H.B. 377 Real Estate Amendments

What this bill does

H.B. 377 would bring back the dual broker license, which lets a residential brokerage also run a property-management-only company, and would limit the property manager license to residential property. It would also set rules for trust accounts, earnest money, and document retention, repeal the 30% security bond requirement added in 2025, and direct a report from the Department of Commerce to the legislature.

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Every vote

• 9 yes, 0 no, 7 absentHouse Business, Labor, and Commerce Committee: vote to change the bill · Feb 17, 2026Who voted how
• 10 yes, 0 no, 6 absentHouse Business, Labor, and Commerce Committee: vote to approve it · Feb 17, 2026Who voted how
• 67 yes, 1 no, 7 absentFinal House vote · Feb 23, 2026Who voted how
• 6 yes, 0 no, 2 absentSenate Business and Labor Committee: Amendment Recommendation · Feb 27, 2026Who voted how
• 6 yes, 0 no, 2 absentSenate Business and Labor Committee: vote to approve it · Feb 27, 2026Who voted how
• 25 yes, 0 no, 4 absentFinal Senate vote · Mar 6, 2026Who voted how
• 53 yes, 13 no, 9 absentHouse vote to accept the other chamber's changes · Mar 6, 2026

Hearings and debates

• Feb 12, 2026 House Business, Labor, and Commerce Committee
• Feb 17, 2026 House Business, Labor, and Commerce Committee▶ Watch
  Transcript (29 turns)

  1. Rep. R. Neil Walter32:09

     Good morning, Mr. Chair. I am ready. And thank you for, uh, uh, giving me a few minutes this morning. I'm here to speak about, uh, house Bill 3 77 real estate amendments. I'm just gonna note there is a confusing aspect here. Last year there was a, there was a property management bill. This is also a property management bill. It was 3 37, last year was 3 37. This one's 3 77. So, uh, last year's bill is really important. Is this the, is this the same? This isn't the same bill, is it? It is a very, it is a, it is the fix to last year's bill. So, let me explain. Last year's. I'm gonna explain what happened with last year's bill, and then I'll explain why this bill is a fix to last year's bill. Okay. So, and sorry, uh, we, you do have a sub? Yes. And we'll be, I'll be speaking to the first substitute. Okay, great. Thank you. So thank you for that. When we get to the action items, so last year in 2025, general session, we passed House Bill 3 37. That bill did a few, did a few specific things. It created a new property manager license. Um, it also eliminated a specific type of license that's used by a couple of hundred, um, existing brokers called a dual broker. That gives the ability to, for somebody to have a reg regular, um, residential brokerage and simultaneously operate a property management only company. It eliminated that license. It required because of, uh, because of two amendments that were adopted in the Senate, and then they were dropped. They were technical drops. It required existing licensees more than a, we think a couple of thousand existing licensees to have to get a second license. And, um, there were no limits or restrictions on what the definition for property management activities were. So what we did in the special session, uh, this fall was we put a, we, we did one very minor thing. We fixed the requirement that required existing real estate licensees to get a second license to, to participate in property management activities. That was a technical error from the last session. We fixed that, but we didn't want to address any of the policy underlying policy issues. So we didn't address any of the other issues that were remaining outstanding, that were outstanding in the bill or in the legislation. So really since the special session, the September special session, I've been working with the, uh, apartment association, um, the, uh, Institute for Real Estate Management, which is a commercial real estate association and building an office managers association. That's another commercial real estate association, the Utah Association of Realtors in the Division of Real Estate to try and figure out how to land this property manager license properly. And, uh, we've been working really close. We've been working closely for an, for a number of months to do that. So lemme explain then, what house bill, uh, 3 77 does it reinstates the dual broker license so that those individuals that are operating in that capacity won't have to shut down their, their brokerages that are operating under a long standing, um, license provision. Uh, that, that really, uh, probably was an oversight that we, that we, uh, struck the dual broker provision. It clarifies what the property manager's role is, and it specifies that in this property management license, um, it's limited to property, it's limited to residential property management only. Let me give you an example. Technically, if you want to do property management activities, um, not just, not just collecting money and taking care of a property that's obvious, a property management activity. But under the licensing law, leasing is a property management activity. So if you go negotiate a lease on a 250,000 square foot industrial facility in the west side of the valley here, technically that's a property management activity under the way that it's defined. So we limited to, we limited the property manager license, which is this, um, uh, reduced education, reduced, um, uh, regulatory burden license. We reduced it to residential activities only. Okay. Um, we clarified some of the rules around document retention and definitions so that it would be clear about what, what the requirements are for producing and providing documents to the division in the event that they have, you know, questions about, uh, particular transaction or wanna do investigation. Um, it clarifies, which is, it's, there's already a, there's already a longstanding practice, particularly in the large apartment users and within the commercial real estate, um, for particular uses of, uh, trust account, um, holding, holding funds and trust accounts. And so it clarifies when earnest money may be held outside of a real estate trust account. And then it also clarifies, um, that the division is to, is assigned to investigate real estate, uh, license violations. So anyway, that's a summary of what we're doing with the bill, and I'm open to questions from the committee. Thank you, Mr. Chair.

