Reference is to Printer's Date 03/03/16-S.
Amend the bill, as and if amended, by deleting all after the enacting words and inserting:
/ SECTION 1. Chapter 57, Title 40 of the 1976 Coded is amended to read:
Section 40-57-5.
Unless otherwise provided for in
this chapter, Article 1, Chapter 1, Title 40 applies to real
estate brokers, salesmen, and property managers; however, if
there is a conflict between this chapter and Article 1, Chapter
1, Title 40, the provisions of this chapter control.
Section 40-57-10.
There is created the South Carolina
Real Estate Commission under the administration of the
Department of Labor, Licensing and Regulation. The purpose of
this commission is to regulate the real estate industry so as to
protect the public's interest when involved in real estate
transactions.
Section 40-57-20.
It is unlawful for an individual to
act as a real estate broker, real estate salesman, or real
estate property manager or to advertise as such without a valid
license issued by the department.
Section 40-57-30.
For purposes of this chapter:
(1) "Associated
licensee" means a licensee who is affiliated with a
broker-in-charge or property manager-in-charge.
(2) "Branch
office" means a suboffice of a company in which
full-service real estate activities are conducted and at which a
broker-in-charge or property manager-in-charge is licensed to
conduct real estate transactions.
(3) "Broker"
means an individual who for a fee, salary, commission, or other
valuable consideration or who with the intent or expectation of
receiving compensation:
(a)
negotiates or attempts to negotiate the listing, sale, purchase,
exchange, lease, or other disposition of real estate or the
improvements thereon;
(b)
auctions or offers to auction real estate;
(c)
solicits a referral in order to conduct activities set forth in
this section;
(d)
offers advisory services as a real estate consultant or
counselor;
(e)
offers to act as an agent representing a principal in a real
estate transaction;
(f)
advertises or otherwise holds himself out to the public as being
engaged in any of the foregoing activities.
(4)
"Broker-in-charge" means the broker who is designated
as having responsibility over the actions of all associated
licensees and also has the responsibility and control over and
liability for any real estate trust accounts.
(5) "Client"
means a person with whom a licensee has established an agency
relationship.
(6) "Commission"
means the group of individuals charged by law with the
responsibility of licensing or otherwise regulating the practice
of real estate within the State of South Carolina.
(7) "Customer"
means a person with whom a licensee has not established an
agency relationship.
(8) "Department"
means the Department of Labor, Licensing and Regulation.
(9) "Licensee"
means an individual currently licensed under this chapter.
(10) "Office"
means the principal office location where a broker-in-charge or
a property manager-in-charge is licensed to conduct real estate
business.
(11) "Property
manager" means an individual who for a fee, salary,
commission, or other valuable consideration or who with the
intent or expectation of receiving compensation:
(a)
negotiates or attempts to negotiate the rental or leasing of
real estate or improvements thereon;
(b)
lists or offers to list and provide services in connection with
the leasing or rental of real estate or improvements
thereon;
(c)
advertises or otherwise holds himself out to the public as being
engaged in any of the foregoing activities.
(12) "Property
manager-in-charge" means the property manager who is
designated as having the responsibility over the actions of
associated property managers and also the responsibility and
control over and liability for real estate trust accounts.
(13) "Real
estate" means land, buildings, and other appurtenances,
including all interests in land, whether corporeal, incorporeal,
freehold, or nonfreehold, whether the real estate is situate in
or outside of this State.
(14) "Real estate
transaction" means an activity involving the sale,
purchase, exchange, or lease of real estate.
(15) "Salesman"
means a licensee associated with a broker-in-charge who, for
compensation, engages in or participates in an activity included
in item (3).
(16) "Trust
account" means an escrow account or properly designated
bank account established and maintained by a broker-in-charge or
a property manager-in-charge to safeguard funds belonging to
parties to a real estate transaction.
Section 40-57-40.
(A) The South Carolina Real Estate
Commission consists of ten members elected or appointed as
follows:
(1)
seven members who are professionally engaged in the active
practice of real estate, one elected from each of the seven
congressional districts by a majority of house members and
senators, representing the house and senate districts located
within each of the congressional districts;
(2)
two members representing the public who are not professionally
engaged in the practice of real estate, each appointed by the
Governor with the advice and consent of the Senate;
(3)
the nine elected and appointed members shall elect from the
State at large one additional member who must be in the active
practice of real estate.
(B) Commission members
serve a term of four years and until their successors are
elected or appointed and qualify. A vacancy on the commission
must be filled in the manner of the original election or
appointment for the remainder of the unexpired term.
(C) Before entering upon
the discharge of the duties of the office, a member's election
or appointment must be certified by and the member shall take
and file with the Secretary of State, in writing, an oath to
perform the duties of the office as a member of the commission
and to uphold the Constitutions of this State and the United
States.
(D) A member's term
commences on the date election or appointment is certified by
the Secretary of State.
(E) A member may be
removed from office in accordance with Section 1-3-240.
Section 40-57-50.
The commission annually shall elect
from its total membership a chairman, vice-chairman, and other
officers the commission determines necessary. The commission may
adopt an official seal and shall adopt rules and procedures
reasonably necessary for the performance of its duties and the
governance of its operations and proceedings.
Section 40-57-60.
The commission shall set general
policy with regard to administering and enforcing this chapter
and regulations promulgated under this chapter. Powers and
duties include, but are not limited to:
(1) determining the
standards for qualifications and eligibility of applicants for
licensure;
(2) conducting
disciplinary hearings on alleged violations of this chapter and
regulations promulgated under this chapter and deciding
disciplinary actions as provided in this chapter for those found
to be in violation;
(3) recommending changes
in legislation and promulgating regulations governing the real
estate industry relative to the protection of the safety and
welfare of the public;
(4) establishing a fee
schedule through regulation.
Section 40-57-65.
The commission shall submit to the
department an annual report in accordance with guidelines
established by the department.
Section 40-57-70.
(A) All fees relevant to the
licensure and regulation of real estate brokers, salesmen, and
property managers must be established in accordance with Section
40-1-50(D) and promulgated through regulation prior to
implementation.
(B) For each active
license and inactive license not renewed by its expiration date,
the department may assess a reinstatement penalty of twenty-five
dollars per month for each month or part of a month for a period
not to exceed six months during which the license may be
reinstated.
(C) All application and
license fees are payable to the department in advance and must
accompany an examination application or a license application.
Application fees are nonrefundable.
(D)(1) The department may
allocate up to ten dollars of each license renewal fee to the
South Carolina Real Estate Commission Education and Research
Fund which must be established as a separate and distinct
account within the office of the State Treasurer. The funds
collected must be deposited in this account and used exclusively
for:
(a)
the advancement of education and research for the benefit of
those licensed under this chapter and for the improvement and
increased efficiency of the real estate industry in this
State;
(b)
the analysis and evaluation of factors which affect the real
estate industry in this State; and
(c)
the dissemination of the results of the research.
(2)
The commission shall submit to the Chairmen of the House and
Senate Labor, Commerce and Industry Committees by August first
of each year a report on how the funds were expended for the
preceding fiscal year.
Section 40-57-80.
To be eligible for licensure, an
applicant shall:
(1) have attained the age
of twenty-one if applying for a license as a broker,
broker-in-charge, or property manager-in-charge;
(2) have attained the age
of eighteen if applying for a license as a salesman or property
manager;
(3) submit to a credit
report which shall indicate creditworthiness satisfactory to the
commission. If notified of unsatisfactory credit, the applicant
has sixty days to respond;
(4) have graduated from
high school or hold a certificate of equivalency;
(5) submit proof of
completion of education and, if applicable, experience
requirements as specified in this chapter;
(6) pass the applicable
examination.
Section 40-57-90.
An application for examination or
licensure must be made in writing on a form prescribed by the
department and must be accompanied by all applicable fees.
Section
40-57-100. (A) As a
condition for and before applying to take a license examination,
an applicant for a salesman, broker, or property manager license
shall provide proof of having met these educational requirements
within the last five years:
(1)
For a salesman's license, completion of sixty hours of classroom
instruction in fundamentals of real estate principles and
practices or evidence submitted to the department of a Juris
Doctor, Bachelor of Laws degree, or a baccalaureate degree with
a major in real estate from an accredited college or university.
Within one year following licensure, a salesman shall provide
proof of satisfactory completion of thirty hours of
post-licensing instruction in advanced real estate principles
and practices. Failure to complete the post-licensing education
within one year will result in cancellation of the license;
(2)
For a broker's license, completion of one hundred fifty hours,
ninety hours of which may be the hours required for a salesman's
license, of classroom instruction in advanced real estate
principles and practices and related topics, and three years of
experience with a salesman's license or evidence submitted to
the department of a Juris Doctor, Bachelor of Laws degree, or a
baccalaureate degree with a major in real estate from an
accredited college or university or the commission may accept
proof of related education and at least five years of experience
immediately preceding license application in business activities
equivalent to or closely related to real estate
transactions;
(3)
For a property manager's license, completion of thirty hours of
classroom instruction in property management principles and
practices or evidence submitted to the department of a Juris
Doctor, Bachelor of Laws degree, or a baccalaureate degree with
a major in real estate from an accredited college or
university.
(B) As a condition of
licensure, an applicant shall submit to an examination which
must be conducted by the department or a designated test
provider at a time and place specified by the department.
The applicant must receive
a passing grade on the examination, in accordance with a
cut-score determination established by the department.
An applicant who fails an
examination may be reexamined within the six-month period
following initial examination. If an applicant passes one part
of a two-part examination and fails the other, the applicant may
be reexamined on the failed portion within the succeeding
six-month period.
An applicant who passes
the examination must apply for a license within one year, or the
applicant must reapply for and retake the examination.
An individual who, at the
time of application, holds a real estate license in another
state or jurisdiction or whose real estate license in another
state or jurisdiction expired not more than six months before
application is required to pass only the state portion of the
examination to qualify for licensure.
The department or test
provider is authorized to collect and retain reasonable
examination fees. An applicant for an examination to be
conducted by a test provider shall pay the fee directly to the
test provider.
Section
40-57-110. (A) The
department shall issue licenses in the classifications of
broker, salesman, or property manager to individuals who qualify
under and comply with the requirements of this chapter. No
individual may be licensed in more than one classification at
the same time. The license must be in the form and size as the
department prescribes and is not transferable.
(B) The department may
issue a designated broker-in-charge license to a broker or one
qualified to be licensed as a broker and may issue a designated
property manager-in-charge license to a licensed property
manager or one qualified to be licensed as a property manager
upon application on a form prescribed by the department and
accompanied by applicable fees; however, no broker-in-charge or
property manager-in-charge license may be issued to or renewed
for an applicant unless the applicant:
(1)
has an ownership interest in the applicant's company; or
(2)
is actively engaged in the operation and management of the
company.
(C) Applicants also must
submit to a credit report which must indicate creditworthiness
satisfactory to the department. If notified of unsatisfactory
credit, the applicant shall have sixty days to respond.
(D) An individual holding
an active broker or salesman license must be licensed under a
broker-in-charge who is licensed by the department and may not
be licensed during the same period with more than one
broker-in-charge. When a licensee becomes disassociated with a
broker-in-charge for any reason, the broker-in-charge
immediately shall notify the department by letter and furnish a
forwarding address.
(E) An individual holding
an active property manager license must be licensed under a
property manager-in-charge or broker-in-charge who is licensed
by the department or must be designated as a property
manager-in-charge. A property manager may not be licensed during
the same period with more than one property manager-in-charge or
broker-in-charge. When a licensee becomes disassociated with a
broker-in-charge or property manager-in-charge for any reason,
the broker-in-charge or property manager-in-charge immediately
shall notify the department by letter and furnish a forwarding
address.
(F) After revocation of a
license, a new license may not be issued to the same individual
within a period of one year from the date of revocation or at
any time thereafter except upon an affirmative vote of a
majority of the members of the commission. A person seeking
licensure after revocation shall:
(1)
submit to the commission satisfactory proof that the person is
trustworthy, has a good reputation for honesty and fair dealing,
and is competent to transact the business of a real estate
licensee;
(2)
submit proof of educational qualifications as set forth in this
chapter if the proof of educational qualifications on file is
more than five years old;
(3)
pass the applicable examination; and
(4)
meet any other qualifications and conditions which apply to
individuals applying for a license who have never been
licensed.
(G) A licensee may place a
license on inactive status by informing the department in
writing. To maintain an inactive license status, the license
must be renewed in the same manner as provided for active
license renewals. Upon proper compliance with the renewal
requirements, a license may remain on inactive status for an
indefinite period of time. An individual seeking to reactivate a
license shall apply for the same license classification which
was placed on inactive status, pay the appropriate fee, and meet
the continuing education requirements as prescribed.
(H) A license must be
renewed in accordance with procedures established by the
department pursuant to Section 40-1-50(E). It is the licensee's
responsibility to renew the license whether or not notice is
received.
(I) A license which has
not been renewed by its date of expiration is lapsed and may be
reinstated within six months following expiration upon payment
of applicable fees plus penalties as provided for in Section
40-57-70.
(J) A license which has
lapsed and has not been reinstated by the last day of the sixth
month following expiration must be canceled.
Section
40-57-115. In addition to
other requirements established by law and for the purpose of
determining an applicant's eligibility for licensure as a
salesman, broker, broker-in-charge, property manager, and
property manager-in-charge, the commission shall require initial
applicants to submit to a state criminal records check, by a
source approved by the commission, and a national criminal
records check. Costs of conducting a criminal records check must
be borne by the applicant. The commission shall keep information
received pursuant to this section confidential, except that
information relied upon in denying licensure may be disclosed as
necessary to support the administrative action.
Section
40-57-120. (A) The
commission may enter into reciprocal agreements with real estate
regulatory authorities of other jurisdictions which provide for
waivers of education requirements or examinations if the
commission considers the education and examination requirements
of another jurisdiction to be substantially equivalent to the
requirements of this chapter.
(B) An individual applying
for a license by reciprocity shall submit an application,
license fee, and certification of licensure from the real estate
regulatory authority of the jurisdiction where the current or
previous license was held and shall comply with additional
requirements as may be established by the commission. The
applicant also shall provide copies of the records of any
disciplinary actions taken against the applicant.
(C) A nonresident real
estate salesman license may not be granted to an applicant
unless that applicant is affiliated with a resident or
nonresident broker-in-charge licensed by the commission. If a
nonresident licensee terminates the affiliation with a
broker-in-charge licensed by the commission, the license of the
nonresident is canceled unless the licensee places the license
on inactive status or affiliates with another broker-in-charge
licensed by the commission.
(D) A nonresident is not
required to maintain a place of business in this State if the
nonresident maintains an active place of business in the state
of domicile. A nonresident applicant shall file an irrevocable
consent that suits and actions may be commenced against the
applicant in the proper court in a judicial circuit of the state
in which a cause of action may arise or in which the plaintiff
may reside, by the service of process or pleading, authorized by
the laws of this State, on the chairman of the commission or any
authorized assistant or deputy appointed by the Director of the
Department of Labor, Licensing and Regulation. The consent shall
stipulate that the service of process or pleading must be taken
and held in all courts to be as valid and binding as if service
had been made upon the applicant in South Carolina. If the
process or pleadings mentioned in this chapter are served upon
the chairman of the commission or any authorized assistant or
deputy appointed by the Director of the Department of Labor,
Licensing and Regulation, it must be by duplicate copies, one of
which must be filed in the office of the commission and the
other immediately forwarded by the commission by registered or
certified mail to the applicant against whom the process or
pleadings are directed, at the last known address of the
applicant as shown by the records of the commission.
(E)(1) A resident licensee
who becomes a nonresident must notify the commission in writing,
within sixty days, of the change in residency and comply with
nonresident requirements or place his license on inactive status
to avoid cancellation of the license.
(2) A
nonresident licensee who becomes a resident of South Carolina
must notify the commission in writing, within sixty days, of the
change in residency and comply with the requirements of this
chapter or place his license on inactive status to avoid
cancellation of the license.
(3)
Failure to notify the commission of the change in residency and
compliance with the requirements of this subsection is a
violation of this chapter and subject to the penalties provided
for in Section 40-57-150.
(F) A nonresident
applicant or licensee must comply with all requirements of
commission regulations and of this chapter. The commission may
adopt regulations necessary for the regulation of nonresident
licensees.
Section
40-57-130. (A) As a
condition of active license renewal, a broker or salesman shall
provide proof of satisfactory completion biennially of eight
hours of continuing education in courses approved by the
department and taught by instructors approved by the department.
The eight hours shall include a minimum of two hours of
instruction in current federal and state law affecting brokers
and salesmen.
