Utah's real estate professionals are licensed by the Utah Division of Real Estate (DRE), which operates under the Utah Department of Commerce. If you're a real estate broker, appraiser, or mortgage lender in Salt Lake City, Cottonwood Heights, or anywhere else in the state of Utah, your license is issued and regulated by the DRE.
When you face disciplinary issues with your real estate license, it's important to understand the process, as well as your rights. The Lento Law Firm Team has experience with real estate licensing issues and can help you defend your Utah license. If your license is at risk, give us a call at 888-535-3686 or complete our contact form.
Utah's Real Estate Licensing Authority
In Utah, real estate licenses are issued and overseen by the Division of Real Estate, one of seven divisions under the Department of Commerce. DRE's mission is to protect the Utah buying public by promoting responsible business practices through regulating mortgage and real estate professionals in the state.
The DRE uses the following Utah laws to issue and regulate real estate licenses:
- Real Estate Licensing and Practices Act
- Real Estate Appraiser Licensing and Certification Act
- Appraisal Management Company Registration & Regulation Act
- Utah Residential Mortgage Practices & Licensing Act
- Timeshare and Camp Resort Act
- Utah Uniform Land Sales Practices Act
Utah real estate professionals are expected to familiarize themselves with all regulations as a condition of holding a license in the state. Failure to comply with all regulations could result in disciplinary action, up to and including loss of license.
Common Disciplinary Issues in Utah
Utah code clearly outlines grounds for disciplinary action for real estate license holders in the state. Whether you're showing homes in Provo or working as an appraiser in Moab, you can lose your license for violating state real estate regulations. Grounds for disciplinary action in Utah include:
- Practicing without a license: It is unlawful to represent yourself as a broker, assistant broker, sales agent, or other real estate professional without holding a Utah real estate license.
- Dishonest dealings: The DRE prioritizes public safety in regulating real estate professionals. For that reason, fraud and misrepresentation in real estate dealings are considered serious infractions.
- Failure to disclose: Licensed professionals are expected to be honest in dealings with the DRE, a real estate buyer, or a real estate seller. This includes being up front with the DRE about criminal history and with buyers and sellers about conflicts of interest.
- Mismanagement of funds: Real estate professionals hold great responsibility for trust money provided to them when a contract is placed. Commingling, misappropriation, or misuse of those funds is considered a violation.
- Noncompliance with continuing education requirements: License holders must complete at least 18 hours of continuing education every two years to qualify for renewal.
Real Estate Licensing Complaints in Utah
Most Utah licensing actions start with a complaint. Anyone can file a complaint online, providing only the information they're comfortable submitting. The information included in the complaint will be shared with the subject of the complaint, as well as law enforcement and other organizations, when applicable.
Along with the complaint form, the complainant will also need to attach documentation relating to the alleged incident. All complaints are reviewed before being assigned to an investigator.
Utah's Real Estate License Investigations
DRE investigations start with a phone call from an investigator. This will be within 10 days of the investigation being opened, and it will primarily be an introductory call. You'll also get contact information so you can reach out with any questions you have. In some cases, the investigator will schedule an interview and ask for documentation.
At this point, you're entitled to a copy of the complaint, and you may be asked to submit a written statement responding to the allegations. You'll have 10 days to provide this response, as well as any documentation that's been requested.
Investigative Outcomes in Utah
After all information has been gathered, the investigator will go through everything and put together a report with an analysis of the evidence. The evidence will have been reviewed, looking for any vindicating, aggravating, and mitigating factors. What happens next depends on the investigator's decision.
- If no violations are found, the lead investigator will forward the report to the director, who will close the case. The investigator will notify both the complainant and the respondent that the case is closed.
- If violations are found, the chief investigator takes over the file, and the case will move forward.
When violations are found, the investigator will notify the respondent that the case is moving forward. The investigator will also compile a findings letter that details the results of the investigation. This letter will include recommended penalties. The respondent has 10 days to choose between two options:
- Settlement by Stipulation
- Hearing in front of the commission or board
Settlements and Hearings in Utah Real Estate
If the investigator determines a violation took place, you'll have two choices. One is to settle, but the settlement will need to be approved by the commission or board. If the settlement is accepted, you'll be notified in writing.
The second option is to appear in front of the commission or board at an upcoming meeting. You'll have the right to have legal counsel appear in your place. Both sides will have a chance to make a statement, and a written order will later be reviewed and approved before being sent to the respondent.
Disciplinary Action in Utah
Any real estate licensee in Utah may face disciplinary action for violations. Here are some possible penalties professionals might face:
- Educational requirements: A licensee may be required to attend remedial education. If issued, the board will attach a deadline by which the licensee must fulfill the requirement.
- Fines: Real estate professionals may be required to pay a maximum civil penalty of $5,000 or the amount of financial gain the professional enjoyed from the violation, whichever is greater.
- Probation: A professional's registration, license, or certification may be put on probation for a predetermined length of time.
- Suspension: A professional's registration, license, or certification may be suspended for a length of time.
- Revocation: A professional's registration, license, or certification may be permanently revoked.