  2. Committee chair37:29

     Great. Thank you. Okay, we'll bring it to the committee for clarifying questions, Representative Burton.

  3. Rep. Burton37:40

     Thanks, Mr. Chair, and thanks for bringing the bill. Uh, Representative Walter, the, the question that I have is for commercial properties, then the property manager is the broker.

  4. Rep. R. Neil Walter37:51

     It still requires a principal broker. Yes. Thank you. Great.

  5. Committee chair37:58

     Thank you, Representative Ivory.

  6. Rep. Ken Ivory38:01

     Thank you, Mr. Chair. Uh, just looking at, uh, lines 9 88 to 9 94 in the sub on the trust account issue. Yes. I, I'm curious, why, why would we not want those funds to be kept in a trust account? What are the circumstances when you wouldn't want those kinds of funds kept in a trust account?

  7. Rep. R. Neil Walter38:21

     So the answer is in most states, um, it's not a requirement. In most states, it's already authorized, um, for funds to be held outside of a trust account if it's, uh, agreed to by the parties in the transaction. But let me give you a simple example in a context of a real estate transaction that I think makes a lot of sense for folks. Uh, we'll, we can talk about that separate from just a property management transaction. In a real estate transaction. When you are, um, um, when you're, for example, buying a home and there's an earnest money deposit made historically, and I'm not, and I, and I mean very, very long in history that money was most often held by a principal broker at the real estate brokerage. Um, over time. And because of different practices in different states, um, it's become, uh, common, I wouldn't say it's the majority of the time, but it's become common for that money to be held by a, um, it's been to be held by a title company. Um, it might be technically it could be held by an attorney. There's lots of different ways to held that. In fact, um, contractually, the parties could agree to any number of things. Um, for example, earnest money, which could be held in trust, doesn't actually have to be dollars. It could be a gold coin, for example, Representative Ivory. And you could agree to which of the parties would hold the gold coin as earnest money during that, during that period of due diligence. Um, in the, um, in the context of, uh, commercial real estate, and particularly with the large apartment users, there's certain times when large institutional users would have interesting requirements. I'll give you an example. Um, the state of Utah might, if they were, uh, had, if they had hired somebody to manage properties, uh, uh, for them, for example, TLA has properties that generate cash flow and have tenants. They might want that money held in an account that they can monitor and have access to. And so there are reasons why, um, although in a normal transaction, the real estate trust account is the proper tool, there are exceptions and reasons why you might want to, uh, consider, um, alternatives. And again, it's, it's been the practice for, um, in many other states. And, and right now there is an exemption, um, that is, uh, a little bit unclear in administrative rule. And so we're trying to, uh, make it clear what is authorized and what is not authorized in the context of the, uh, trust accounts.

  8. Rep. Ken Ivory40:52

     Thank you. If I may, just a, a follow up on line 9 86, it seems to take away the provision of a security bond. So have, have, are we taking away the security bond requirement that if someone's holding funds as a property manager, that there's not any kind of a security or help me understand that part of that?

  9. Rep. R. Neil Walter41:15

     So last year, that provision was added, and unfortunately, that product doesn't actually exist. So it was an idea that was thought could be helpful, but after the session, it was learned that this security bond that was being proposed in lines 9 85 to 9 88, that was part of last year's legislation, that financial product does not actually exist. Nobody can sec, nobody can acquire that security bond.

  10. Rep. Ken Ivory41:49

      Okay. Okay. Great.