(B) The following are
exempt from the biennial continuing education required by
subsection (A):
(1) a
broker or salesman who successfully completes a post-licensing
course is exempt for the period during which the course was
taken;
(2) a
broker or salesman while on inactive status; however, the
eight-hour requirement must be completed and proof submitted
with an application to return to active status;
(3)
instructors of approved courses if they request in writing
continuing education credit for time spent teaching or
developing approved continuing education courses;
(4) a
nonresident broker or salesman who has successfully satisfied
the continuing education requirements of the jurisdiction of
residence;
(5) a
broker or salesman upon reaching the age of sixty-five years
with a minimum of twenty-five years of licensure.
(C) Brokers or salesmen
taking more than the required number of hours during a two-year
period may not carry forward any excess hours to another renewal
period.
(D) A broker or salesman
who fails to complete the continuing education requirements
required by this section by the date of license renewal may
renew by submitting applicable fees but must immediately be
placed on inactive status and may not engage in the practice of
real estate while on inactive status. The license may be
reactivated upon proof of completion of required continuing
education and payment of applicable fees.
Section
40-57-135. (A) The duties
of the broker-in-charge or property manager-in-charge are
to:
(1)
adequately supervise employees or associated licensees to ensure
their compliance with this chapter and maintain real estate
trust accounts when required by law;
(2)
review and approve all forms of listing agreements, agency
agreements, offers, sale contracts, purchase contracts, leases,
options, contract addenda, or other routinely used contractual
documents;
(3)
maintain adequate, reasonable, and regular contact with
associated licensees engaged in real estate transactions so as
to prevent or curtail practices by a licensee which would
violate any provision of this chapter, Title 40, Chapter 1, the
Interstate Land Sales Practices Act, or the Vacation Time
Sharing Plans Act;
(4)
instruct employees and associated licensees on the proper
handling of trust funds;
(5)
be available to the public during normal business hours in order
to discuss or resolve complaints and disputes which arise during
the course of real estate transactions in which the
broker-in-charge or property manager-in-charge or an associated
licensee is involved;
(6)
ensure that accurate and complete records, as required by this
chapter, are maintained for real estate trust accounts;
(7)
ensure that backup copies are maintained for computerized real
estate trust accounts. Backup copies must be maintained on a
data storage medium which is separate from the medium which
contains the source documents;
(8)
establish and maintain a written office policy in accordance
with Section 40-57-137(B).
(B)(1) A broker-in-charge
or property manager-in-charge, when taking possession of funds
belonging to another in connection with a real estate
transaction, shall establish and maintain control of and
responsibility for an active real estate trust account so
designated in the company name for which the respective
broker-in-charge's or property manager-in-charge's license is
issued; however, the brokers-in-charge or property
managers-in-charge of a real estate company with multiple
offices may utilize one central trust account.
(2)
All monies received by a property manager-in-charge as agent for
his principal in a real estate transaction must be deposited in
a separate real estate trust account so designated within
forty-eight hours of receipt, excluding Saturdays, Sundays, and
bank holidays; except that rent monies received by a licensee
who also is directly employed by the owner of rental property
may be placed in an operating or other similar account, but
otherwise must be properly accounted for as provided for in this
section.
(3)
All monies received by a property manager-in-charge in
connection with a real estate rental including, but not limited
to, security deposits, pet deposits, damage deposits, and
advance rentals (except earned rental proceeds) shall remain in
the trust account until the lease or rental transaction expires
or is terminated, at which time the monies must be disbursed in
accordance with the contract which directs the property
manager-in-charge to hold the monies, and a full accounting must
be made to the landlord or tenant as appropriate. Earned rental
proceeds must be disbursed to the landlord within a reasonable
time after clearance of the deposit by the bank.
(4)
All monies received by a broker-in-charge as agent for a
principal in a real estate sales or exchange transaction must be
deposited as follows in a separate real estate trust account so
designated:
(a)
cash monies or certified funds must be deposited within
forty-eight hours of receipt, excluding Saturday, Sunday, and
bank holidays;
(b)
checks must be deposited within forty-eight hours, excluding
Saturday, Sunday, and bank holidays, after acceptance of an
offer by the parties to the transaction;
(c)
all monies received by a broker-in-charge in connection with a
real estate sales or exchange transaction and deposited in the
real estate trust account shall remain in the trust account
until consummation or termination of the transaction, at which
time the monies must be disbursed in accordance with the
contract which directs the broker-in-charge to hold the monies,
and a full accounting must be made to the principal.
(5)
If a dispute arises between buyer and seller concerning the
entitlement to and disposition of an earnest money deposit, and
the dispute is not resolved by reasonable interpretation of the
contract by the parties to the contract, the deposit must be
held in the trust account until the dispute is resolved by:
(a) a
written agreement which directs the disposition of monies and is
signed by all parties claiming an interest in the trust monies.
The agreement must be separate from the contract which directs
the broker-in-charge or property manager-in-charge to hold the
monies;
(b)
filing of an interpleader action in a court of competent
jurisdiction; by filing such an action, the escrow agent may
deposit the earnest money with the court, according to the rules
and procedures governing interpleader actions;
(c)
order of a court of competent jurisdiction;
(d)
voluntary mediation.
(6)
All trust accounts maintained by brokers-in-charge or property
managers-in-charge must be located in an insured financial
institution authorized to conduct business in South
Carolina.
(7) A
broker-in-charge or property manager-in-charge, when required by
this chapter to establish and maintain a real estate trust
account, also shall maintain, in his designated principal place
of business, a recordkeeping system consisting of:
(a) a
journal or an accounting system which records the chronological
sequence in which funds are received and disbursed for real
estate sales. For funds received, the journal or accounting
system must include the date of receipt, the name of the party
from whom the money was received, the name of the principal,
identification of the property, the date of deposit, the
depository, the payee, and the check numbers, dates, and
amounts. A running balance must be maintained for each entry of
a receipt or disbursement. The journal or accounting system must
provide a means of reconciling the accounts;
(b) a
journal or an accounting system containing, for property
management, the same information as stated in subitem (a) except
that the required running balance may be determined at the time
of reconciliation;
(c) a
separate record for each tenant identifying the unit, the unit
owner, amount of rent, due date, security deposit, and all
receipts with dates when managing property. There also must be
maintained an owner's ledger for all properties owned by each
owner showing receipts and disbursements applicable to each
property managed. All disbursements must be documented by bids,
contracts, invoices, or other appropriate written memoranda;
(d)
trust account deposit documents shall identify the
broker-in-charge or property manager-in-charge and the buyer or
tenant unless other appropriate written memoranda are
maintained;
(e) a
general ledger identifying security deposits;
(f) a
monthly reconciliation of each separate account except where
there has been no deposit or disbursement during that month. The
reconciliation must include a written worksheet comparing the
reconciled bank balance with the journal balance and with the
ledger total to ensure agreement.
(8)
All cash monies or certified funds received by a licensee in
connection with a real estate transaction in which the licensee
is engaged for his broker-in-charge or property
manager-in-charge immediately must be delivered to the
broker-in-charge or property manager-in-charge, except for
checks received as escrow or security deposits for sales or
lease agreements, which must be delivered to the
broker-in-charge or property manager-in-charge as soon as the
sales or lease agreement is ratified by both parties.
(9) A
broker-in-charge or property manager-in-charge may not commingle
monies or other property of the principal with the
broker-in-charge or property manager-in-charge's own money or
property, except that a broker-in-charge or property
manager-in-charge may maintain a clearly identified amount of
his own funds in the trust account to cover bank service charges
in order to avoid the closing of the account when no client's
monies are on deposit.
(10)
Monies received by a broker-in-charge or property
manager-in-charge which must be deposited in a trust account may
be deposited in an interest-bearing account. Interest earned on
these monies may be retained by the broker-in-charge or property
manager-in-charge only if:
(a)
the depositor or owner of such monies has been informed of their
right to ownership of the interest but relinquishes to the
broker-in-charge or property-manager-in-charge by written
agreement said right of ownership; and
(b)
if such agreement is part of a preprinted form, the language
must be conspicuous.
(11)
Records required by this chapter must be maintained for a
minimum of five years and the broker-in-charge or property
manager-in-charge shall furnish a copy of the records to a
representative of the department upon request. Accounting
records that may be requested include, but are not limited to,
journals, ledgers, folios, client subaccounts, tenant accounts,
canceled checks, deposit slips, and bank statements.
(12)
A licensee may form a corporation allowing the licensee's
broker-in- charge to pay commission to that corporation;
however, for the corporation to receive compensation, all
principals of the corporation shall have an active real estate
license under that same broker-in-charge.
(C) A licensed
broker-in-charge or property manager-in-charge shall establish
and maintain a specific office location which must be accessible
by the public during reasonable business hours.
(1) A
broker-in-charge or property manager-in-charge, in addition to
the principal office location, may maintain one or more branch
offices under the same company name at a different location.
Each branch office must be managed by a broker-in-charge or
property manager-in-charge who shall comply with the
requirements of subsection (A).
(2) A
licensee may not conduct real estate business under any other
name or at any address other than the one for which his license
is issued. The broker-in-charge or property manager-in-charge
shall notify the department by mail within ten days of any
change of office name and/or address and enclose appropriate
fees.
(3)
In the event of the death or medical incapacitation of a
broker-in-charge or property manager-in-charge which precludes
him from carrying out duties as required in this chapter, the
department may permit an associated licensee to act as
broker-in-charge or property manager-in-charge for up to six
months.
(4) A
licensee may not advertise, market, or offer to conduct a real
estate transaction involving real estate owned in whole or in
part by another person without first obtaining a written listing
agreement from the owner and when advertising or marketing in
any medium including site signage, a licensee clearly shall
identify the full name of the company with which the licensee is
affiliated. Brokers-in-charge who are members of a multiple
listing service must be allowed to make their company listings
available for any cooperative marketing or advertising program,
subject to the rules and regulations of the multiple listing
service and with the consent of the owner. Consent may be
contained and obtained from the owner through the listing
agreement.
(5)
When operating under a trade or franchise name, a licensee
clearly shall reveal the identity of the franchisee or holder of
the trade name. Notwithstanding another provision of law, a real
estate licensee may use any public information from a local
government source to contact an individual by telephone, mail,
electronic mail, or other means for the purpose of selling or
marketing real property and real property services. This section
does not apply to state government agencies.
(6) A
licensee clearly shall reveal his license status in a personal
transaction involving the purchase, sale, exchange, rental,
lease, or auction of real estate. A licensee meets the
requirements of this section by disclosing in underlined capital
letters on the first page of the contract his license status in
the real estate sales contract, exchange, rental, or lease
agreement. Monies received in a personal rental transaction must
be deposited in the licensee's personal trust account and do not
have to be deposited in the broker's trust account, unless the
real property is managed by the broker's company.
(7)
Every broker-in-charge or property manager-in-charge shall
maintain for a minimum of five years and shall furnish to the
department upon request a written copy of a:
(a)
lease;
(b)
contract of sale;
(c)
listing contract or agency agreement;
(d)
option contract;
(e)
management agreement;
(f)
residential property condition disclosure statement;
(g)
closing statement;
(h)
policy on agency representation;
(i)
fair housing policy.
(8)
The department may license the same person as broker-in-charge
or property manager-in-charge of more than one company or branch
office if the broker-in-charge or property manager-in-charge
making the request acknowledges in writing that he understands
the duties and can fully assume the responsibility to ensure
full compliance with this chapter by each office and the
associated licensees.
(D) No licensee either
directly or indirectly may buy for his own account or for a
corporation or any other business in which he holds an interest
or for a close relative, real estate listed with him or real
estate for which he has been approached by the seller or
prospective buyer to act as agent, without first making his true
position clearly known in writing to all parties involved. Upon
request of the department, the licensee shall provide evidence
of having made this disclosure.
(1)
With regard to offers to purchase real estate, a licensee
shall:
(a)
upon receipt, prepare all offers in writing and promptly present
them to the seller;
(b)
upon obtaining a written acceptance of an offer, promptly
deliver true, executed copies to all parties;
(c)
ensure that all of the terms and conditions of the transaction
are included in the offer to purchase;
(d)
ensure that changes or modifications made during negotiation are
in writing and initialed and dated by both parties before
proceeding with the transaction.
(2)
Every licensee shall ensure that, at closing, both the buyer and
the seller in a real estate transaction receive a complete and
detailed closing statement properly accounting for all funds
paid, received, and expended in connection with the
transaction.
(3) A
licensee may not allow or create an unreasonable delay in the
closing of a transaction or act in a manner which causes failure
or termination of a transaction due solely to a dispute among
participating licensees concerning the division of a
commission.
(4) A
listing or buyer's representation agreement must be in writing
and must set forth all material terms of the parties' agency
relationship including, but not limited to:
(a) a
description of the agent's duties or services to be performed
for the principal including, but not limited to, an explanation
of the office policy regarding dual agency and designated
agency, if offered by the brokerage;
(b)
the amount of compensation to be paid or the method to be used
in calculating the amount of compensation to be paid;
(c)
an explanation of how and when the agent earns his
compensation;
(d)
an explanation of how compensation will be divided among
participating or cooperating brokers, if applicable;
(e)
the amount of retainer fees, deposits, or any other money which
is collected before the agent's performance of any services on
behalf of the principal and an explanation of whether or not,
and if so, under what conditions such monies are refundable or
payable to or on behalf of the principal;
(f)
the duration of the agency relationship, setting forth specific
dates for the beginning and ending of the relationship;
(g)
the signature of all parties.
(h) a
listing or buyer's representation agreement may not contain a
provision requiring a party signing the agreement to notify the
licensee of his intention to cancel the agreement after the
definite expiration date;
(i) a
listing or buyer's representation agreement must be clearly
defined if intended to be either an "exclusive agency"
listing or buyer's representation agreement or "exclusive
right to sell" listing or "exclusive right to
buy" buyer's representation agreement;
(j) a
listing or buyer's representation agreement must clearly specify
any exception or variation in amount of commission to be paid
and circumstances which would apply;
(k) a
copy of the listing or buyer's representation agreement must be
given to the seller or buyer at the time of, or directly
following, signing; and
(l) a
buyer's representation agreement must provide a price or price
range for property of interest to the buyer and a listing
agreement must state the price of the listed property.
(5)
Reserved.
(E) The management of each
residential multi-unit rental location must be provided by an
on-site licensee or an off-site licensee if there is no on-site
staff.
(1)
The department may permit multiple multi-unit rental property
locations to be managed by one licensee.
(2)
An unlicensed employee of the owner of a multi-unit rental
property or an unlicensed individual who works under the
supervision of a licensee is permitted to perform only the
following duties:
(a)
maintenance;
(b)
clerical or administrative support;
(c)
collection of rents which are made payable to the owner or real
estate company;
(d)
showing rental units to prospective tenants;
(e)
furnishing published information;
(f)
providing applications and lease forms;
(g)
receiving applications and leases for submission to the owner or
the licensee for approval.
(3)
Reserved.
(F) Licensees who manage
residential and commercial property shall do so under a written
management agreement which shall set forth, at a minimum,
the:
(1)
names and signatures of authorized parties to the agreement;
(2)
property identification;
(3)
method of compensation to the licensee;
(4)
term, including definite expiration date; however, the contract
shall contain a clause in underlined capital letters on the
first page of the contract to provide for compensation in the
event the licensee has secured a tenant during the original term
of the management agreement. In addition to this requirement, a
management agreement may not contain any automatic renewal
clause or provision, unless the management agreement also
contains a clause or provision that allows either party to
cancel the management agreement for any or no cause with thirty
days' notice after the original definite expiration date;
(5)
terms and conditions of tenant rental or lease arrangements;
however, the management agreement may not contain a provision
binding the property under a future listing agreement if the
property is to be sold in the future. A separate listing
agreement is required.
(G) For all types of real
estate transactions, including leases and sales, an unlicensed
employee of the owner or an unlicensed individual working under
the supervision of a licensee may not:
(1)
discuss, negotiate, or explain a contract, listing, buyer
agency, lease, agreement, or other real estate document;
(2)
vary or deviate from the rental price or other terms and
conditions previously established by the owner or licensee when
supplying relevant information concerning the rental of
property;
(3)
approve applications or leases or settle or arrange the terms
and conditions of a lease;
(4)
indicate to the public that the unlicensed individual is in a
position of authority which has the managerial responsibility of
the rental property;
(5)
conduct or host an open house or manage an on-site sales
office;
(6)
show real property;
(7)
answer questions regarding company listings, title, financing,
and closing issues, except for information that is otherwise
publicly available;
(8)
discuss, negotiate, or explain a contract, listing, buyer
agency, lease, agreement, or other real estate document;
(9)
be paid solely on the basis of real estate activity including,
but not limited to, a percentage of commission or any amount
based on the listing or sales compensation or commission;
(10)
negotiate or agree to compensation or commission including, but
not limited to, commission splits, management fees, or referral
fees on behalf of a licensee;
(11)
engage in an activity requiring a real estate license as
required and defined by this chapter.