- License denial: New licensees may be denied a license, while existing licensees may be denied renewal.
If a person fails to comply with any disciplinary action, more severe penalties may result, including license revocation.
Appraisers and Utah Licensing
The DRE also licenses real estate appraisers in Utah. Appraisers have their own set of requirements, some of which overlap with the regulations for real estate agents. Here are a few additional infractions that can lead to disciplinary action for appraisers:
- Confidentiality breaches: Appraisers have access to government documents. Violating the confidentiality of those documents can lead to disciplinary action.
- Bribery: Accepting money to arrive at a predetermined opinion is a violation.
- Dishonest dealings: Any other conduct that can be construed as dishonest dealing could land you in hot water with the DRE.
Mortgage Lenders and Real Estate Licensing
Mortgage lenders must follow state law in dealings with homebuyers in Utah. Fraud and deception are both common disciplinary issues, as is the case with other real estate professionals.
It's important to note that only residential, retail, and first mortgages are regulated by the DRE. Banks, credit unions, loan servicers, and second mortgages are regulated by the Utah Department of Financial Institutions.
Real Estate Licensing Appeals in Utah
In Utah, you have the right to appeal a real estate licensing decision, which will have you appearing in front of the commission. The division director will preside over the hearing and make the final decision. In some cases, the division may refer the licensee to an administrative law judge to hear the case.
At least 30 days before the hearing, the commission will send you a written notice via postal mail. This notice will include the date, time, and place for you to appear. The appeal decision will be final, so it's important to prepare carefully, bringing forward any documentation necessary to demonstrate why the original decision should be overturned.
Consequences of Disciplinary Action in Utah
Having your real estate license revoked in Utah can have far-reaching implications. Even after you pay all fines, attend mandated courses, or complete your suspension period, the disciplinary action can stay on your record, affecting:
- Inability to practice: Utah's real estate professionals need a license to work in the profession, which means losing your license, even temporarily, can impact your ability to earn a living. If you try to land work outside the industry, employers may have questions about your sudden pivot to another career, which means the disciplinary action may affect your overall employment prospects.
- Reputation damage: Disciplinary action against real estate licenses is public information in Utah. The DRE has a database of licensing and disciplinary action that includes all orders issued within the past 10 years. This means the damage to your record can hurt you beyond the real estate industry, possibly impacting future employment and personal relationships.
- Geographical mobility: No matter what disciplinary action you face, it could impact your ability to land work outside Utah. If you move, you'll need a license to work as a broker, mortgage lender, or property appraiser, and you'll have to disclose your disciplinary history.
- Legal consequences: If the alleged infraction was more serious, you could face civil lawsuits or criminal charges in addition to any action that was taken against your real estate license.
- Professional memberships: If you're a member of any local or national real estate organizations, disciplinary action may impact your membership eligibility.
Ideally, you'll be able to dispute the allegations and retain a squeaky-clean record. When that isn't possible, though, our Professional License Defense Team can work with you to try to reduce the impact of the charges.
Getting Your Real Estate License Reinstated
A Utah real estate license revocation isn't always permanent. In some cases, you'll be eligible for license reinstatement after a waiting period. The length of this waiting period will be specified in the final order.
Pay close attention to the waiting period if it's less than a year. Licensees whose licenses are inactive for more than a year must go through the process as a new applicant. That means you'll have to meet the same licensing requirements a complete newcomer to the industry would have.
Steps to Take When Your Utah Real Estate License Is in Jeopardy
Having your real estate license under investigation can lead to plenty of sleepless nights. But it can help to take a deep breath, as well as a step back, and understand that disciplinary action is not always the end result. Here are some steps to take to give yourself the best chance possible as you're disputing the allegations:
- Review the accusations: Gather as much information as you can from the investigator who reaches out to you. Then dig into Utah regulations to get a full grasp on how the allegations relate to the law. This will help you determine how you might (or might not) have violated the rules.
- Verify the complainant's identity: If possible, determine who filed the complaint and track down all documentation. This includes contracts, emails, and voicemails.
- Pay attention to deadlines: The DRE will set firm deadlines for submitting responses. Make sure you meet those deadlines to avoid worsening the situation.
- Consult the Lento Law Firm: Our Professional License Defense Team can review Utah case law and the allegations and walk you through each step of the process. We can craft responses and help you prepare for meetings and hearings to give you the best chance of minimizing penalties.
As stressful as a DRE investigation can be, with the right approach, you can get through the process. By working with the Lento Law Firm, you'll have guidance along the way, helping you know what to expect at each stage of the process.
How the Lento Law Firm Can Help
From Brigham City to Monticello, the DRE works to protect Utah's consumers from questionable real estate practices. However, for the state's professionals, disciplinary action can have serious consequences. You've worked hard to earn and keep your license, so it's important when questions arise that you tackle them professionally and proactively.
The Lento Law Firm Team understands the stress that disciplinary investigations can cause. If you're dealing with real estate licensing issues in Utah, give us a call at 888-535-3686 or fill out our contact form.