  11. Committee chair41:53

      Thank you. I don't see any other lights. So we'll turn it over to the public. Is there anybody from the public that would like to speak to this? Okay, come on up. Okay. We have one person online, so we're gonna go in here online and then back into here. Go ahead, sir. Perfect.

  12. Gavin Gilbert, Utah Association of Realtors42:18

      Thank you, Mr. Chair Gavin Gilbert. I'm speaking today on behalf of the Utah Association of Realtors. Um, first one, I think the sponsor for bringing this, this bill forward and for working with industry so closely, but we're, we're support of this bill. We think it, it strikes a good balance and, and helps, um, solidify this policy as a good policy. Thank you.

  13. Committee chair42:38

      Thank you, sir. Okay. Let's go online. Tom Mills, soon as we see you, you, you can go ahead and get started.

  14. Tom Mills42:54

      Hello? Can you hear me? Yes, go ahead. Thank you. Yes. Uh, my name is Tom Mills, uh, with Apple and Glow Energy. And, um, as part of the solar industry in Utah, uh, we support any bill that would, would help the speeding up of the permitting process and reducing permitting fees for, for solar projects. Um, the, the reality is, is that, uh, it, it, it's usually a cookie cutter permit, um, which is all structured by the National Electric Code. And where what we're seeing is, uh, uh, am I speaking on behalf of the, the, the proper bill? Sorry, I'll, I'll come back.

  15. Committee chair43:50

      Yeah. Okay. Thank you. Go ahead.

  16. Justin Allen, Rental Housing Association of Utah43:54

      Hi, Mr. Chair. Justin Allen on behalf of the Rental Housing Association of Utah, formerly known as the Utah Apartment Association. And, uh, we wanna thank, uh, Representative Walter for his work on this bill. This is, um, as has been mentioned, uh, part of the ongoing process to put this residential property management license into effect. Um, we appreciate the chance that we've had to work with the Division of Real Estate and Representative Walter. We are excited about this license. We think it'll be a great thing to help train, uh, residential property managers to do, uh, a, a good job for the public. And, uh, appreciate, um, you all, uh, uh, hopefully we'll support the bill and move it through the process. Thank you.

  17. Committee chair44:37

      Great. Thank you. Okay. Anybody else? Alright, uh, we are gonna close public comment and bring it back to the committee for further discussion And action. I'll remind the committee that we do have a sub that needs to be adopted. Representative Burton, Mr. Chair, motion to adopt first sub house bill? Three seven. Okay, great. The motion is to, uh,

  18. Rep. Burton45:03

      would you like to speak to that?

  19. Committee chair45:05

      No. Okay. The motion is to adopt first substitute HB 3 77 Real Estate amendments. Uh, any discussion to that motion Representative Dunnigan?

  20. Rep. James A. Dunnigan45:22

      No. Okay.

  21. Committee chair45:27

      Seeing now we'll go to the sponsor. I'll waive back to the maker of the motion waive. Okay. We will take a voice vote. All in favor of adopting or moving or adopting the substitute for HB 3 77. Say aye. Aye. Aye. Any opposed? Okay. The sub is adopted. Now we'll go to Representative Dunnigan. Thank you Mr.

  22. Rep. James A. Dunnigan45:54

      Chair. I move to favorably. Recommend first substitute house bill 3 7 7.

  23. Committee chair45:58

      Would you like to speak to that?

  24. Rep. James A. Dunnigan45:59

      I, I think the sponsor's done, done some good work on.

  25. Committee chair46:02

      I appreciate his cleanup. Great. Thank you. Okay. The motion is to, uh, move with a favorable recommendation. First substitute HB 3 77 Real Estate Amendments. Any discussion to the motion? Seeing none, we'll go to the sponsor.

  26. Rep. R. Neil Walter46:18

      I appreciate the opportunity to, to visit with the committee. Um, this was, uh, again, a policy that we spent a lot of time on last year. Um, it needed some corrections, but it needed to happen during the general session, not the special session. And so I appreciate the time from the committee this morning.

  27. Committee chair46:32

      Great. Thank you. Can we go back to the record of motion? Wait. Okay. So the motion is to, uh, move with a favorable recommendation. HB 3 77, first substitute real estate amendments. Uh, will take your voice vote. All in favor say aye. Aye. Any opposed? Aye. Okay. The, uh, bill passes unanimously.