Section
40-57-137. (A) A real
estate brokerage company that provides services through an
agency agreement for a client is bound by the duties of loyalty,
obedience, disclosure, confidentiality, reasonable care,
diligence, and accounting as set forth in this chapter. The
following are the permissible agency relationships a licensee
may establish:
(1)
seller agency;
(2)
buyer agency;
(3)
disclosed dual agency; or
(4)
subagency.
(B) The broker-in-charge
of a real estate brokerage company shall adopt a written company
policy that identifies and describes the types of real estate
brokerage agency relationships in which associated licensees may
engage. The written policy shall include:
(1)
the company's policy regarding cooperation with subagents or
buyer agents, or both, and whether the broker offers
compensation to these agents;
(2)
the scope of services provided to the company's clients;
(3)
the scope of services provided to the company's customers;
(4)
when and how associated licensees shall explain and disclose
their agency relationships with any interested parties to a
potential transaction; the explanation and disclosure shall
always comply with the minimum requirements set forth in this
chapter;
(5)
when and how an associated licensee shall explain to clients the
potential for the licensee to later act as a disclosed dual
agent in specific transactions, as permitted by this
chapter;
(6)
the company's policy on compliance with state and federal fair
housing laws.
(C) On reaching a written
agreement to provide brokerage services for a seller of real
estate, a seller's agent shall:
(1)
perform the terms of the written brokerage agreement made with
the seller;
(2)
in accordance with subsection (A), promote the interest of the
seller by performing agency duties which include:
(a)
seeking a sale at the price and terms stated in the brokerage
agreement or at a price and terms acceptable to the seller,
except that the licensee is not obligated to seek additional
offers to purchase unless the brokerage agreement provides
otherwise while the property is subject to a contract of
sale;
(b)
presenting in a timely manner all offers and counteroffers to
and from the seller, even when the property is subject to a
contract of sale;
(c)
disclosing to the seller all relevant facts concerning the
transaction which are actually known to the licensee or, if
acting in a reasonable manner, should have been known to the
licensee, except as directed otherwise in this section;
(d)
advising the seller to obtain expert advice on matters that are
beyond the expertise of the licensee;
(e)
accounting in a timely manner, as required by this chapter, for
all money and property received in which the seller has or may
have an interest;
(3)
exercise reasonable skill and care in discharging the licensee's
agency duties;
(4)
comply with all provisions of this chapter and with any
regulations adopted by the department;
(5)
comply with all applicable federal, state, or local laws, rules,
regulations, and ordinances related to real estate brokerage,
including laws which relate to fair housing and civil
rights;
(6)
preserve confidential information provided by the seller during
the course of and following the agency relationship that might
have a negative impact on the seller's real estate activity
unless:
(a)
the seller to whom the confidential information pertains grants
consent to disclose the information; or
(b)
disclosure is required by law; or
(c)
disclosure is necessary to defend the licensee against an
accusation of wrongful conduct in a proceeding before the
commission or before a professional association or professional
standards committee.
No cause of action may
arise against a licensee for disclosing confidential information
in compliance with subsection (C)(6)(a), (b), or (c).
(D) A licensee acting as a
seller's agent may offer alternative properties to prospective
buyers. A licensee acting as a seller's agent also may list for
sale competing properties.
(E) A licensee acting as a
seller's agent may not offer a subagency relationship to other
brokers or offer to compensate another broker who represents a
buyer without the knowledge and consent of the seller
client.
(F) A licensee who
represents a seller shall treat all prospective buyers honestly
and may not knowingly give them false or misleading information
about the condition of the property which is known to the
licensee or, when acting in a reasonable manner, should have
been known to the licensee. Notwithstanding another provision of
law, no cause of action may be brought against a seller's agent
that has truthfully disclosed to a buyer any known material
defect including, but not limited to, moisture or mold problems
and conditions. No cause of action may be brought against a real
estate licensee by a seller for information contained in reports
or opinions prepared by an engineer, land surveyor, geologist,
wood destroying inspection control expert, termite inspector,
mortgage broker, home inspector or other home inspection expert,
or other similar reports. A seller's agent is not obligated to
discover latent defects in property or to advise the agent's
clients on matters outside the scope of the agent's real estate
expertise. A seller's agent, the company, and the
broker-in-charge are not liable to a buyer for providing the
buyer with false or misleading information if that information
was provided to the licensee by his client and the licensee did
not know or have reasonable cause to suspect the information was
false or incomplete.
(G) Nothing in this
chapter limits the obligation of the buyer to inspect the
physical condition of the property which the buyer may
purchase.
(H) On reaching a written
agreement to provide brokerage services to a potential buyer of
real estate, a buyer's agent shall:
(1)
perform the terms of the written brokerage agreement made with
the buyer;
(2)
in accordance with subsection (A), promote the interest of the
buyer by performing the buyer's agent's duties which
include:
(a)
seeking property at the price and terms stated in the brokerage
agreement or at a price and terms acceptable to the buyer,
except that the licensee is not obligated to seek additional
properties unless the brokerage agreement provides otherwise for
a buyer once the buyer becomes a party to a contract of
sale;
(b)
presenting in a timely manner all offers and counteroffers to
and from the buyer;
(c)
disclosing to the buyer all relevant facts concerning the
transaction which are actually known to the licensee or, if
acting in a reasonable manner, should have been known to the
licensee, except as directed otherwise in this section. Nothing
in this chapter shall limit a buyer's obligation to inspect the
physical condition of the property which the buyer may
purchase;
(d)
advising the buyer to obtain expert advice on material matters
that are beyond the expertise of the licensee;
(e)
accounting in a timely manner, as required by this chapter, for
all money and property received in which the buyer has or may
have an interest;
(3)
exercising reasonable skill and care in discharging the buyer's
agent's agency duties;
(4)
complying with all provisions of this chapter and with any
regulations promulgated by the department;
(5)
complying with all applicable federal, state, or local laws,
rules, regulations, and ordinances related to real estate
brokerage, including laws which relate to fair housing and civil
rights;
(6)
preserving confidential information provided by the buyer during
the course of or following the agency relationship that might
have a negative impact on the buyer's real estate activity
unless:
(a)
the buyer to whom the confidential information pertains, grants
consent to disclose the information; or
(b)
disclosure is required by law; or
(c)
disclosure is necessary to defend the licensee against an
accusation of wrongful conduct in a proceeding before the
commission or before a professional association or professional
standards committee.
No
cause of action may arise against a licensee for disclosing
confidential information in compliance with subsections
(H)(6)(a), (b), or (c).
(I) A licensee acting as a
buyer's agent may offer properties which interest his buyer
client to other potential buyers.
(J) A licensee acting as a
buyer's agent may not offer a subagency relationship to other
brokers or offer to compensate another broker who represents a
seller without the knowledge and consent of the buyer
client.
(K) A licensee who
represents a buyer shall treat all prospective sellers honestly
and may not knowingly give them false or misleading information
about the buyer's ability to perform the terms of a transaction.
A buyer's agent is not obligated to discover latent defects in
property or to advise his clients on matters outside the scope
of his real estate expertise. Notwithstanding another provision
of law, no cause of action may be brought against a buyer's
agent that has truthfully disclosed to a buyer known material
defects including, but not limited to, moisture or mold problems
and conditions. No cause of action may be brought against a real
estate licensee by a buyer for information contained in reports
or opinions prepared by an engineer, land surveyor, geologist,
wood destroying inspection control expert, termite inspector,
mortgage broker, home inspector or other home inspection expert,
or other similar reports. A buyer's agent, his company, and the
broker-in-charge are not liable to a seller for providing the
seller with false or misleading information if that information
was provided to the licensee by his client and the licensee did
not know or have reasonable cause to suspect the information was
false or incomplete.
(L) A licensee who
represents one party to a real estate transaction may provide
assistance to other parties to the transaction by performing
ministerial acts such as writing and conveying offers, and
providing information and aid concerning other professional
services not related to the real estate brokerage services being
performed for a client. Performing ministerial acts does not
create an agency relationship.
(M)(1) A licensee may act
as a disclosed dual agent only with the prior informed and
written consent of all parties. The informed consent must be
evidenced by a dual agency agreement, promulgated by the
commission, and must be signed by the buyer before writing an
offer and by the seller before signing the sales contract. The
agreement must specify the transaction in which a licensee is
serving as dual agent and must state that:
(a)
in acting as a dual agent, a licensee represents clients whose
interests may be adverse and that agency duties are limited;
(b)
the dual agent may disclose information gained from one party to
another party if the information is relevant to the transaction,
except if the information concerns:
(i)
the willingness or ability of a seller to accept less than the
asking price;
(ii)
the willingness or ability of a buyer to pay more than an
offered price;
(iii)
confidential negotiating strategy not disclosed in an offer as
terms of a sale; or
(iv)
the motivation of a seller for selling property or the
motivation of a buyer for buying property.
(c)
the clients may choose to consent to disclosed dual agency or
may reject it; and
(d)
the clients have read and understood the agency agreement and
the agency disclosure form and acknowledge that their consent to
dual agency is voluntary.
(2) A
broker-in-charge and his affiliated licensees in the broker's
main office may conduct business with a client in any of the
broker's branch offices as a customer or client without creating
a dual agency relationship, so long as the branch offices each
have a separate broker-in-charge and do not share the same
broker-in-charge or real estate licensees as the main
office.
(N) A subagent is a
designated broker and all associated licensees engaged by a
broker of another company to act as agent for his client. A
subagent owes the same duties and responsibilities to the client
as the client's primary broker pursuant to subsections (C) and
(H).
(O)(1) Prospective buyers
and sellers of unlisted real estate who do not choose to
establish an agency relationship with a licensee but who use the
services of the licensee are considered customers. A licensee
may offer the following services to a customer including, but
not limited to:
(a)
identify and show property for sale, lease, or exchange;
(b)
provide real estate statistics and information on property;
(c)
provide pre-printed real estate form contracts, leases, and
related exhibits and addenda;
(d)
act as a scribe in the preparation of real estate form
contracts, leases, and related exhibits and addenda;
(e)
locate a list of architects, engineers, surveyors, inspectors,
lenders, insurance agents, attorneys, and other professionals;
and
(f)
identify schools, shopping facilities, places of worship, and
other similar facilities on behalf of any of the parties in a
real estate transaction.
(2) A
licensee offering services to a customer shall:
(a)
timely present all offers to and from the parties involving the
sale, lease, and exchange of property;
(b)
timely account for all money and property received by the broker
on behalf of a party in a real estate transaction;
(c)
provide a meaningful explanation of agency relationships in real
estate transactions;
(d)
provide an explanation of the scope of services to be provided
by the licensee; and
(e)
be fair and honest and provide accurate information in all
dealings.
(3)
Nothing in this section limits the seller's and buyer's
responsibility to conduct an inspection of the property.
(4) A
licensee offering services to a customer may not knowingly give
a party in a real estate transaction false information; however,
the licensee is not liable to a party for providing false
information to the party if the real estate licensee did not
have actual knowledge that the information was false and
discloses to the party the source of the information. Nothing in
this subsection limits an obligation of a seller under
applicable law to disclose to prospective buyers all adverse
material facts actually known by the seller pertaining to the
physical condition of the property or limits the obligation of
prospective buyers to inspect and to familiarize themselves with
potentially adverse conditions related to the physical condition
of the property, improvements located on the property, and the
area in which the property is located. No cause of action arises
on behalf of a person against a real estate licensee for
revealing information in compliance with this subsection. No
licensee is liable for failure to disclose a matter other than
those matters enumerated in this subsection. Violations of this
subsection do not create liability on the part of the real
estate licensee absent a finding of fraud on the part of the
licensee.
(5)
Notwithstanding another provision of law, no cause of action may
be brought against a real estate licensee who has truthfully
disclosed to a customer known material defects including, but
not limited to, moisture or mold problems and conditions. No
cause of action may be brought against a real estate licensee by
a customer for information contained in any reports or opinions
prepared by an engineer, land surveyor, geologist, wood
destroying inspection control expert, termite inspector,
mortgage broker, home inspector or other home inspection expert,
or other similar reports. A real estate licensee may not be the
subject of an action and no action may be instituted against a
real estate licensee by a customer for information contained in
the form prescribed by Chapter 50, Title 27 unless the real
estate licensee is signatory to that opinion or report.
(P)(1) A broker-in-charge
may assign, through the adoption of a company policy, different
licensees affiliated with the broker-in-charge as designated
agents to exclusively represent different clients in the same
transaction. Any company policy adopted to fulfill the
requirements of this subsection must contain provisions
reasonably calculated to ensure each client is represented in
accordance with the requirements of this chapter.
(2) A
broker-in-charge may personally, or through the broker's duly
authorized real estate licensed representative, specifically
designate, in a written agency agreement obtained in accordance
with this chapter, one or more affiliated licensees who will be
acting as agent of the buyer client or seller client to the
exclusion of all other affiliated licensees. Buyers and sellers
shall consent to enter into designated agency relationships. The
informed consent must be evidenced by a designated agency
agreement, promulgated by the commission, and must be signed by
the buyer before writing the offer and by the seller before
signing the sales agreement. The designated agency agreement
must include language informing the buyer and seller of the
obligations of the broker-in-charge and affiliated agents under
this section. The designated agency agreement shall include
language informing the buyer and seller of the obligations of
the broker-in-charge and affiliated agents under this
section.
(3)
If a buyer client of a designated agent wants to view a property
that was personally listed by the broker-in-charge, the
broker-in-charge shall act as a dual agent with the written
consent of the buyer and seller, as required by subsection
(M).
(4) A
designated agent of a seller client has the duties and
obligations set forth in subsections (C) through (G). A
designated agent of a buyer client has the duties and
obligations set forth in subsections (H) through (K).
(5)
In a transaction where both buyer and seller are represented by
designated agents and the designated agents are supervised by
the same broker-in-charge, the broker-in-charge shall act as a
dual agent pursuant to subsection (M). The broker-in-charge is
not required to complete a dual agency agreement under this
provision. Consent must be contained in the designated agency
agreement.
(6) A
designated agent may disclose to the designated agent's
broker-in- charge, or his licensed representative, confidential
information of a client for the purpose of seeking advice or
assistance for the benefit of the client in regard to a
transaction.
(7)
If a buyer client of a real estate licensee in a designated
agent role wants to view and make an offer to purchase a
property owned by a seller client of the same real estate
licensee, the real estate licensee must act as a dual agent with
the written consent of the buyer and seller, as required by
subsection (M).
(8)
If a broker-in-charge appoints different designated agents in
accordance with subsection (P)(1), the broker-in-charge, all
remaining affiliated licensees, and the real estate brokerage
firm must be deemed to be dual agents, except for the designated
licensees and those licensees in the firm's branch offices so
long as those branch offices have a separate broker-in-charge.
The broker-in-charge is not required to complete a dual agency
agreement under this provision. Consent must be contained in the
designated agency agreement.
(9)
When designated agents are appointed in accordance with
subsection (P)(1), the broker-in-charge, the clients, and the
designated agents must be considered to possess only actual
knowledge and information; there may be no imputation of
knowledge or information between and among the broker-in-
charge, the designated agents, and the clients. Designated
agents must not disclose, except to the designated agent's
broker-in-charge, information made confidential by written
request or instruction of the client whom the designated agent
is representing, except information allowed to be disclosed by
this section or required to be disclosed by this section. Unless
required to be disclosed by law, the broker-in-charge of a
designated agent may not reveal confidential information
received from either the designated agent or the client with
whom the designated agent is working. For the purposes of this
section, confidential information is information the disclosure
of which has not been consented to by the client and that could
harm the negotiating position of the client.
(10)
The designation of one or more of a broker-in-charge's
affiliated licensees as designated agents does not permit the
disclosure by the broker-in-charge or affiliated licensees of
any information made confidential by an express written request
or instruction by a party before or after the creation of the
designated agency. The broker-in-charge and affiliated licensees
shall continue to maintain this confidential information unless
the party from whom the confidential information was obtained
permits its disclosure by written agreement or disclosure is
required by law. No liability is created as a result of a
broker-in-charge and affiliated licensee's compliance with this
subsection.
