4.2 License Law Violations & Discipline
Key Takeaways
- UDRE can investigate complaints, conduct hearings, and impose disciplinary actions
- Violations can result in license denial, suspension, revocation, or fines
- Common violations include misrepresentation, trust account violations, unlicensed activity, and agency violations
- Practicing without a license is a criminal offense in Utah
- Licensees have due process rights including notice and hearing before disciplinary action
Last updated: January 2026
UDRE has authority to investigate complaints and take disciplinary action against licensees who violate the Utah Real Estate Licensing and Practices Act.
Common Violations
Misrepresentation and Fraud
| Violation | Description |
|---|---|
| Material misrepresentation | False statements about important facts |
| Omission | Failing to disclose known material defects |
| Fraud | Intentional deception for personal gain |
| False advertising | Misleading marketing or claims |
Trust Account Violations
| Violation | Description |
|---|---|
| Commingling | Mixing client and broker funds |
| Conversion | Using client funds without authorization |
| Excessive broker funds | Depositing more than $500 of own funds |
| Poor records | Inadequate documentation or reconciliation |
| Failure to maintain separate accounts | PM and RE accounts not separated |
Agency and Disclosure Violations
| Violation | Description |
|---|---|
| Limited agency without consent | Acting for both parties without written consent |
| Undisclosed interest | Failing to disclose personal interest |
| Breach of fiduciary duty | Violating duties to clients |
| Improper disclosure timing | Not disclosing agency at proper time |
Unlicensed Activity
| Violation | Description |
|---|---|
| Practicing without license | Performing activities requiring a license |
| Practicing on expired license | Continuing to work after expiration |
| Paying unlicensed persons | Compensating unlicensed individuals for licensed activities |
Warning: Practicing real estate without a license is a criminal offense in Utah. UDRE has increased enforcement focus on unlicensed activity in 2025.
Broker Supervision Violations
| Violation | Description |
|---|---|
| Inadequate supervision | Failing to properly supervise affiliated agents |
| No written policies | Lacking required office policies |
| Improper record keeping | Not maintaining required records |
Disciplinary Process
Investigation
- Complaint filed with UDRE (or UDRE initiates investigation)
- Investigation conducted by UDRE staff
- Evidence gathered (documents, interviews, audits)
- Determination made whether to proceed
Hearing Process
If UDRE proceeds with disciplinary action:
| Step | Description |
|---|---|
| Notice | Licensee notified of charges |
| Hearing | Formal hearing before administrative law judge |
| Evidence | Both sides present evidence |
| Decision | Decision issued in writing |
| Appeal | Licensee may appeal to court |
Due Process Rights
Licensees have the right to:
- Notice of charges
- Hearing before adverse action
- Representation by attorney
- Present evidence and witnesses
- Appeal unfavorable decisions
Disciplinary Actions
UDRE may impose various sanctions:
| Action | Description |
|---|---|
| Denial | Refuse to issue license |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Reprimand | Formal warning |
| Fine | Monetary penalty |
| Probation | Conditional license with restrictions |
| Education | Required additional training |
| Cease and desist | Order to stop specific conduct |
Factors Considered
| Factor | Impact |
|---|---|
| Severity of violation | More serious = harsher penalty |
| Prior disciplinary history | Repeat violations = stricter |
| Harm to consumers | Consumer damage = more serious |
| Cooperation | Cooperation may reduce penalty |
| Rehabilitation | Remedial steps may help |
2025 Enforcement Priorities
UDRE has announced increased focus on:
| Priority | Description |
|---|---|
| Unlicensed activity | Individuals practicing without valid license |
| Trust account violations | Commingling, conversion, poor records |
| Poor broker oversight | Brokers not supervising affiliated agents |
Exam Tip: Stay current on UDRE enforcement priorities as they reflect areas of emphasis on the state exam.
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Test Your Knowledge
Which action is a criminal offense in Utah?
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Test Your Knowledge
What rights does a Utah licensee have before UDRE takes disciplinary action?
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Test Your Knowledge
Which of the following is a 2025 UDRE enforcement priority?
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Test Your Knowledge
Which disciplinary action can UDRE NOT impose?
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