  28. Rep. R. Neil Walter46:55

      Thank you, Mr. Chair. Thank you to the members of the committee.

  29. Committee chair46:57

      Thank you, representative.

• Feb 23, 2026 House floor debate▶ Watch
  Transcript (5 turns)

  1. Speaker (presiding)37:31

     First substitute house Bill 3 77 Real estate amendments by Representative Walter. This bill was heard in business and labor with the vote. 10 0 6

  2. Rep. R. Neil Walter37:41

     Representative Walter, Uh, thank you Mr. Speaker. Um, I appreciate the opportunity to discuss House Bill, uh, 3 77 today. Um, I'm gonna provide a little bit of background and I'll just, uh, uh, note for the members of the body, there is a substitute online, but, uh, in my name, but we're not gonna adopt the substitute today. Um, house Bill 3 77 started actually last year with House Bill 3 37. Yeah, we're not, we don't need to adopt this substitute. Thank you, Mr. Speaker. Um, house Bill 3 77 started last year with House Bill 3 37, which created the role of a property manager in the division of real estate. So we've historically had a number of licenses, a principal broker, a um, associate broker, a sales agent, and a dual broker. Those licenses existed for many, many years. And, uh, uh, last year we created a new license. Uh, this license is called a property manager license. It's a limited use license that would, uh, restrict the activities of a licensee to certain property management activities. Um, there was a issue where two amendments were made during the process last year. They were dropped. Uh, it was a technical error. And so we revisited this bill very briefly in the interim SEC session to solve one very particular problem. Uh, the problem, uh, would've required, uh, two to 3000 existing licensees to get a second license. Okay? So we fixed that problem in interim, uh, sorry, uh, during a, during the special session rather. And, uh, you, you might have remembered that conversation. Uh, at the time we said we weren't going to a deal with some of the underlying policy items and, and left those for the general session, which is where we are now. So there's a couple of specific things that we're addressing in this bill. The first one is that the property manager, uh, license is restrict restricted specifically to the practice of, uh, residential property management. Uh, the reason why is because technically leasing under the original definition could be considered a, uh, property management activity. So if somebody went into, uh, Salt Lake, uh, the Salt Lake Valley here, and they were to lease a, uh, 250,000 square foot industrial facility, uh, that really is the practice of real estate. That might be a 10 or a $20 million transaction that was technically authorized under this limited use license in the previous version from last year. So we're narrowing the scope to just the, uh, just the property management, uh, activities that relate to residential real estate. That's the first thing. The second thing that we're doing is we're providing some, uh, uh, we're restoring a particular form of license that was struck from the old code. So there's a form of license called a dual broker. A dual broker is a broker who has the, uh, ability to operate a business as a, uh, in a traditional real estate brokerage context, but then have a property management only company separately. It's the only context in which the division has historically authorized. Uh, there to be, uh, a broker, one broker for two different companies that was taken out of last year's bill, it would've created, created a significant disruption for a couple of hundred, uh, operating or com operating, uh, companies in the state of Utah. And so we put the dual broker back, which essentially because it didn't get a, the, the implementation date hadn't arrived, we technically, they didn't, they didn't go away. We're just making sure that, so that they don't have to, uh, lose that dual broker option. The third thing that we're doing in this bill is we're, uh, uh, dealing with some specific things that relate to, um, the way that, uh, uh, uh, trust accounts work. There's some longstanding practices that have been an administrative rule, and we're putting those administrative rule provisions in statute. So, um, when you are, uh, uh, just making sure that the, the practice that's been around for a long time in in the apartment association in the commercial Real Estate Association for handling security deposits is, uh, clarified. And then there's a document retention policy that we also clarified where, again, in administrative rule, there were some guy, there were some, there were some rules around what documents had to be, uh, held by the, uh, brokerage and for how long. Um, we, uh, brought that also into statute and provided some clarifications there. The final thing we did in this bill is, uh, there are sometimes some confusion about whether a particular licensees activities, whether that violation goes to the Department of Commerce, uh, under consumer protection or whether it goes to the Department of Commerce under the real estate division. And so we clarified when a particular, um, violation of licensing law or a particular, uh, consumer complaint would go to the division of real estate. Um, Mr. Speaker, with that, I'll, uh, happily entertain any questions from the body.