(Q) The provisions of this
section which are inconsistent with applicable principles of
common law supersede the common law, and the common law may be
used to aid in interpreting or clarifying the duties described
in this section. Except as otherwise stated, nothing in the
section precludes an injured party from bringing a cause of
action against licensees, their companies, or their
brokers-in-charge.
(R) The payment or promise
of payment of compensation to a real estate licensee by a
seller, buyer, landlord, or tenant does not determine whether an
agency relationship has been created between any real estate
licensee and a seller, buyer, landlord, or tenant.
Section
40-57-139. (A) A licensee
shall provide at the first practical opportunity to all buyers
and sellers with whom the licensee has substantive contact:
(1) a
meaningful explanation of agency relationships in real estate
transactions that are offered by that brokerage;
(2)
an agency disclosure form prescribed by the commission.
(B) A licensee who becomes
a seller's agent shall provide an agency disclosure form to the
seller at the time the listing is obtained and signed.
Acknowledgement of receipt of the form must be contained in the
listing agreement.
(C) A licensee who becomes
a buyer's agent shall provide an agency disclosure form to the
buyer at the time an agency agreement is signed. Acknowledgement
of receipt of the form must be contained in the buyer agency
agreement.
(D) A licensee who becomes
a disclosed dual agent shall provide to both buyer and seller an
agency disclosure form in accordance with Section 40-57-137
after buyer has completed and signed a buyer agency agreement
and seller has completed and signed a listing agreement.
Acknowledgement of receipt of the form by buyer and seller must
be contained in their separate agency agreements.
(E) A licensee who has
substantive contact with a potential buyer or seller shall
provide to the potential buyer or seller an agency disclosure
form at the first substantive contact. At the time of contact,
it is presumed that the potential buyer or seller is to be a
customer of the licensee as defined by this chapter and that the
licensee shall offer services to a customer as defined by
Section 40-57-137(O) only until the potential buyer or seller
requests representation; however, before ratification of the
real property sales agreement, the real estate licensee must
represent either the buyer or seller in an agency capacity in
order to be in compliance with this chapter.
(F) If first contact
occurs over the telephone or other electronic means, including
the Internet and electronic mail, a licensee shall provide a
buyer with the agency disclosure form at the first substantive
contact or a copy of the form may be sent by electronic means,
including the Internet and electronic mail.
(G) For all real estate
transactions, no agency relationship between a buyer, seller,
landlord, or tenant and a brokerage company and its affiliated
licensees exists unless the buyer, seller, landlord, or tenant
and the brokerage company and its affiliated licensees agree, in
writing, to the agency relationship. No type of agency
relationship may be assumed by a buyer, seller, landlord,
tenant, or licensee or created orally or by implication. A
licensee must not be considered to have an agency relationship
with a party or have agency obligations to a party but is
responsible only for exercising reasonable care in the discharge
of the licensee's specified duties, as provided in this chapter,
and, in the case of a client, as specified in the agency
agreement.
(H) If a licensee with an
existing or prior agency agreement with either a customer or a
client enters into a new agency agreement with the customer or
client, the licensee shall timely disclose that fact and the new
agency relationship to all licensees, customers, or clients
involved in the contemplated real estate transaction.
(I) The agency disclosure
requirements of this section do not apply if:
(1)
the transaction is regarding the rental or lease of residential
or commercial property;
(2)
the communication from the licensee is a solicitation of
business; or
(3)
the transaction is regarding the sale of property by auction.
Section
40-57-140. (A) A real
estate broker and all associated licensees owe no duty or
obligation to a client following termination, expiration,
completion, or performance of an agency agreement or closing of
the real property transaction, whichever occurs first, except
the duties of:
(1)
accounting in a timely manner for all money and property related
to and received during the relationship; and
(2)
keeping confidential all information received during the course
of the engagement which was made confidential by request or
instructions from the client, except as provided for in Sections
40-57-137(C)(6) and 40-57-137(H)(6) unless:
(a)
the client permits the disclosure by written agreement;
(b)
the disclosure is required by law; or
(c)
the information becomes public from a source other than the
broker.
(B) Notwithstanding
another provision to the contrary contained in this chapter, if
a conflict arises between a broker's duty to keep the confidence
of a client and the duty not to give customers false
information, the broker's duty not to give false information to
customers prevails and governs the broker's actions. No cause of
action arises on behalf of a person against a broker-in-charge
or affiliated licensees for revealing information in compliance
with this subsection.
(C) A broker-in-charge and
his affiliated licensees in the broker's main office may conduct
business with a previous client of the broker's branch offices
as a customer or client, so long as the branch offices have a
separate broker-in-charge and do not share the same
broker-in-charge as the main office.
Section
40-57-145. (A) In addition
to Section 40-1-110, the commission may deny issuance of a
license to an applicant or may take disciplinary action against
a licensee who:
(1)
makes a substantial misrepresentation involving a real estate
transaction;
(2)
makes false promises of a character likely to influence,
persuade, or induce;
(3)
pursues a continued and flagrant course of misrepresentation or
makes false and misleading promises through associated licensees
or through any medium of advertising or otherwise;
(4)
in the practice of real estate demonstrates bad faith,
dishonesty, untrustworthiness, or incompetency in a manner as to
endanger the interest of the public;
(5)
represents or attempts to represent a real estate broker other
than his broker-in-charge or property manager-in-charge without
the express knowledge and written consent of the employing
broker-in-charge or property manager-in-charge;
(6)
guarantees or authorizes and permits any associated licensee to
guarantee future profits from the resale of real estate;
(7)
makes a dual set of contracts, written or otherwise, by stating
a sales price higher than the actual sales price in an effort to
obtain a larger loan from a lender or lending institution or for
the purpose of misinforming a governmental agency or any other
reason;
(8)
is convicted of violating the federal and state fair housing
laws, forgery, embezzlement, breach of trust, larceny, obtaining
money or property under false pretense, extortion, fraud,
conspiracy to defraud, or has been convicted of a violent crime
as defined in Section 16-1-60, has been convicted during the
previous five years of a felony directly related to the practice
of the profession, or has been convicted during the previous
seven years of a felony, an essential element of which is
dishonesty, reasonably related to the practice of the
profession, or pleading guilty or nolo contendere to any such
offense in a court of competent jurisdiction of this State, any
other state, or any federal court;
(9)
fails to report to the department in writing by certified mail,
within ten days, notice of conviction of a crime provided for in
item (8);
(10)
fails, within a reasonable time, to account for or to remit any
monies coming into his possession which belong to others;
(11)
pays a commission or compensation to an unlicensed individual
for activities requiring a license under this chapter.
Notwithstanding this section, a licensee may not pay or offer to
pay a referral fee or finder's fee to an unlicensed individual
that is not a party in the real estate transaction;
(12)
violates any provision of law relating to a buyer's freedom of
choice in choosing an attorney, insurance agent, title insurance
agent, or any other service provider to facilitate the buyer's
real estate transaction;
(13)
fails to disclose in accordance with Section 40-57-139 the party
or parties for whom the licensee will be acting as an agent in a
real estate transaction;
(14)
receives compensation in a real estate transaction or directly
resulting from a real estate transaction from more than one
party except with the full knowledge and written consent of all
parties;
(15)
represents more than one party in a real estate transaction
without the full written knowledge and consent of all parties
the licensee represents as provided in Section 40-57-137(M);
(16)
acts in the dual capacity of agent and undisclosed principal in
a real estate transaction;
(17)
accepts deposit money which is to be delivered to the licensee's
principal in a real estate transaction without informing the
payor and having the payor acknowledge in writing who will hold
the money received by the licensee;
(18)
issues a check in connection with his real estate business which
is returned for insufficient funds or closed account;
(19)
fails to disclose in accordance with Section 40-57-137 any
material facts concerning a real estate transaction;
(20)
violates any provision of this chapter or a regulation
promulgated under this chapter;
(21)
violates a rule or order of the commission.
(22)
induces a party to break a contract of sale or lease, listing
agreement, or buyer agency agreement;
(23)
engages in a practice or takes action inconsistent with the
agency relationship that other real estate licensees have
established with their clients;
(24)
fails upon probable cause of an investigator of the commission
to make all records required to be maintained under this chapter
available to the commission for inspection and copying by the
commission or fails to appear upon probable cause for an
interview with an investigator of the commission.
(B) If after an
investigation, charges of a violation are brought against a
licensee, the broker-in-charge or property manager-in-charge
must be notified of the charges.
Section
40-57-150. (A)
Investigations must be conducted in accordance with Section
40-1-80 and must be performed by investigators who have
completed one hundred hours of training in programs that are
approved by the commission and provide instruction on real
estate principles, state statutory and regulatory law, and
investigative techniques.
(B) A restraining order
must be obtained in accordance with Section 40-1-100.
(C)(1) Whenever the
department has reason to believe that a violation of this
chapter has occurred, an investigation must be initiated within
thirty days.
(2)
The department shall conclude its investigation within one
hundred fifty days from receipt of the complaint or seek a
waiver of this period from the commission upon a showing of due
diligence and extenuating circumstances.
(3) A
hearing on the charges must be at the time and place designated
by the commission and must be conducted in accordance with the
Administrative Procedures Act.
(4)
The commission shall render a decision and shall serve, within
ninety days, notice, in writing, of the commission's decision to
the licensee charged. The commission also shall state in the
notice the date upon which the ruling or decision becomes
effective.
(5)
The department shall maintain a public docket or other permanent
record in which must be recorded all orders, consent orders, or
stipulated settlements.
(D) A licensee may
voluntarily surrender his license in accordance with Section
40-1-150.
(E)(1) The commission may
impose disciplinary action in accordance with Section
40-1-120.
(2)
Upon determination by the commission that one or more of the
grounds for discipline exists, as provided for in Section
40-1-110 or Section 40-57-140, the commission may impose a fine
of not less than one hundred or more than one thousand dollars
for each violation. The commission may recover the costs of the
investigation and the prosecution as provided for in Section
40-1-170.
(3)
Nothing in this section prevents a licensee from voluntarily
entering into a consent order with the commission wherein
violations are not contested and sanctions are accepted.
(F) The department
annually shall post a report that provides the data for the
number of complaints received, the number of investigations
initiated, the average length of investigations, and the number
of investigations that exceeded one hundred fifty days.
Section
40-57-170. (A) Service of a
notice provided for by law upon a nonresident licensed under
this chapter or upon a resident who, having been licensed,
subsequently becomes a nonresident or after due diligence cannot
be found at his usual abode or place of business in this State,
may be made by leaving with the Director of the Department of
Labor, Licensing and Regulation a copy of the notice, and
accompanying documents. A copy of the notice, any accompanying
documents, and a certified copy of the service on the director
must be mailed to the licensee at his last known address, return
receipt requested. The director shall keep a record of the day
of the service of the notice and the return receipt must be
attached to and made part of the return of service of the notice
by the commission.
(B) A continuance may be
given in a hearing under this chapter for which notice is given
pursuant to this section so as to afford the licensee a
reasonable opportunity to appear and be heard.
Section
40-57-180. (A) The
department may not be involved in the resolution of disputes
between licensees over the payment or division of
commission.
(B) A resident licensee
may pay a part of his commission on a cooperative basis to a
licensee of another state or jurisdiction if that licensee does
not conduct in this State any of the negotiations for which a
fee, compensation, or commission is paid.
(C) The department may
conduct periodic inspections of the offices of licensees in
order to assist with and to ensure compliance with this
chapter.
(D) It is the
responsibility of a licensee to keep on file with the department
a current mailing address.
(E) No cause of action may
arise against an owner of real estate or licensed real estate
agent of any party to a transaction for failure to disclose in a
transaction:
(1)
that the subject real estate is or was occupied by an individual
who was infected with a virus or any other disease which has
been determined by medical evidence as being highly unlikely to
be transmitted through occupancy of a dwelling place either
presently or previously occupied by the infected individual;
(2)
that the death of an occupant of a property has occurred or the
manner of the death;
(3)
any off-site condition or hazard that does not directly impact
the property being transferred; or
(4)
any psychological impact that has no material impact on the
physical condition of the property being transferred.
(F) Nothing in subsection
(E) precludes an action against an owner of real estate or agent
of the owner who makes intentional misrepresentations in
response to direct inquiry from a buyer or prospective buyer
with regard to psychological impacts, offsite conditions, or
stigmas associated with the real estate.
(G) The commission shall
establish and publish standards relevant to the approval and
conduct of education required by this chapter.
(1)
The department shall review, approve, and regulate education
courses required by this chapter and providers and instructors
of these courses including, but not limited to, accredited
colleges, universities, private business entities,
organizations, schools, associations, and institutions.
Notwithstanding another rule or regulation, all Certified
Commercial Investment Member (CCIM) designation courses approved
by the CCIM institute and all Graduate Realtor Institute (GRI)
designation courses approved by the National Association of
Realtors must be approved for post-licensing and continuing
education credit upon application accompanied by applicable
fees.
(2)
The department may deny, reprimand, fine, suspend, or revoke the
approval of an education provider or instructor if the
department finds that the education provider or instructor has
violated or failed to satisfy the provisions of this chapter or
the regulations and standards promulgated pursuant to this
chapter.
(3)
Application by providers seeking approval to offer and conduct
educational instruction or application by instructors must be
made on a form prescribed by the department and accompanied by
applicable fees not less than sixty days before a course
offering and must be approved by the department before the
commencement of any instruction. Instructors that hold the
Certified Commercial Investment Member (CCIM) designation
conferred by the CCIM Institute are approved for instruction in
all commercial real estate courses upon application accompanied
by the applicable fees.
(4)
If an application for provider, instructor, or course is not
approved, the reason must be detailed and the applicant must be
given thirty days to respond.
(5)
Upon approval, certificates must be issued to providers,
courses, and instructors to be renewed biennially.
(6)
Approved courses must be taught by approved instructors who are
qualified and have demonstrated knowledge of the subject matter
to be taught as well as the ability to teach.
(7)
Approved instructors shall attend instructor development
workshops sponsored by the department or provide evidence of
equivalent hours of continuing education that increases their
knowledge of the subject content in their area of expertise or
their teaching techniques.
(8)
The commission must allow for electronic delivery including, but
not limited to, the Internet, videoconference, or other
interactive electronic means, of all courses approved for
continuing education.
Section
40-57-190. Payment and
collection of costs associated with investigations and
prosecution of violations under this chapter must comply with
Section 40-1-170.
Section
40-57-200. Imposition and
collection of all costs and fines imposed pursuant to this
chapter must comply with Section 40-1-180.
Section
40-57-210. The provisions
of Section 40-1-190 pertaining to privileged communications,
whether written or oral, made by or on behalf of a person apply.
Section
40-57-220. (A) It is
unlawful for a person to act as a real estate broker, real
estate salesman, or property manager or to advertise or assume
to act as such without first having obtained a license issued by
the Real Estate Commission. A person violating this subsection
is guilty of a misdemeanor and, upon conviction, must be fined
not more than five hundred dollars or imprisoned for not more
than six months, or both.
(B) A real estate broker,
salesman, or property manager who fails to renew or register his
license annually and continues to engage in such business is
guilty of a misdemeanor and, upon conviction, must be fined not
more than five hundred dollars or imprisoned not more than six
months, or both.
Section
40-57-230. A civil action
may be brought for violations of this chapter as provided for
violations of Title 40, Chapter 1, Article 1 in accordance with
Section 40-1-210.
Section
40-57-240. This chapter
does not apply to:
(1) the sale, lease, or
rental of real estate by an unlicensed owner of real estate who
owns any interest in the real estate if the interest being sold,
leased, or rented is identical to the owner's legal
interest;
(2) an attorney at law
acting within the scope of his duties involved in the legal
representation of his client/owner;
(3) agencies and
instrumentalities of the state or federal government and their
employees acting within the scope of their official duties;
(4) foresters registered
under Chapter 27, Title 48, if the sale of any land is merely
incidental to the sale of timber on the land;
(5) court-appointed
receivers and trustees while acting within the scope of their
appointment.
Section
40-57-250. If a provision
of this chapter or the application of a provision of this
chapter to a person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of
this chapter which can be given effect without the invalid
provision or application, and to this end, the provisions of
this chapter are severable.
Section 40-57-5. Unless otherwise provided in this chapter, the provisions of Article 1, Chapter 1 apply to real estate brokers, salespersons, and property managers. The provisions of this chapter control when they conflict with the provisions of Article 1, Chapter 1.
Section 40-57-10. There is created the South Carolina Real Estate Commission under the administration of the Department of Labor, Licensing and Regulation. The purpose of this commission is to regulate the real estate industry so as to protect the public's interest when involved in real estate transactions.
