Subject: File No. s7-26-07
From: Derek B. Miller
Affiliation: Director, Utah Division of Real Estate

December 17, 2007

To Whom It May Concern:

The purpose of this email is to provide written comment, on behalf of the Utah Division of Real Estate, on File No. S7-26-07.

The Utah Division of Real Estate is a state regulatory agency over real estate professionals, as well as mortgage officers and real estate appraisers. Utah is also the only state that has specific state statutes governing the regulation of Tenant in Common (TIC) transactions. I emphasize the word "specific" because TIC's are a common form of real estate ownership and have been around for many years. These real estate transactions are typically regulated by state real estate divisions and real estate commissions.

The recent and rapid growth in securitized TIC transactions (spurred by IRS Revenue Procedure 2002-22 and increase in 1031 exchanges) has created regulatory challenges between securities and real estate regulators. In Utah, these challenges led to a modification to state statute with the intent to clarify when a TIC is securitized and when it is purely real estate. As the Division Director, it is my intent to have the state statute modified further based on the SEC's decision regarding the pending exemption request. Specifically, the modified statute would recognize that where a TIC is a security as defined under federal law, it will be recognized as such under Utah law and will be under the jurisdiction of the State Securities Division as to securities laws. These "securitized TICs" will also be regulated as to the real estate aspects of the transaction under state real estate laws.

I also want to express my support for the definition of "substantial commercial real estate experience" in NAR's request. This definition is a more than adequate benchmark for commercial real estate professionals to advise on TIC securities, while also permitting some discretion for agents with lesser experience to work directly with professionals who meet the "substantial" criteria.

Because of the number of TIC transactions and the confusion as to whether TICs should be regulated as a security or real estate, I urge the SEC to act quickly to grant the exemption request. An affirmative decision by the SEC will allow the states and the related industries to move forward in adopting legislation that will clarify the appropriate roles and responsibilities in how these transactions should be structured, conducted and regulated.


Derek B. Miller
Director, Utah Division of Real Estate