Montana Administrative Register Notice 24-210-38 No. 17   09/05/2013    
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In the matter of the amendment of ARM 24.210.426 and 24.210.805 trust account requirements, 24.210.430 internet advertising rules, and 24.210.601 general license administration requirements









TO: All Concerned Persons


            1. On April 11, 2013, the Board of Realty Regulation (board) published MAR Notice No. 24-210-38 regarding the public hearing on the proposed amendment of the above-stated rules, at page 508 of the 2013 Montana Administrative Register, Issue No. 7.


            2. On May 6, 2013, a public hearing was held on the proposed amendment of the above-stated rules in Helena. Several comments were received by the May 14, 2013, deadline.


            3. The board has thoroughly considered the comments received. A summary of the comments received and the board's responses are as follows:


COMMENT 1: Three commenters supported the proposed amendment to ARM 24.210.426(2), that clarifies that brokers will not be disciplined for negative trust account balances as a result of a deposit that was dishonored after the broker verified available funds.


REPSONSE 1: The board appreciates all comments made during the rulemaking process.


COMMENT 2: Two commenters expressed concern about moving the records retention language from ARM 24.210.426(5)(l) to ARM 24.210.601. The commenters stated that it is logical to locate all document retention requirements in one section and argued that retention of trust account documents should be within the trust account section, rather than the general licensing requirements rule.


RESPONSE 2: The board previously determined that moving the document retention requirements from ARM 24.210.426 to ARM 24.210.601 does clarify that all licensees are required to retain real estate transaction documents. Under current rules, it could be interpreted that only brokers who operate a trust account are required to retain the described real estate documents.

            The board notes that the language of the amendments is not limited merely to trust account records, but also speaks to "trust account records and related real estate documents, including sales contracts, leases, and options, agency agreements, closing statements, and other real estate related documents." Therefore, it is logical to have the language in the general license administration section and the board is amending these rules exactly as proposed.


COMMENT 3: Three commenters supported the proposed amendment to ARM 24.210.430(1).


RESPONSE 3: See Response 1.


COMMENT 4: Two commenters stated that licensees are confused as to the meaning of ARM 24.210.430(4)(c) and described the issues requiring clarification.


RESPONSE 4: The board is not proposing in this notice to amend any language in (4)(c), and the proposed changes merely reformat existing language for clarity and ease of use. The board may consider clarifying the language in (4)(c) in a future rules project.


COMMENT 5: Three commenters supported the direction of the board's proposed amendment of ARM 24.210.430(4)(e), but stated that the amended language is unclear as to what information the licensee is responsible for updating, and where it must be updated. The commenters asked if licensees should be responsible to only correct information on their own internet sites, or also correct information on third-party web sites. Commenters also suggested that the amendment could be interpreted to mean that the licensee is responsible for updating internet advertising, even if the licensee may not have anything to do with the misrepresentation.


RESPONSE 5: In this rule's reasonable necessity statement, the board clarified that the licensee would be responsible only for advertising content that the licensee can control. The board believes that the existing language, along with the proposed amendments, clearly provides that a licensee is only responsible for advertising that they can control. To the extent that the proposed language causes confusion, if any, the board believes that the confusion could be lessened by changing the disjunctive "or" to the conjunctive "and." The board concluded that such a revision is within the original intent of the rule change proposed by the board and is amending this rule accordingly.


COMMENT 6: Three commenters supported the proposed amendment to ARM 24.210.430(7).


RESPONSE 6: See Response 1.


COMMENT 7: Three commenters supported the proposed amendments to ARM 24.210.601, but stated that confusion exists among licensees as to what documents are required to be retained. The commenters suggested the board define or clarify how to meet the document retention requirement.


RESPONSE 7: The board is unable to further modify the proposed language in this rule package without exceeding the scope of the initial rule notice and violating public notice standards of the Montana Administrative Procedure Act. The board may consider the suggestions in a future rules project.


COMMENT 8: One commenter supported the proposed amendments to ARM 24.210.805.


RESPONSE 8: See Response 1.


            4. The board has amended ARM 24.210.426, 24.210.805, and 24.210.601 exactly as proposed.


            5. The board has amended ARM 24.210.430 with the following changes, stricken matter interlined, new matter underlined:


            24.210.430 INTERNET ADVERTISING RULES (1) through (4)(d) remain as proposed.

            (e) No licensee shall be responsible for errors or misrepresentations of others who reproduce or further disseminate the information concerning the licensee's listings, unless the licensee originated the error or misrepresentation, or and failed to update the information.

            (5) through (7) remain as proposed.



                                                                     BOARD OF REALTY REGULATION




/s/ DARCEE L. MOE                                 /s/ PAM BUCY

Darcee L. Moe                                           Pam Bucy, Commissioner

Rule Reviewer                                          DEPARTMENT OF LABOR AND INDUSTRY



            Certified to the Secretary of State August 26, 2013


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