Section 40-57-20. It is unlawful for an individual to act as a real estate broker, real estate salesperson, or real estate property manager or to advertise or provide services as such without an active, valid license issued by the commission.
Section 40-57-30.
For purposes of this chapter:
(1)
'Agent' means one authorized and empowered by a written
agency agreement to perform actions for a client. A real estate
brokerage firm is the agent of a buyer, seller, landlord, or
tenant, and the real estate brokerage firm's 'associated
licensees' are its subagents.
(2)
'Associated licensee' means a licensee affiliated with
and under the supervision of a broker-in-charge or property
manager-in-charge.
(3)
'Broker' means an associated licensee who has met the
experience and education requirements and has passed the
examination for a broker license and who, for a fee, salary,
commission, referral fee, or other valuable consideration, or
who, with the intent or expectation of receiving compensation:
(a)
negotiates or attempts to negotiate the listing,
sale, purchase, exchange, lease, or other disposition of real
estate or the improvements to the real estate;
(b)
auctions or offers to auction real estate in
accordance with Section 40-6-250;
(c)
for a fee or valuable consideration solicits a
referral;
(d)
offers services as a real estate consultant,
counselor, or transaction manager;
(e)
offers to act as a subagent of a real estate
brokerage firm representing a client in a real estate
transaction; or
(f)
advertises or otherwise represents to the public
as being engaged in any of the foregoing activities.
(4)
'Broker-in-charge' means a broker designated to have
responsibility over the actions of all associated licensees and
also has the responsibility and control over and liability for a
real estate trust account.
(5)
'Buyer agency' means a form of agency in which a real
estate brokerage firm represents the buyer in an agency capacity
as defined in this chapter.
(6)
'Client' means a person who enters a written agreement
establishing an agency relationship with a real estate brokerage
firm through its broker-in-charge, a property manager-in-charge,
or an associated licensee.
(7)
'Commission' means the South Carolina Real Estate
Commission and its members, who are charged by law with the
responsibility of licensing or otherwise regulating the practice
of real estate in the State of South Carolina.
(8)
'Conversion' means to use trust funds for a purpose
other than the purpose for which they are held. Conversion is a
breach of trust and is a crime as provided by law.
(9)
'Customer' means a buyer, seller, landlord, or tenant
who uses the services of a real estate licensee but does not
established an agency relationship through a written agency
agreement with the licensee's real estate brokerage firm.
(10)
'Department' means the Department of Labor, Licensing
and Regulation.
(11)
'Designated agency' means a form of agency in which two
clients represented by a real estate brokerage firm in the same
transaction may be given almost equivalent treatment as a single
agency.
(12)
'Dual agency' means a form of agency in which a real
estate brokerage firm with two clients in the same transaction
gives limited agency services.
(13)
'Email' means a system for sending and receiving a
message electronically over a computer network and a message
sent or received by the system.
(14)
'Licensee' means an individual currently licensed under
this chapter.
(15)
'Limited function referral office' means a brokerage
where the office policy allows only the placement of referrals
through the broker-in-charge.
(16)
'Material adverse fact' means:
(a)
a condition or occurrence that is generally
recognized as:
(i)
significantly and adversely
affecting the value of the real estate;
(ii)
significantly reducing the structural integrity
of improvements to real estate; or
(iii)
presenting a significant health risk to
occupants of the real estate; or
(b)
information that indicates that a party to a
transaction is not able to or does not intend to meet an
obligation under a contract or agreement made concerning the
transaction.
(17)
'Ministerial act' means an act performed by a licensee
not involving an exercise of discretion or judgment of a
licensee on behalf of a person who is not a client and that
assists the nonclient to consummate a real estate
transaction.
(18)
'Office' means the office location where a
broker-in-charge or a property manager-in-charge is licensed to
conduct real estate business.
(19)
'Personal trust account' means an escrow account or
demand deposit bank account properly designated and titled to
include the words 'trust' or 'escrow' that is established and
maintained by a licensee to safeguard funds belonging to parties
to a real estate transaction when the transaction involves the
licensee's personal real estate and the real estate is not
managed or listed through a real estate brokerage firm.
(20)
'Property manager' means an associated licensee who
meets educational requirements and passes the examination for a
property manager license, and who will for a fee, salary,
commission, other valuable consideration or with the intent or
expectation of receiving compensation:
(a)
negotiates or attempts to negotiate the rental
or leasing of real estate or improvements to the real estate;
(b)
lists or offers to list and provide a service in
connection with the leasing or rental of real estate or
improvements to the real estate; or
(c)
advertises or otherwise represents to the public
as being engaged in an activity in subitems (a) and (b).
(21)
'Property manager-in-charge' means a property manager
who is designated as having the responsibility over the actions
of associated licensees and also the responsibility and control
over and liability for real estate trust accounts.
(22)
'Real estate' means land, buildings, and other
appurtenances, including all interests in land, whether
corporeal, incorporeal, freehold, or nonfreehold, whether the
real estate is within or outside of the boundaries of this
State.
(23)
'Real estate brokerage' means the aspect of the real
estate business that involves activities relative to property
management or a real estate sale, exchange, purchase, lease.
(24)
'Real estate brokerage firm' means a real estate
company engaged in the business of real estate brokerage.
(25)
'Real estate transaction' means an activity involving
the sale, purchase, exchange, or lease of real estate.
(26)
'Salesperson' means an associated licensee who:
(a)
meets experience and education requirements;
(b)
passes an examination for a salesperson license;
and
(c)
engages in or participates in an activity
enumerated in item (3) for a fee, salary, commission, or other
valuable consideration, or with the intent or expectation of
receiving compensation.
(27)
'Seller agency' means a form of agency in which a real
estate brokerage firm represents the seller in an agency
capacity as defined in this chapter.
(28)
'Subagent' means an agent of an agent. An 'associated
licensee' is a subagent of the real estate brokerage firm if the
firm is an agent of a buyer, seller, landlord, or tenant.
(29)
'Substantive contact' means contact in which a
discussion or dialogue between the consumer and the associated
licensee moves from casual introductory talk to a meaningful
conversation regarding the selling or buying motives or
objectives of the seller or buyer, financial qualifications, and
other confidential information that if disclosed could harm the
consumer's bargaining position.
(30)
'Team' means two or more associated licensees working
together as a single unit within an office established with the
commission and supervised by a broker-in-charge.
(31)
'Trust account' means an escrow account or properly
designated demand deposit bank account that is:
(a)
properly designated and title to which includes
the words 'trust' or 'escrow'; and
(b)
established and maintained by a broker-in-charge
or a property manager-in-charge to safeguard funds belonging to
parties to a real estate transaction.
(32)
'Trust funds' means funds received on behalf of another
person by a licensee in the course of performing a real estate
activity.
(33)
'Transaction broker' means a real estate brokerage firm
that provides customer service to a buyer, a seller, or both in
a real estate transaction. A transaction broker may be a single
agent of a party in a transaction giving the other party
customer service. A transaction broker also may facilitate a
transaction without representing either party.
Section 40-57-40.
(A) The South Carolina Real
Estate Commission consists of ten members elected or appointed
as follows:
(1)
seven members who are professionally engaged in
the active practice of real estate, one elected from each
congressional district by a majority of house members and
senators representing the house and senate districts located
within each congressional district;
(2)
two members representing the public who are not
professionally engaged in the practice of real estate, each
appointed by the Governor with the advice and consent of the
Senate;
(3)
the elected and appointed members shall elect
from the State at large one additional member who must be in the
active practice of real estate.
(B) A
commission member serves a term of four years and until his
successor is elected or appointed and qualifies. A vacancy on
the commission must be filled in the manner of the original
election or appointment for the remainder of the unexpired term.
(C)
Before discharging of the duties of his office, a
member's election or appointment must be certified by the
Secretary of State, and the member shall, in writing, take an
oath to perform the duties of the office as a member of the
commission and to uphold the constitutions of this State and the
United States.
(D) The
term of a member commences on the date on which his election or
appointment is certified by the Secretary of State.
(E) A
member may be removed from office in accordance with Section
1-3-240.
Section 40-57-50. The commission annually shall elect from its total membership a chair, vice chair, and other officers the commission determines necessary at the first meeting in the fiscal year of the State. The commission may adopt an official seal and shall adopt rules and procedures reasonably necessary for the performance of its duties and the governance of its operations and proceedings.
Section 40-57-60.
(A) The commission shall
administer and enforce this chapter and regulations promulgated
under this chapter. In addition to powers contained in Section
40-1-70, the powers and duties include, but are not limited to:
(1)
determining the standards for the qualifications
and eligibility of applicants for licensure, the qualifications
of education providers and instructors, and the conditions for
license renewal;
(2)
conducting disciplinary hearings on alleged
violations of this chapter and regulations promulgated under
this chapter and deciding disciplinary actions as provided in
this chapter for those found to be in violation;
(3)
recommending changes in legislation and
promulgating regulations governing the real estate industry
relative to the protection, safety, and welfare of the public;
and
(4)
establishing a fee schedule.
(B) The
commission may not be involved in a resolution of disputes
between licensees over the payment or division of a commission
or fee.
(C) The
commission staff shall conduct periodic inspections of the
offices of licensees to assist with and ensure compliance with
this chapter.
Section 40-57-65. The commission shall submit an annual report in accordance with established guidelines to the department and the Chairs of the Senate Labor, Commerce and Industry Committee and House Labor, Commerce and Industry Committee.
Section 40-57-70.
(A) Fees relevant to the
licensure and regulation of real estate brokers, salespersons,
and property managers must be established in accordance with
Section 40-1-50(D) and promulgated by regulation prior to
implementation.
(B)
Application and license fees must be paid to the
commission in advance and must accompany an examination
application or a license application. An application fee is
nonrefundable.
(C)(1)
The department may allocate up to ten dollars of each
license renewal fee to the South Carolina Real Estate Commission
Education and Research Fund which is established as a separate
and distinct account within the Office of the State Treasurer.
The funds collected must be deposited in this account and used
exclusively for the:
(a)
advancement of education and research for the
benefit of those licensed under this chapter and for the
improvement and increased efficiency of the real estate industry
in this State;
(b)
analysis and evaluation of factors which affect
the real estate industry in this State; and
(c)
dissemination of the results of the research.
(2)
The commission annually by August first shall
submit a report on how the funds were expended for the preceding
fiscal year to the Chairs of the Senate Labor, Commerce and
Industry Committee and House Labor, Commerce and Industry
Committee.
Section 40-57-80.
Reserved.
Section 40-57-90.
An application for examination or licensure must be
made in writing on a form prescribed by the commission and must
be accompanied by all applicable fees.
Section 40-57-100. Reserved
Section 40-57-110.
(A) The commission shall
issue licenses in the classifications of broker,
broker-in-charge, or salesperson, to individuals who qualify
under and comply with the requirements of this chapter; provided
the commission may deny a license to an applicant it finds to
have engaged in misconduct as provided in Section 40-57-710 or
otherwise. No individual may be licensed in more than one
classification at the same time. The license must be in the form
and size as the commission prescribes and is not transferable.
(B) A
licensee may place a license on inactive status by informing the
commission in writing. To maintain an inactive license status,
the license must be renewed in the same manner as provided for
active license renewals. Upon proper compliance with the
renewal requirements, a license may remain on inactive status
for an indefinite period of time. An individual seeking to
reactivate a license shall apply for the same license
classification which was placed on inactive status, pay the
appropriate fee, and meet the continuing education requirements
as prescribed.
(C) A
license only may be renewed in accordance with procedures
established by the commission pursuant to Section 40-1-50 (D).
A licensee is responsible for renewing his license whether or
not he receives notice.
(D) A
license that is not renewed before its expiration date
lapses.
(E) A
license that has lapsed and is not reinstated by the last day of
the sixth month following expiration is canceled.
Section 40-57-115. In addition to other requirements established by law and for the purpose of determining an applicant's eligibility for licensure as a salesman, broker, broker-in-charge, property manager, and property manager-in-charge, the commission shall require initial applicants to submit to a state criminal records check, by a source approved by the commission, and a national criminal records check. Costs of conducting a criminal records check must be borne by the applicant. The commission shall keep information received pursuant to this section confidential, except that information relied upon in denying licensure may be disclosed as necessary to support the administrative action.
Section 40-57-120.
(A) The commission may
recognize nonresident real estate licenses on active status from
other jurisdictions only if the other jurisdiction recognizes
South Carolina real estate licenses on active status. An
applicant from another jurisdiction successfully shall complete
the state portion of the applicable examination before license
recognition will be acknowledged.
(B) A
nonresident licensee, acknowledged by the commission, is not
required to maintain a place of business in this State if the
nonresident maintains an active place of business in the state
of residence. A nonresident applicant shall file an irrevocable
consent that suits and actions may be commenced against him in
the proper court in a judicial circuit of the state in which a
cause of action may arise or in which the plaintiff may reside.
(C)(1) A
resident licensee who becomes a nonresident must notify the
commission in writing, within thirty days, of the change in
residency and comply with nonresident requirements or place his
license on inactive status to avoid cancellation of the license.
(2)
A nonresident licensee who becomes a resident of
South Carolina must notify the commission in writing, within
thirty days, of the change in residency and comply with the
requirements of this chapter or place his license on inactive
status to avoid cancellation of the license.
(3)
Failure to timely notify the commission of a
change in residency and compliance to comply with the
requirements of this subsection are violations of this chapter
subject to penalties provided in Section 40-57-710.
(D) A
nonresident applicant or licensee must comply with all
requirements of commission regulations and of this chapter. The
commission may adopt regulations necessary for the regulation of
nonresident licensees.
(E) A
resident licensee may pay a part of his commission as a referral
fee on a cooperative basis to a brokerage of another state or
jurisdiction if that brokerage's license does not conduct, in
this State, a real estate brokerage service for which a fee,
compensation, or commission is paid.
Section 40-57-135.
(A) A broker-in-charge or
property manager-in-charge shall:
(1)
adequately supervise employees or associated
licensees to ensure their compliance with this chapter;
(2)
review and approve all forms of listing
agreements, agency agreements, offers, sale contracts, purchase
contracts, leases, options, contract addenda, or other
contractual or disclosure documents routinely used by the real
estate brokerage firm;
(3)
maintain adequate, reasonable, and regular
contact with associated licensees engaged in real estate
transactions so as to prevent or curtail practices by a licensee
which would violate any provision of this chapter, Chapter 1,
Title 40, the Interstate Land Sales Practices Act, or the
Vacation Time Sharing Plans Act;
(4)
be available to the public during business hours
in order to discuss or resolve complaints and disputes that
arise during the course of real estate transactions in which the
broker-in-charge or property manager-in-charge or an associated
licensee is involved;
(5)
establish and maintain a written office policy
in accordance with Section 40-57-510 (B) and make that policy
readily accessible to associated licensees;
(6)
ensure that all associated licensees have an
active real estate license;
(7)
establish and maintain control of and
responsibility for an active trust account when in possession of
trust funds belonging to others resulting from a real estate
transaction; and
(8)
notify the commission by mail within ten days of
any change of office name, address, email address, or telephone
number.
(B) An
associated licensee may not receive compensation from an
activity requiring a real estate license from an entity or
person other than the one for which the license is issued. An
associated licensee may form a business entity allowing the
licensee's broker-in-charge or property manager-in-charge to pay
fees or commissions to that entity if the principals in that
entity hold an active real estate license.
(C)(1) A
licensed broker-in-charge or property manager-in-charge shall
establish and maintain a specific office location which must be
accessible by the public, investigators, and inspectors during
reasonable business hours.
(2)
A broker-in-charge or property manager-in-charge
may maintain one or more offices at a different locations. Each
office must be managed by a broker-in-charge or property
manager-in-charge who is licensed for that real estate brokerage
firm's location. The same person may request to be licensed as
broker-in-charge or property manager-in-charge of more than one
office if the broker-in-charge or property manager-in-charge
making the request acknowledges in writing that the applicant
understands the duties and can fully assume the responsibility
to ensure compliance with this chapter.
(3)
A licensee may not conduct real estate business
under another name or at an address other than the one for which
his license is issued.
(4)
In the event of the medical incapacitation of a
broker-in-charge or property manager-in-charge which precludes
him from carrying out the duties of a broker-in-charge or
property manager-in-charge as required in this chapter, or in
the event of the death of a broker-in-charge or a property
manager-in-charge, the department may permit an associated
licensee to act as broker-in-charge or property
manager-in-charge for up to six months.
(D)(1) A
broker-in-charge or property manager-in-charge shall for a
minimum of five years maintain and furnish to the commission
upon request a written copy, when applicable, of a:
(a)
lease;
(b)
contract of sale and any addenda;
(c)
listing contract or buyer agency agreement;
(d)
transaction broker agreement;
(e)
option contract;
(f)
property management agreement; and
(g)
residential property disclosure form.
