Legal Library

Division Of Real Estate Newsletter – Fourth Quarter 2019

October 1, 2019


RAP Back: New Law Effective January 2020 requiring licensees to be fingerprinted upon license renewal (Ethics): The first few pages outline some of the requirements coming along with this law like who must be fingerprinted, why this is a new requirement, what the cost might be, when and where agents are able to get fingerprinted, etc. The law is H.B. 140 from the 2019 Legislative Session. (See 1Q 2019 newsletter for more details).

The Great Inspection Addendum Disappearance Act by Laurel North — Real Estate Investigator(REPC – addenda): Pages 8 & 9 of this issue talk about how many contract files seem to be lacking inspection addenda. This could be attributed to other agreements between buyers and sellers. However, these agreements, or addenda if it is being used, must be included in the entire purchase contract and put on file with the rest of the transaction. Otherwise, rule R162-2f-401b (4) (a) and possibly also R162-2f-401b (6) could be violated. It suggests either using the UAR Resolution of Due Diligence Addendum (if you are a REALTOR®), or the State Approved Blank addendum (as long as you’re careful not to tread into water which could hold you liable for writing a contract as an unlicensed attorney).

Where’d You Get Those Stats? by Laurel North — Real Estate Investigator(Advertising, Ethics): Pages 9 & 10 talk about how complaints have been filed regarding the use of questionable statistics. If a complaint is filed, and the Division’s investigations discover false, inaccurate, or misleading statistics being used by an agent in a way that is likely to influence, persuade or induce a customer to use their services, violations of rules 61-2f-401 (1a), (1b), (1c), (1d), and (1e), and (13) could be possible. Also, a couple of resources that often provide reliable and verifiable statistics are supplied, along with a tip to always provide the source and author of your information.

Page 24: Kagie’s Korner – Broker’s responsibilities to their agents: Dear Brokers…. When the Division presents a case to the Real Estate Commission for disciplinary action of a sales agent, whether in a stipulation or a hearing, often, a commissioner will ask, “What are we doing with the principal broker?” Commissioners have indicated that they would like to see more responsibility and accountability with the broker for violations by their affiliated licensees. The statute and rules that pertain to broker supervision are: §61-2f-401. Grounds for disciplinary action. (14) in the case of a principal broker or a branch broker, failing to exercise reasonable supervision over the activities of the principal broker’s or branch broker’s licensed or unlicensed staff. R162-2f-401c(1) A principal broker shall: (f) exercise active supervision over the conduct of all licensees and unlicensed staff employed by or affiliated with the principal broker, whether acting as:  (i) the principal broker for an entity; or  (ii) a branch broker;

Principal and branch brokers: Are you knowledgeable regarding the statutes and rules? Are you keeping up with changes to statutes and rules? How are you educating your affiliated licensees and unlicensed staff on the requirements found in the statutes and rules? Are you available to your affiliated licensees for questions or to mediate client concerns?     Do you have policies and procedures in place to

ensure that your brokerage, including all affiliated licensees, is functioning within the requirements of the statutes and rules? These are just some of the responsibilities of brokers. Protect yourself by educating yourself and your affiliated licensees and establishing and following policies and procedures for your brokerage. When agents call the Division about a situation, one of the first questions Division staff members ask is, “Have you spoken with your broker about this?” Almost always, the answer is no. Technically, in many cases, if a sales agent is in violation, the principal or branch broker could be as well.  Sometimes the Division receives calls that seem to indicate that brokers are referencing old statutes or rules that were renumbered in 2010. If you haven’t reviewed a copy of statutes and rules since 2010 or later, you might want to review them again. You may find the statutes and rules on the Division’s website.  Statutes and rules are changing every year, stay current!


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