signatures
• d.Enforceable if the broker performs, whether written or oral

Utah Code Section 25-5-4(1)(e) lists among the agreements that "are void unless the agreement, or some note or memorandum of the agreement, is in writing, signed by the party to be charged with the agreement" every agreement "authorizing or employing an agent or broker to purchase or sell real estate for compensation." Section 25-5-3 does the same for a contract for the sale of land or a lease longer than a year, and Section 25-5-1 requires a writing subscribed by the party for any estate or interest in real property other than a lease not exceeding one year. Utah's word is void, not merely unenforceable, so performance does not cure the missing writing. Notarization goes to proof of a signature, and recording gives public notice under Title 57, Chapter 3; neither substitutes for the signed writing itself.