(2)
These records may be maintained electronically
as long as a backup copy is stored in a separate, off-site
location including, but not limited to, electronic and Internet,
cloud-based storage systems.
(E)(1) A
licensee may not advertise, market, or offer to conduct a real
estate transaction involving real estate owned, in whole or in
part, by another person without first obtaining a written
listing agreement between the property owner and the real estate
brokerage firm with whom the licensee is associated.
(2)
When advertising or marketing real estate owned,
in whole or in part, by another person in any medium, including
site signage, a licensee clearly must identify the full name of
the real estate brokerage firm with which the licensee is
associated. When advertising on the Internet or in another
electronic media, this requirement may be met by including a
link from the advertisement to the homepage of the brokerage
firm.
(3)
If a real estate brokerage firm operates under a
trade or franchise name, the identity of the franchisee or
holder of the trade name clearly must be revealed.
(F)(1) A
licensee clearly shall reveal his license status in a personal
transaction involving the purchase, sale, exchange, rental,
lease, or auction of real estate at first substantive contact
with a consumer and in advertising or marketing in any media. A
licensee also shall disclose his licensed status in bold
underlined capital letters on the first page of a contract for
the purchase, sale, exchange, rental, or lease of real property.
(2)
Trust funds received in a licensee's personal
rental or transaction must be deposited in the licensee's
personal trust account and may not be deposited in the real
estate brokerage firm's trust account unless the real property
is managed, listed, or owned by the real estate brokerage
firm.
(G) No
licensee either directly or indirectly may buy for his own
account or for a corporation or another business in which he
holds an interest or for a close relative, real estate listed
with him or real estate for which he has been approached by the
seller or prospective buyer to act as agent, without first
making his true position clearly known in writing to all parties
involved. Upon request of the department, the licensee shall
provide evidence of having made this disclosure.
(H) With regard to offers to
purchase real estate, a licensee shall:
(1)
upon receipt, prepare all offers in writing and
promptly present them to the seller;
(2)
upon obtaining a written acceptance of an offer,
promptly deliver true, executed copies to all parties;
(3)
ensure that all of the terms and conditions of
the transaction are included in the offer to purchase; and
(4)
ensure that changes or modifications made during
negotiation are in writing and initialed and dated by both
parties before proceeding with the transaction.
(I)(1) A
licensee shall properly complete an agency agreement,
transaction broker agreement, offer, and counteroffer.
(2)
A listing or buyer's representation agreement
must be in writing and must set forth all material terms of the
parties' agency relationship including, but not limited to:
(a)
a description of the agent's duties or services
to be performed for the client including, but not limited to, an
explanation of the office policy regarding dual agency,
designated agency, and transaction brokerage if offered by the
real estate brokerage firm;
(b)
the amount of compensation to be paid if a flat
fee or the method to be used in calculating the amount of
compensation to be paid;
(c)
an explanation of how and when compensation is
earned;
(d)
an explanation of how compensation will be
divided among participating or cooperating brokers, if
applicable;
(e)
the amount of retainer fees, deposits, or any
other money collected before the agent's performance of a
service on behalf of the client and an explanation of
conditions, if any, in which such monies are refundable or
payable to or on behalf of the client;
(f)
the duration of the agency relationship, setting
forth specific dates for the beginning and ending of the
relationship;
(g)
the signature of all parties;
(h)
a listing agreement or buyer's representation
agreement clearly must state that it terminates on the definite
expiration date unless a written extension is signed;
(i)
a listing agreement or
buyer's representation agreement clearly must state, if
applicable, that it is either an 'exclusive agency' listing or
buyer's representation agreement or 'exclusive right to
represent' listing contract or 'exclusive right to represent'
buyer's representation contract;
(j)
a listing agreement or
buyer's representation agreement must clearly specify an
exception or variation in an amount of commission to be paid and
circumstances that would apply;
(k)
a copy of the listing or buyer's representation
agreement must be given to the seller or buyer at the time of,
or directly following, signing; and
(l)
a buyer's representation
agreement must provide an adequate property description of the
type of property of interest to the buyer and a price or price
range for property of interest to the buyer. A listing
agreement must have a legal description of the listed property
or a description sufficient to identify the listed property and
state the price of the listed property.
(3)
If there are no clients involved in the
transaction, a real estate brokerage firm acting as a
transaction broker shall complete a compensation agreement to be
signed by the agent and the compensating party. This agreement
must contain the amount of the compensation and identify the
party responsible for payment.
(4)
The broker-in-charge shall ensure that
associated licensees prepare all offers and counteroffers in
writing, have them dated and signed by the offerors, and
promptly present them to the offerees or the offerees'
representative and ensure that:
(a)
changes or modifications made during
negotiations are in writing and initialed and dated by both
parties before proceeding with the transaction;
(b)
all of the terms and conditions of the
transaction are included in the offer to purchase; and
(c)
if associated licensees obtain a written
acceptance of an offer or counteroffer, true, executed copies
will be promptly delivered to all parties.
(5)
If an offer is rejected without counter, an
offer rejection form, promulgated by the commission, signed by
the licensee affirming presentation of the offer must be
provided to the offeror by the licensee, whether the agent of
the buyer, the seller, or if acting as a transaction broker.
(6)
An offer and counteroffer may be communicated by
use of a fax or other secure electronic means including, but not
limited to, the Internet, and the signatures, initials, and
handwritten or typewritten modifications to the foregoing
documents are considered valid and binding upon the parties as
if the original signatures, initials, and handwritten, or
typewritten modifications were present on the documents in the
handwriting of each party.
(7)
If a licensee wishes to purchase real estate
listed with his brokerage firm, the broker-in-charge shall
ensure that the licensee shall first make his true position
clearly known in writing to all parties involved. Upon request
of the commission, the broker-in-charge shall provide evidence
of the licensee having made this disclosure, including:
(a)
purchases made directly or indirectly by the
licensee;
(b)
purchases made for the licensee's own account or
for a corporation or another business in which the licensee
holds an interest or purchases made for a close relative;
and
(c)
real estate for which the licensee has been
approached by the seller or prospective buyer to act as
agent.
(8)
In order for a real estate brokerage firm to
claim a fee for the sale of a listed property to an associated
licensee, a separate written agreement signed by the seller
client must acknowledge the purchaser as a licensee affiliated
with the real estate brokerage firm and recognize the right of
the seller to not pay the brokerage fee.
(J) A
real estate brokerage firm shall manage residential and
commercial property under a written management agreement that
shall set forth, at a minimum:
(1)
the names and signatures of authorized parties
to the agreement;
(2)
the property identification;
(3)
the method of compensation to the licensee;
(4)
that a management agreement may not contain an
automatic renewal clause or provision unless the management
agreement also contains a clause or provision that allows either
party to cancel the management agreement for any cause or no
cause with thirty days' notice after the original definite
expiration date;
(5)
compensation for a future lease renewal by
tenants, and if included, the contract must contain a clause in
underlined capital letters on the first page providing for such
future compensation; and
(6)
terms and conditions of tenant rental or lease
arrangements. However, a management agreement may not contain a
provision binding the property under a future listing agreement
if the property is to be sold in the future, in which case a
separate listing agreement is required.
(K) For
all types of real estate transactions, including leases and
sales, an unlicensed employee of the owner or an unlicensed
individual working under the supervision of a broker-in-charge
or a property manager-in-charge may not:
(1)
discuss, negotiate, or explain a contract,
listing agreement, buyer agency agreement, lease, agreement,
property management agreement, or other real estate document;
(2)
vary or deviate from the rental price or other
terms and conditions previously established by the owner or
licensee when supplying relevant information concerning the
rental of property;
(3)
approve applications or leases or settle or
arrange the terms and conditions of a lease;
(4)
indicate to the public that the unlicensed
individual is in a position of authority which has the
managerial responsibility of the rental property;
(5)
conduct or host an open house or manage an
on-site sales or leasing office;
(6)
show real property for sale other than vacant
units in a multifamily building;
(7)
answer questions regarding company listings,
title, financing, and closing issues, except for information
that is otherwise publicly available;
(8)
be paid solely on the basis of real estate
activity including, but not limited to, a percentage of
commission or an amount based on the listing or sales
compensation or commission;
(9)
negotiate or agree to compensation or commission
including, but not limited to, commission splits, management
fees, or referral fees on behalf of a licensee; or
(10)
engage in an activity requiring a real estate
license as required and defined by this chapter.
(L) A
licensee is not required to maintain records of communications
that are not designated to be retained or to create a permanent
record such as text messages, instant messaging system-formatted
messages, voicemail, voice recordings, or social media posts.
Section 40-57-136.
(A)(1) A broker-in-charge or
a property manager-in-charge, when taking possession of trust
funds, shall establish and maintain control of and
responsibility for an active real estate trust account which
must be a demand deposit account designated and titled to
include the word 'trust' or the word 'escrow' in the name of the
real estate brokerage firm for which the respective
broker-in-charge's or property manager-in-charge's license is
issued; provided, however that one central trust account may be
used by real estate brokerage firms with multiple offices
managed by:
(a)
one broker-in-charge or one property
manager-in-charge; and
(b)
separate brokers-in-charge or separate property
managers-in-charge.
(2)
A broker-in-charge and a property
manager-in-charge shall maintain records which reflect the
transactions in his office.
(3)
A trust account maintained by a broker-in-charge
or property manager-in-charge must be a demand deposit account
located in an insured financial institution authorized to
conduct business in South Carolina.
(4)
A broker-in-charge or property manager-in-charge
shall instruct employees and associated licensees on the proper
handling of trust funds.
(5)
A check or statement issued in connection with a
real estate trust account must reflect the title and designation
of the account as provided in item (1).
(B)(1)A broker-in-charge or property
manager-in-charge shall ensure that accurate and complete
records, as required by this chapter, are maintained for real
estate trust accounts.
(2)
A broker-in-charge or property manager-in-charge
shall ensure that backup copies are maintained for computerized
real estate trust accounts. A backup copy must be maintained on
a data storage medium that is stored in a separate off-site
location.
(3)
A broker-in-charge or property manager-in-charge
may not commingle trust funds of the client with his own money,
except that he may maintain a clearly identified amount of the
company's funds in the trust account to cover bank service
charges or in order to avoid the closing of the account when no
client's trust funds are on deposit.
(4)
Trust funds received by a licensee in connection
with a real estate transaction in which the licensee is engaged
for the broker-in-charge or property manager-in-charge must be
delivered to the broker-in-charge or property manager-in-charge
no later than the following business day.
(5)
A broker-in-charge or property manager-in-charge
who disburses trust funds contrary to the terms of the contract
or fails to disburse trust funds not in dispute is considered to
have demonstrated incompetence to act as a broker-in-charge or
property manager-in-charge.
(C)(1)(a)
Except as provided in subitem (b), trust funds received
by a broker-in-charge or property manager-in-charge in a real
estate rental or lease transaction must be deposited as follows
in a real estate trust account as follows:
(i)
cash or certified funds
must be deposited within forty-eight hours of receipt, excluding
Saturday, Sunday, and bank holidays; and
(ii)
checks must be deposited within forty-eight
hours after a lease or rental agreement is signed by the parties
to the transaction, excluding Saturday, Sunday, and bank
holidays.
(b)
Rent received by a licensee who is directly
employed by the owner of rental property may be deposited in an
operating or other similar account, but otherwise must be
properly accounted for as provided in this section. However, an
advance rental deposit is a trust fund and must be treated as
such.
(2)
Trust funds received by a broker-in-charge or
property manager-in-charge in connection with a real estate
rental or lease including, but not limited to, security
deposits, pet deposits, damage deposits, and advance rentals,
except earned rental proceeds, and deposited in the trust
account must remain in the trust account until the lease or
rental transaction expires or is terminated, at which time
undisputed trust funds must be disbursed pursuant to the
contract which directs the broker-in-charge or property
manager-in-charge to hold the trust funds, and a full accounting
must be made to the landlord or tenant as appropriate. Earned
rental proceeds must be disbursed to the landlord within a
reasonable time after clearance of the deposit by the bank.
(D)(1)(a)
Trust funds received by a broker-in-charge in a real
estate sales or exchange transaction must be deposited as
follows in a separate real estate trust account:
(i)
cash or certified funds
must be deposited within forty-eight hours of receipt, excluding
Saturday, Sunday, and bank holidays;
(ii)
checks must be deposited within forty-eight
hours after written acceptance of an offer by the parties to the
transaction, excluding Saturday, Sunday, and bank holidays;
(b)
Trust funds received by a broker-in-charge in
connection with a real estate sales or exchange transaction and
deposited in the real estate trust account shall remain in the
trust account until consummation or termination of the
transaction, at which time the undisputed trust funds must be
disbursed in accordance with the contract which directs the
broker-in-charge to hold the trust funds, and a full accounting
must be made to the parties.
(2)
A broker-in-charge or property manager-in-charge
who disburses trust funds from a designated trust account under
the following circumstances is considered to have properly
fulfilled the duty to the account:
(a)
upon rejection of an offer to buy, sell, rent,
lease, exchange, or option real estate;
(b)
upon the withdrawal of an offer not yet accepted
by the offeree; or
(c)
at the closing of the transaction.
(E) If a
dispute concerning the entitlement to, and disposition of, trust
funds arises between a buyer and a seller, and the dispute is
not resolved by reasonable interpretation of the contract by the
parties to the contract, the deposit must be held in the trust
account until the dispute is resolved by:
(1)
a written agreement which:
(a)
directs the disposition of monies signed by all
parties claiming an interest in the trust monies, and
(b)
must be separate from the contract which directs
the broker-in-charge or property manager-in-charge to hold the
monies;
(2)
filing an interpleader action in a court of
competent jurisdiction;
(3)
an order of a court of competent jurisdiction;
or
(4)
voluntary mediation.
(F)(1)
Records required by this chapter must be maintained for
a minimum of five years and the broker-in-charge or property
manager-in-charge shall furnish a copy of the records to a
representative of the commission upon request. Accounting
records that may be requested include, but are not limited to,
journals, ledgers, folios, client subaccounts, tenant accounts,
canceled checks, deposit slips, and bank statements.
(2)
Brokers-in-charge or property
managers-in-charge, when required by this chapter to establish
and maintain a real estate trust account, also shall maintain,
in their designated principal place of business, a recordkeeping
system consisting of:
(a)
a journal or an accounting system that records
the chronological sequence in which funds are received and
disbursed for real estate sales. For funds received, the
journal or accounting system must include the date of receipt,
the name of the party from whom the money was received, the name
of the principal, identification of the property, the date of
deposit, the depository, the payee, and the check numbers,
dates, and amounts. A running balance must be maintained for
each entry of a receipt or disbursement. The journal or
accounting system must provide a means of reconciling the
accounts;
(b)
a journal or an accounting system containing,
for property management, the same information as stated in
subitem (a) except that the required running balance may be
determined at the time of reconciliation;
(c)
a separate record for each tenant identifying
the unit, the unit owner, amount of rent, due date, security
deposit, and all receipts with dates when managing property. An
owner's ledger also must be maintained for all properties owned
by each owner showing receipts and disbursements applicable to
each property managed. A disbursement must be documented by a
bid, contract, invoice, or other appropriate written memoranda;
(d)
a trust account deposit document must identify
the buyer or tenant unless other appropriate written memoranda
are maintained;
(e)
a general ledger identifying security deposits;
(f)
a monthly reconciliation of each separate
account except when no deposit or disbursement is made during
that month. The reconciliation must include a written worksheet
comparing the reconciled bank balance with the journal balance
and with the ledger total to ensure agreement.
(G) Trust
funds received by a broker-in-charge or property
manager-in-charge which must be deposited in a trust account may
be deposited in an interest-bearing account. Interest earned on
these trust funds may be retained by the broker-in-charge or
property manager-in-charge if:
(1)
the depositors or owners of the trust funds have
been informed of their right to ownership of the interest but
relinquish the right of ownership to the broker-in-charge or
property manager-in-charge by written agreement; and
(2)
the agreement, if part of a preprinted form,
uses conspicuous language.
Section 40-57-240.
This chapter does not apply to:
(1) the
sale, lease, or rental of real estate by an unlicensed owner of
real estate who owns any interest in the real estate if the
interest being sold, leased, or rented is identical to the
owner's legal interest;
(2) an
attorney at law acting within the scope of his duties involved
in the legal representation of a client/owner;
(3)
agencies and instrumentalities of the state or federal
government and their employees acting within the scope of their
official duties;
(4)
foresters registered under Chapter 27, Title 48, if the
sale of any land is merely incidental to the sale of timber on
the land; or
(5)
court-appointed receivers and trustees while acting
within the scope of their appointment.