  3. Speaker (presiding)42:43

     Thank you Representative Walter. Discussion to the bill Being none, Representative Walter for summation.

  4. Rep. R. Neil Walter42:52

     I'll waive. Thank you, Mr. Speaker Summation is waived.

  5. Speaker (presiding)42:54

     Voting is open on first substitute house bill three estate amendments, seeing all present, having voted, voting will be closed First substitute house bill 3 77, having received 67 na votes and one na vote passes the house and will be transmitted to the Senate for its consideration.

• Feb 27, 2026 Senate Business and Labor Committee▶ Watch
• Mar 6, 2026 Senate floor debate▶ Watch
  Transcript (9 turns)

  1. Presiding officer3:07:00

     Thank you. We have a motion to substitute.

  2. Sen. Calvin R. Musselman3:07:02

     Do we have, do we wanna explain the substitute? Yeah. Really quickly, I apologize. Um, lemme click on that. It just requires a report from the, uh, department of Commerce to, um, the legislature after a certain period of time after August 31st.

  3. Presiding officer3:07:25

     Thank you. Do we have discussion? Say none. I'll place the motion. All in favor of the motion to substitute substitute three. And Senator Musselman's name say aye. Aye. Any opposed? Rule motion passes. The bill is substitute and out of the bill. Senator,

  4. Sen. Calvin R. Musselman3:07:41

     Uh, Mr. President. A year ago we had bifurcated or allowed the bifurcation of the real estate licenses for property management under certain circumstances, and this is to clean up some of the language, uh, some of the issues that we've had since that time. It delays the mandatory information date for early established property matters to January 1st, 2027. It strictly limits the scope of the property manager license to the management of residential rental units and repeals 30% security bond requirement. It allows property manager to operate without a separate trust account if ex explicitly agreed upon both to the property manager management agreement and the tenant lease agreement and mandates the creation of licensing rules for the dual broker who may engage in the property management without uh, needing to obtain a separate property management license. That's my presentation. Thank you.

  5. Presiding officer3:08:27

     Discussion to the bill. Senator I say no discussion of the bill. I'm gonna go to you for a motion

  6. Unknown speaker3:08:36speaker not certain

     Call. The question Mr. President Question is Under suspension of the rules shall third substitute house Bill three seventy seven pass Roll call vote.

  7. Senate clerk3:08:43

     Senator Baldy Lewin Bramer. Bus, bus Comore Escamia Fillmore Grover Harper Kinins, IPSON Johnson, Quan McKay, Mikel Milner Aye. Musman Owens Pitcher Lum Rebi Sandal Stevenson Stratton Stratton Vickers Weiler Wilson Aye. Winterton Aye. President Adams Aye.

  8. Presiding officer3:09:36

     Third substitute house Bill 3 77. Having received 25 yay votes, zero na votes four being absent passes his body and will be returned to the house for further consideration.

  9. Presiding officer3:09:47

     Senator McKay? Thank

• Mar 6, 2026 House floor debate▶ Watch
  Transcript (5 turns)

  1. Speaker (presiding)3:19:06

     Substitute House Bill 3 77 Real Estate Amendments by Representative Walter. Representative Walter.

  2. Rep. R. Neil Walter3:19:14

     Thank you Mr. Speaker. I move that we concur with as Senate amendments.

  3. Speaker (presiding)3:19:18

     Thank you Representative. That motion is in order. Uh, that motion is in order. Would you like to speak to it?

  4. Rep. R. Neil Walter3:19:26

     Yes. Uh, the amendments clarified when there is a consumer complaint regarding a real estate licensees activity. When that, uh, particular activity there, that particular complaint would be handled by the Division of Real Estate instead of the Department of the Division of Consumer Protection.

  5. Speaker (presiding)3:19:47

     Thank you Representative Walter. Uh, discussion to the motion to concur with Senate Amendments Representative C None will place that motion. Uh, motion is the House Concur with Senate amendments on third 60 HB 3 77. All in favor say aye. Aye. Any opposed? Without motion passes Voting will now be open for final passage on third subject HB 3 77 oh. Let's vote quickly. Being all present having voted, voting is now closed. Third substitute HB 3 77 passes his body. 53 Yes Votes. 13 No votes will be sent to the Senate for the signature, the President. Let's go to Madam Marine Clerk for communications from the Senate.