House committee adopts fix to property-manager licensing, narrows license to residential work

Representative Walter, the bill sponsor, told the House Business and Labor Committee that House Bill 377 is intended as a technical correction to legislation enacted last year and ‘‘It reinstates the dual broker license’’ to avoid forcing existing brokers to shut down longstanding brokerages. He said the measure narrows the new property-manager license to ‘‘residential activities only’’ and clarifies rules on document retention and when earnest-money funds may be held outside a real-estate trust account.

Industry witnesses told the committee they support the changes. Gavin Gilbert of the Utah Association of Realtors said, ‘‘We think it strikes a good balance and helps, solidify this policy as good policy.’’ Justin Allen of the Rental Housing Association said the organization ‘‘is excited about this license’’ and that it will help train residential property managers.

Committee members asked technical questions about the relationship between property managers and principal brokers, exceptions to trust-account requirements and an earlier provision that proposed a security bond. The sponsor said the security-bond financial product discussed in last year’s bill ‘‘does not actually exist’’ and that exemptions allowing funds to be held outside trust accounts are common in other states and sometimes requested by institutional owners.

The committee adopted the first substitute for HB377 by voice vote and then moved to report the substitute favorably to the next stage. Representative Dunnigan moved to favorably recommend the substitute; after a voice vote the committee approved the recommendation.

Next steps: The committee reported the first substitute for HB377 favorably; the bill will proceed through the legislative process for further consideration.