Section 40-57-310.
To be eligible for licensure as a real estate broker,
broker-in-charge, or sales person, an applicant must:
(1)
attain the age of twenty-one if applying for a license
as a broker or broker-in-charge;
(2)
attain the age of eighteen if applying for a license as
a salesperson;
(3)
provide a physical address at which the licensee can be
contacted in the course of an investigation. A licensee shall
maintain on file with the commission his current contact
information for his residential address, mailing address, email
address, and telephone number. Failure to update this contact
information within thirty days after a change may result in an
administrative suspension of the property manager, salesperson,
broker, or broker-in-charge pursuant to Section 40-57-710;
(4)
graduate from high school or hold a certificate of
equivalency recognized by the State Department of Education;
(5)
submit proof of completion of education to the
commission and, if applicable, experience requirements as
specified in this chapter;
(6)
submit to criminal background check as provided in
Section 40-57-115 for initial application; and
(7) pass
the applicable examination.
Section 40-57-320.
(A) As a condition for and
before applying to the commission for licensure, an applicant
for a salesperson, broker, or broker-in-charge license shall
provide proof to the commission of having met the following
educational requirements, in addition to the other requirements
of this chapter:
(1)
for a salesperson license:
(a)
completion of sixty hours of classroom
instruction in fundamentals of real estate principles and
practices and thirty hours of classroom instruction in advanced
real estate principles within five years before the application,
provided an applicant may take the license examination before
completing the required thirty hours of advanced instruction;
or
(b)
evidence of holding a juris doctor degree, a
bachelor of law degree, a baccalaureate degree or a master's
degree with a major in real estate from an accredited college or
university, or completion of another course of study approved by
the commission; and
(2)
for a broker license:
(a)
completion of one hundred fifty hours of
commission-approved real estate classroom instruction, ninety of
which may be the hours required for a salesperson license, to
include completion of the thirty hour Unit III A Broker
Management and of the thirty hour Unit III B Brokerage
Principles courses in advanced real estate principles and
practices and three years active salesperson licensure within
the past five years; or
(b)
evidence of holding a juris doctor degree, a
bachelor of laws degree, a baccalaureate degree or a master's
degree with a major in real estate from an accredited college or
university.
(B)(1) As
a condition of licensure, an applicant shall submit to an
examination which must be conducted by the commission or a
designated test provider at a time and place specified by the
commission.
(2)
The applicant must receive a passing grade on
the examination, in accordance with a cut-score determination or
a raw-score determination established by the commission.
(3)
An applicant who applies to take the examination
is granted a twelve-month eligibility period to complete
successfully all portions of the examination. An applicant who
fails to complete successfully the examination may reapply to
become eligible for the examination if applicable qualifying
courses were completed fewer than five years before applying for
the examination.
(4)
An applicant who passes the examination must
apply for a license within one year, or the applicant must
reapply and retake the examination.
(5)
An applicant who is denied licensure by the
commission may not reapply for licensure for a period of
twenty-four months from the date of denial unless he prevails in
appealing the denial pursuant to the Administrative Procedures
Act.
(6)
A nonresident individual who, at the time of
application, holds an active real estate license in another
state or jurisdiction or whose real estate license in another
state or jurisdiction expired not more than six months before he
makes his application only is required to pass the state portion
of the examination to qualify for licensure.
(C) The
commission or test provider may collect and retain reasonable
examination fees. An applicant for an examination to be
conducted by a test provider shall pay the fee directly to the
test provider.
Section 40-57-330.
(A) A broker-in-charge
license may not be issued to or renewed for an applicant unless
the applicant:
(1)
has an ownership interest in the applicant's
company; or
(2)
is actively engaged in the operation and
management of the company.
(B) An
individual holding an active broker or salesperson license must
be licensed under a broker-in-charge who is licensed by the
commission and may not be licensed during the same period with
more than one broker-in-charge. When a licensee becomes
disassociated with a broker-in-charge, he immediately shall
notify the commission by completion of the proper form. The
licensee must furnish a new business address to the commission,
the authorization of the new broker-in-charge, and proof of
notification to the former broker-in-charge.
Section 40-57-340.
(A) As a condition of active
license renewal:
(1)
A broker or salesperson shall provide proof of
satisfactory completion biennially of ten hours of continuing
education in courses. The ten hours must include a minimum of
four hours of instruction in mandated topics.
(2)
A broker-in-charge shall provide proof of
satisfactory completion biennially of ten hours of continuing
education in courses approved by the commission. The ten hours
must include a minimum of four hours of instruction in mandated
topics for a broker or salesperson license and four hours of
continuing education must be in advanced real estate topics
designed for brokers-in-charge.
(3)
A license must be renewed biennially coinciding
with the licensees' continuing education deadline.
Approximately one-half of the licensees must renew in
even-numbered years and the remainder in odd-numbered years.
(B)
Exempt from the biennial continuing education required
by subsection (A) are a:
(1)
salesperson who successfully completes a
post-licensing course or takes a broker course is exempt for the
renewal period during which the course was taken;
(2)
licensee while on inactive status;
(3)
nonresident broker or salesperson who has
successfully satisfied the continuing education requirements in
their jurisdiction of residence may be exempt with approval of
the commission; or
(4)
broker or salesperson with a minimum of
twenty-five years of licensure may apply to be granted an
experience-based partial continuing education waiver, and upon
granting of the waiver, is required to complete only the
mandatory four hour core course biennially to maintain active
licensure. A broker-in-charge who has been granted a partial
continuing education waiver is required to take the four hour
core course and the mandated four hour broker-in-charge course
biennially. A licensee who previously has been granted a full
continuing education waiver by the commission is exempt from the
continuing education requirements of this chapter.
(C) A
broker or salesperson who takes more than the required number of
hours during a two-year period may not carry forward any excess
hours to another renewal period.
(D) A
broker or salesperson who fails to complete the continuing
education requirements of this section by the date of license
renewal may renew by submitting applicable fees but immediately
must be placed on inactive status. The license may be
reactivated upon proof of completion of required continuing
education and payment of applicable fees.
(E) In
accordance with regulations, providers electronically shall
transmit to the commission student continuing education and
qualifying course records. The commission shall maintain an
accurate and secure database of student records.
(F) A
pre-licensing and continuing education course is eligible for
distance learning. Certification by the Association of Real
Estate License Law Officials (ARELLO) or its subsidiary, the
International Distance Education Certification Center (IDECC),
is required.
(G) The
commission shall qualify for continuing education credit
designation and certification programs of nationally recognized
real estate organizations and associations. The commission may
qualify for continuing education credit other than courses
currently approved for continuing credit including, but not
limited to, courses offered by the South Carolina Bar
Association, South Carolina Forestry Board, and the South
Carolina Appraisers Board.
(H)
Notwithstanding another provision of law, the
commission shall qualify for continuing education credit courses
that are related to real estate technology, professional
development and business ethics.
Section 40-57-350.
(A) A real estate brokerage
firm that provides services through an agency agreement for a
client is bound by the duties of loyalty, obedience, disclosure,
confidentiality, reasonable care, diligence, and accounting as
set forth in this chapter. The following are the permissible
brokerage relationships a real estate brokerage firm may
establish:
(1)
seller agency;
(2)
buyer agency;
(3)
disclosed dual agency;
(4)
designated agency; or
(5)
transaction brokerage.
(B) The
broker-in-charge of a real estate brokerage firm shall adopt a
written company policy that identifies and describes the types
of real estate brokerage relationships in which associated
licensees may engage, including teams and limited function
referral offices. The written policy must include:
(1)
the real estate brokerage firm's policy
regarding cooperation with transaction brokers, or both buyer
agents, and transaction brokers, and whether the broker offers
compensation to these licensees;
(2)
the scope of services provided to the real
estate brokerage firm's clients;
(3)
the scope of services provided to the real
estate brokerage firm's customers;
(4)
when and how associated licensees shall explain
and disclose their brokerage relationships with an interested
party to a potential transaction. The explanation and disclosure
shall always comply with the minimum requirements set forth in
this chapter;
(5)
when and how an associated licensee shall
explain the potential for the licensee to later act as a
disclosed dual agent, designated agent or transaction broker in
specific transactions, as permitted by this chapter; and
(6)
the real estate brokerage firm's policy on
compliance with state and federal fair housing laws.
(C)(1) On
reaching a written agency agreement to provide brokerage
services for a seller of real estate, a seller's agent shall:
(a)
perform the terms of the written brokerage
agreement made with the seller;
(b)
pursuant to subsection (A), promote the interest
of the seller by performing agency duties which include:
(i)
seeking a sale at the price
and terms stated in the brokerage agreement or at a price and
terms acceptable to the seller, except that the real estate
brokerage firm is not obligated to seek additional offers to
purchase unless the brokerage agreement provides otherwise while
the property is subject to a contract of sale;
(ii)
presenting in a timely manner all written offers
and counteroffers to and from the seller, even when the property
is subject to a contract of sale;
(iii)
disclosing to the seller all material
adverse facts concerning the transaction which are actually
known to the seller's agent except as directed otherwise in this
section;
(iv)
advising the seller to obtain expert advice on
matters that are beyond the expertise of the licensee; and
(v)
accounting in a timely manner, as required by
this chapter, for all money and property received in which the
seller has or may have an interest;
(c)
exercise reasonable skill and care in
discharging the licensee's agency duties;
(d)
comply with all provisions of this chapter and
with regulations adopted by the commission;
(e)
comply with all applicable federal, state, or
local laws, rules, regulations, and ordinances related to real
estate brokerage, including laws which relate to fair housing
and civil rights;
(f)
preserve confidential information provided by
the seller during the course of and following the agency
relationship that might have a negative impact on the seller's
real estate activity unless:
(i)
the seller to whom the
confidential information pertains grants written consent to
disclose the information;
(ii)
disclosure is required by law; or
(iii)
disclosure is necessary to defend the
licensee against an accusation of wrongful conduct; or
(iv)
the information becomes public from a source
other than the broker.
(2)
No cause of action may arise against a licensee
for disclosing confidential information in compliance with
subitem (f) of item (1).
(D) A
licensee acting as a seller's agent may offer alternative
properties to prospective buyers. A licensee acting as a
seller's agent also may list for sale competing properties.
(E)(1) On
reaching a written agency agreement to provide brokerage
services to a potential buyer of real estate, a buyer's agent
shall:
(a)
perform the terms of the written brokerage
agreement made with the buyer;
(b)
in accordance with subsection (A), promote the
interest of the buyer by performing the buyer's agent's duties
which include:
(i)
seeking the type of
property at the price and terms stated in the brokerage
agreement or at a price and terms acceptable to the buyer,
except that the licensee is not obligated to seek additional
properties unless the brokerage agreement provides otherwise for
a buyer once the buyer becomes a party to a contract of sale;
(ii)
presenting in a timely manner all written offers
and counteroffers to and from the buyer;
(iii)
disclosing to the buyer all material
adverse facts concerning the transaction which are actually
known to the licensee except as directed otherwise in this
section. Nothing in this chapter may limit a buyer's obligation
to inspect the physical condition of the property which the
buyer may purchase;
(iv)
advising the buyer to obtain expert advice on
material matters that are beyond the expertise of the licensee;
and
(v)
accounting in a timely manner, as required by
this chapter, for all money and property received in which the
buyer has or may have an interest;
(c)
exercising reasonable skill and care in
discharging the buyer's agent's agency duties;
(d)
complying with all provisions of this chapter
and with regulations promulgated by the commission;
(e)
complying with all applicable federal, state, or
local laws, rules, regulations, and ordinances related to real
estate brokerage, including laws which relate to fair housing
and civil rights;
(f)
preserving confidential information provided by
the buyer during the course of or following the agency
relationship that might have a negative impact on the buyer's
real estate activity unless:
(i)
the buyer to whom the
confidential information pertains, grants written consent to
disclose the information;
(ii)
disclosure is required by law;
(iii)
disclosure is necessary to defend the
licensee against an accusation of wrongful conduct in a
proceeding before the commission or before a professional
association or professional standards committee; or
(iv)
the information becomes public from a source
other than the licensee.
(2)
No cause of action may arise against a licensee
for disclosing confidential information in compliance with item
(1)(f).
(F) A
licensee acting as a buyer's agent may offer properties which
interest his buyer client to other potential buyers. However, if
the licensee has two competing buyer clients in a single real
estate transaction, the agent will give written notice to each
buyer client that neither will receive the confidential
information of the other.
(G)(1) A
licensee shall treat all parties honestly and may not knowingly
give them false or misleading information about the condition of
the property which is known to the licensee. A licensee is not
obligated to discover latent defects or to advise parties on
matters outside the scope of the licensee's real estate
expertise. Notwithstanding another provision of law, no cause of
action may be brought against a licensee who has truthfully
disclosed to a buyer a known material defect.
(2)
No cause of action may be brought against a real
estate brokerage firm or licensee by a party for information
contained in reports or opinions prepared by an engineer, land
surveyor, geologist, wood destroying organism control expert,
termite inspector, mortgage broker, home inspector, or other
home inspection expert, or other similar reports.
(3)
A licensee, the real estate brokerage firm, and
the broker-in-charge are not liable to a party for providing the
party with false or misleading information if that information
was provided to the licensee by the client or customer and the
licensee did not know the information was false or incomplete.
(H)
Nothing in this chapter limits the obligation of the
buyer to inspect the physical condition of the property.
(I)(1) A
real estate brokerage firm may act as a disclosed dual agent
only with the prior informed and written consent of all parties.
Consent is presumed to be informed if a party signs a completed
copy of a dual agency agreement, promulgated by the commission.
At the latest, the form must be signed by the buyer before
writing an offer and by the seller before signing the sales
contract. The agreement must specify the transaction, and must
name the parties to the dual agency consent agreement, and must
state that:
(a)
in acting as a dual agent, the real estate
brokerage firm represents clients whose interests may be adverse
and that agency duties are limited;
(b)
the associated licensees of the real estate
brokerage firm may disclose information gained from one party to
another party if the information is relevant to the transaction,
except if the information concerns:
(i)
the willingness or ability
of a seller to accept less than the asking price;
(ii)
the willingness or ability of a buyer to pay
more than the offered price;
(iii)
any confidential negotiating strategy not
disclosed in an offer as terms of a sale; or
(iv)
the motivation of a seller for selling property
or the motivation of a buyer for buying property;
(c)
that the clients may choose to consent to the
disclosed dual agency or may reject it; and
(d)
that the clients have read and understood the
dual agency agreement and acknowledge that their consent to dual
agency is voluntary.
(2)
A broker-in-charge and associated licensees in
one office of a real estate brokerage firm may conduct business
with a client of another office of the real estate brokerage
firm as a customer or client without creating a dual agency
relationship, so long as the branch offices each have a separate
broker-in-charge and do not share the same associated licensees.
(J)(1) A
broker-in-charge may assign, through the adoption of a company
policy, different licensees affiliated with the broker-in-charge
as designated agents to exclusively represent different clients
in the same transaction. A company policy adopted to fulfill
the requirements of this subsection must contain provisions
reasonably calculated to ensure each client is represented in
accordance with the requirements of this chapter.
(2)
A broker-in-charge may personally, or through
the broker's duly authorized real estate licensed
representative, specifically designate one or more associated
licensees who will be acting as agent of the buyer client or
seller client to the exclusion of all other associated
licensees. Buyers and sellers shall give informed consent to
enter into designated agency relationships. The informed consent
must be evidenced by a designated agency agreement promulgated
by the commission, and must be signed by the buyer before
writing the offer and by the seller before signing the sales
agreement. The designated agency agreement must include language
informing the buyer and seller of the obligations of the
broker-in-charge and associated licensees under this section.
(3)
If a buyer client of a real estate brokerage
firm wants to view a property that was personally listed by the
broker-in-charge, the real estate brokerage firm shall act as a
dual agent with the written consent of the buyer and seller, as
required by subsection (I). If a seller client of a real estate
brokerage firm wants to sell a property to a buyer client of the
real estate brokerage firm that is personally represented by the
broker-in-charge, the real estate brokerage firm shall act as a
dual agent with the written consent of the buyer and seller, as
required by subsection (I).
(4)
A designated agent of a seller client has the
duties and obligations set forth in subsections (C) through (E).
A designated agent of a buyer client has the duties and
obligations set forth in subsections (E), (G), and (H).
(5)
In a transaction where both buyer and seller are
represented by designated agents, the broker-in-charge shall act
as a dual agent pursuant to subsection (I). The broker-in-charge
is not required to complete a dual agency agreement under this
provision. Consent must be contained in the designated agency
agreement.
(6)
A designated agent may disclose to the
designated agent's broker-in-charge, or the licensed
representative appointed by the broker-in-charge, confidential
information of a client for the purpose of seeking advice or
assistance for the benefit of the client in regard to a
transaction.
(7)
If a buyer client of a real estate brokerage
firm wants to view and make an offer to purchase a property
owned by a seller client being represented by the same
associated licensee, the real estate brokerage firm must act as
a dual agent with the written consent of the buyer and seller,
as required by subsection (I).
(8)
If a broker-in-charge appoints different
associated licensees as designated agents in accordance with
subsection (J)(1), the broker-in-charge, all remaining
affiliated licensees, and the real estate brokerage firm must be
considered to be dual agents.
(9)
There may be no imputation of knowledge or
information between and among the broker-in-charge, agents, and
the clients. Designated agents may not disclose, except to the
designated agent's broker-in-charge or appointed representative,
information made confidential by written request or instruction
of the client whom the designated agent is representing, except
information allowed to be disclosed by this section or required
to be disclosed by this section. Unless required to be
disclosed by law, the broker-in-charge of a designated agent may
not reveal confidential information received from either the
designated agent or the client with whom the designated agent is
working. For the purposes of this section, confidential
information is information the disclosure of which has not been
consented to by the client and that could harm the negotiating
position of the client.
(10)
The designation of one or more of a
broker-in-charge's associated licensees as designated agents
does not permit the disclosure by the broker-in-charge or
associated licensees of information made confidential by an
express written request or instruction by a party before or
after the creation of the designated agency. The
broker-in-charge and associated licensees shall continue to
maintain this confidential information unless the party from
whom the confidential information was obtained permits its
disclosure by written agreement or disclosure is required by
law. No liability is created as a result of a broker-in-charge's
and associated licensee's compliance with this subsection.
(K) A
licensee who represents one party to a real estate transaction
may provide assistance to other parties to the transaction by
performing ministerial acts such as writing and conveying
offers, and providing information and aid concerning other
professional services not related to the real estate brokerage
services being performed for a client. Performing ministerial
acts does not create an agency relationship.
(L)(1) A
real estate brokerage firm may offer transaction brokerage to
potential buyers and sellers. A transaction broker may be a
single agent of a party in a transaction, giving the other party
customer service or the transaction broker may facilitate the
transaction without representing either party.
(2)
Licensees operating as transaction brokers are
required to disclose to buyers and sellers their role and duties
in offering customer services to the consumer that shall include
the following:
(a)
honesty and fair dealing;
(b)
accounting for all funds;
(c)
using skill, care and diligence in the
transaction;
(d)
disclosing material adverse facts that affect
the transaction, or the value or condition of the real property
and that are not readily ascertainable;
(e)
promptly presenting all written offers and
counteroffers;
(f)
limited confidentiality, unless waived in
writing by a party. This limited confidentiality prohibits
disclosing:
(i)
information concerning a
buyer's motivation to buy or the buyer's willingness to make a
higher offer than the price submitted in a written offer;
(ii)
factors motivating a seller to sell or the
seller's willingness to accept an offer less than the list
price;
(iii)
that a seller or buyer will agree to
financing terms other than those offered; and
(iv)
information requested by a party to remain
confidential, except information required by law to be
disclosed;
(g)
additional duties that are entered into by
separate agreement.
(3)
Prospective buyers and sellers who do not choose
to establish an agency relationship with a real estate brokerage
firm but who use the services of the firm are considered
customers. A licensee may offer the following services to a
customer as a single agent or as a transaction broker including,
but not limited to:
(a)
identifying and showing property for sale,
lease, or exchange;
(b)
providing real estate statistics and information
on property;
(c)
providing preprinted real estate forms,
contracts, leases, and related exhibits and addenda;
(d)
acting as a scribe in the preparation of real
estate forms, contracts, leases, and related exhibits and
addenda;
(e)
providing a list of architects, engineers,
surveyors, inspectors, lenders, insurance agents, attorneys, and
other professionals; and
(f)
identifying schools, shopping facilities, places
of worship, and other similar facilities on behalf of a of the
parties in a real estate transaction.
(4)
A licensee offering services to a customer
shall:
(a)
timely present all written offers to and from
the parties involving the sale, lease, and exchange of property,
even when the property is subject to a contract of sale;
(b)
timely account for all money and property
received by the broker on behalf of a party in a real estate
transaction;
(c)
provide a meaningful explanation of brokerage
relationships in real estate transactions;
(d)
provide an explanation of the scope of services
to be provided by the licensee;
(e)
be fair and honest and provide accurate
information in all dealings;
(f)
keep information confidential as requested in
writing by the customer; and
(g)
disclose known material facts regarding the
property or the transaction.
(M) The
provisions of this section which are inconsistent with
applicable principles of common law supersede the common law,
and the common law may be used to aid in interpreting or
clarifying the duties described in this section. Except as
otherwise stated, nothing in the section precludes an injured
party from bringing a cause of action against licensees, their
companies, or their brokers-in-charge.
Section 40-57-360.
(A) The broker-in-charge
must be responsible for supervising the team and all licensed
members of the team. The broker-in-charge may not delegate
supervisory responsibilities to the team members or team leader.
Written office policy of the broker-in-charge shall address team
relationships in which associated licensees may engage.
(B) The
team may act as disclosed dual agents only and with the prior
informed and written consent of all parties and as addressed in
the broker-in-charge's written office policy.
(C) Team
members must conduct all real estate brokerage activities from
their commission-established office under the supervision of a
broker-in-charge.
(D) Team
advertising must contain the team name and the full name of the
real estate brokerage firm displayed in a conspicuous way.
(E) No
team may imply that the team is a separate entity from the
brokerage firm of its employment. Team names may not include
the terms 'realty,' 'real estate', 'realtors', or similar terms
suggesting a brokerage.
(F) The
team, and any and all team members, must display and promote
that they are directly connected to the brokerage firm under
which the team works. The brokerage firm name under which the
team works is to be displayed prominently and visibly in a
meaningful and conspicuous way on all methods of
advertising.
(G) The
commission may promulgate regulations regarding the creation and
operation of real estate teams.
Section 40-57-370.
(A) A licensee shall provide
at the first practical opportunity to all potential buyers and
sellers of real estate with whom the licensee has substantive
contact:
(1)
a meaningful explanation of brokerage
relationships in real estate transactions that are offered by
that real estate brokerage firm, including an explanation of
customer and client services;
(2)
Disclosure of Brokerage Relationships form
prescribed by the commission.
(B) An
'Acknowledgement of receipt of the Disclosure of Brokerage
Relationships' form must be included in an agency agreement and
in a sales contract. In addition, each sales contract must
require the buyer and the seller to acknowledge whether they
received customer or client service in that real estate
transaction.
(C) At
the time of first substantive contact, it is presumed that the
potential buyer or seller is to be a customer of the real estate
brokerage firm and that the real estate brokerage firm will be
acting as a transaction broker as defined by this chapter and
that the real estate brokerage firm shall offer services to a
customer as defined by Section 40-57-350 (L) only until the
potential buyer or seller signs an agency representation
agreement.
(D) If
first substantive contact occurs over the telephone or other
electronic means, including the Internet and electronic mail, an
'Acknowledgement of receipt of the Disclosure of Brokerage
Relationships' form may be sent by electronic means, including
the Internet and electronic mail.
(E) For
all real estate transactions, no agency relationship between a
buyer, seller, landlord, or tenant and a real estate brokerage
firm and its associated licensees exists unless the buyer,
seller, landlord, or tenant and the brokerage company and its
associated licensees agree, in writing, to the agency
relationship. No type of agency relationship may be assumed by
a buyer, seller, landlord, tenant, or licensee or created orally
or by implication. A real estate brokerage firm may not be
considered to have an agency relationship with a party or have
agency obligations to a party but is responsible only for
exercising reasonable care in the discharge of the real estate
brokerage firm's specified duties, as provided in this chapter,
and, in the case of a client, as specified in the agency
agreement.
(F) The
payment or promise of payment of compensation to a real estate
brokerage firm by a seller, buyer, landlord, or tenant does not
determine whether an agency relationship has been created
between a real estate licensee and a seller, buyer, landlord, or
tenant.
(G) The
brokerage relationship disclosure requirements of this section
do not apply if the:
(1)
transaction is regarding the rental or lease of
property; or
(2)
communication from the licensee is a
solicitation of business.
Section 40-57-380.
A real estate broker and all associated licensees owe
no duty or obligation to a client following termination,
expiration, completion, or performance of an agency agreement or
closing of the real property transaction, whichever occurs
first, except the duties of:
(1)
accounting in a timely manner for all money and
property related to and received during the relationship; and
(2)
keeping confidential all information received
during the course of the engagement which was made confidential
by request or instructions from the client, except as provided
for in Section 40-57-350(C)(1)(f) and Section 40-57-350(E)(1)(f)
unless the:
(a)
client permits the disclosure by written
agreement;
(b)
disclosure is required by law;
(c)
disclosure is necessary to defend the licensee
against an accusation of wrongful conduct in a proceeding before
the commission or before a professional association or
professional standards committee; or
(d)
the information becomes public from a source
other than the broker.
Section 40-57-510.
(A) To be eligible for
licensure as a property manager or property manager-in-charge,
an applicant must:
(1)
attain the age of twenty-one if applying for a
property manager-in-charge;
(2)
attain the age of eighteen if applying for a
license as a property manager;
(3)
provide a physical address at which the licensee
can be contacted in the course of an investigation. A licensee
shall maintain on file with the commission his current contact
information for his residential address, mailing address, email
address, and telephone number. Failure to update this contact
information within thirty days after a change may result in an
administrative suspension of the property manager, salesperson,
broker, or broker-in-charge pursuant to Section 40-57-710;
(4)
graduate from high school or hold a certificate
of equivalency that is recognized by the South Carolina
Department of Education;
(5)
submit proof of completion of education to the
commission and, if applicable, experience requirements as
specified in this chapter;
(6)
submit to criminal background check as provided
in Section 40-57-115 for initial application; and
(7)
pass the applicable examination.
(B) An
application for examination or licensure must be made in writing
on a form prescribed by the commission and must be accompanied
by all applicable fees.
(C) As a
condition for and before applying to the commission for
licensure, an applicant for a property manager or property
manager-in-charge license shall provide proof to the commission
of having met the following educational requirements, in
addition to the other requirements of this chapter:
(1)
for a property manager license:
(a)
completion of thirty hours of classroom
instruction in property management principles and practices; or
(b)
evidence of holding a juris doctor degree, a
bachelor of law degree, a baccalaureate degree or a master's
degree with a major in real estate or housing from an accredited
college or university, or completion of another course of study
approved by the commission; and
(2)
for a property manager-in-charge license:
(a)
an active property manager license; and
(b)
completion of seven hours of instruction in
property management accounting and record keeping approved by
the commission.
(D) The
commission shall issue licenses in the classifications of
property manager or property manager-in-charge to individuals
who qualify under and comply with the requirements of this
chapter. An individual may not be licensed in more than one
classification at the same time. The license must be in the
form and size as the commission prescribes and is not
transferable.
(E) An
individual holding an active property manager license must be
licensed under a property manager-in-charge or broker-in-charge
who is licensed by the commission or must be designated as a
property manager-in-charge. A property manager may not be
licensed during the same period with more than one property
manager-in-charge or broker-in-charge. When a licensee becomes
disassociated with a broker-in-charge or property
manager-in-charge, the licensee immediately shall notify the
commission by completion of the proper form. The licensee must
furnish a new business address to the commission, the
authorization of the new broker-in-charge or new property
manager-in-charge, and proof of notification to the former
broker-in-charge or property manager-in-charge.
Section 40-57-520.
(A) The management of each
residential multiunit rental location must be provided by an
on-site licensee or an off-site licensee if there is no on-site
staff.
(B) The
commission may permit multiple multiunit rental property
locations to be managed by one licensee.
(C) An
unlicensed employee of the owner of a multiunit rental property
or an unlicensed individual who works under the supervision of a
licensee is permitted to perform only the following duties:
(1)
maintenance;
(2)
clerical or administrative support;
(3)
collection of rents which that are made payable
to the owner or real estate company;
(4)
showing rental units to prospective tenants;
(5)
furnishing published information;
(6)
providing applications and lease forms; and
(7)
receiving applications and leases for submission
to the owner or the licensee for approval.
Section 40-57-710.
(A) In addition to Section
40-1-110, the commission may deny issuance of a license to an
applicant or may take disciplinary action against a licensee
who:
(1)
makes a substantial misrepresentation on an
application for a real estate license;
(2)
makes a substantial misrepresentation involving
a real estate transaction;
(3)
makes false promises likely to influence,
persuade, or induce;
(4)
pursues a continued and flagrant course of
misrepresentation or makes false and misleading promises through
any medium of advertising or otherwise;
(5)
in the practice of real estate, demonstrates bad
faith, dishonesty, untrustworthiness, or incompetency in a
manner as to endanger the interest of the public;
(6)
represents a real estate broker other than the
broker-in-charge or property manager-in-charge with whom they
are licensed;
(7)
guarantees or authorizes and permits an
associated licensee to guarantee future profits from the resale
of real estate;
(8)
makes a dual set of contracts, written or
otherwise, by stating a sales price other than the actual sales
price;
(9)
is convicted of violating the federal and state
fair housing laws, forgery, embezzlement, breach of trust,
larceny, obtaining money or property under false pretense,
extortion, fraud, conspiracy to defraud, or has been convicted
of a felony sex-related, felony drug-related, felony real
estate-related, felony financial, or felony violent offense, or
pleading guilty or nolo contendere to such an offense in a court
of competent jurisdiction of this State, another state, or a
federal court;
(10)
fails to report to the commission in writing by
certified mail, within ten days, notice of conviction of a crime
provided in item (9);
(11)
fails, within a reasonable time, to account for
or to remit trust funds coming into his possession which belong
to others;
(12)
pays a commission or compensation to an
unlicensed individual for activities requiring a license under
this chapter. Notwithstanding this section, a licensee may not
pay or offer to pay a referral fee or finder's fee to an
unlicensed individual who is not a party in the real estate
sales or rental transaction;
(13)
violates a provision of law relating to the
freedom of a buyer or seller to choose an attorney, insurance
agent, title insurance agent, or another service provider to
facilitate the real estate transaction;
(14)
fails to disclose in accordance with Section
40-57-370 the party or parties for whom the licensee will be
acting as an agent in a real estate transaction, if any;
(15)
receives compensation in a real estate
transaction or directly resulting from a real estate transaction
from more than one party except with the full knowledge and
written disclosure to all parties;
(16)
represents more than one party in a real estate
transaction without the full written knowledge and consent of
all parties;
(17)
acts as an undisclosed principal in a real
estate transaction;
(18)
accepts deposit money which is to be delivered
to the licensee's principal in a real estate transaction without
informing the payor and having the payor acknowledge in writing
who will hold the money received by the licensee;
(19)
issues a check in connection with his real
estate business which is returned for insufficient funds or
closed account;
(20)
fails to disclose in accordance with Section
40-57-530 a known material facts concerning a real estate
transaction;
(21)
violates a provision of this chapter or a
regulation promulgated under this chapter;
(22)
violates a rule or order of the commission.
(23)
knowingly gives false information to an
investigator or inspector;
(24)
engages in a practice or takes action
inconsistent with the agency relationship that other real estate
licensees have established with their clients;
(25)
fails to make all records required to be
maintained under this chapter available to the commission for
inspection and copying by the commission upon request of an
investigator of the commission, fails to appear for an interview
with an investigator of the commission without due cause, or
provides false information upon direct inquiry by the
investigator or inspector;
(26)
fails to promptly submit all offers and
counteroffers in a real estate sales transaction;
(27)
fails to provide current contact information to
the commission; or
(28)
allows or creates an unreasonable delay in the
closing of a transaction or act in a manner which causes failure
or termination of a transaction due solely to a dispute among
participating licensees concerning the division of a commission.
(B) If
after an investigation, charges of a violation are brought
against a licensee, the broker-in-charge or property
manager-in-charge must be notified of the charges.
Section 40-57-720.
(A) An investigation must be
conducted in accordance with Section 40-1-80 and must be
performed by investigators who have completed one hundred hours
of training in programs that are approved by the commission and
provide instruction on real estate principles, state statutory
and regulatory law, and investigative techniques.
(B) A
restraining order must be obtained in accordance with Section
40-1-100.
(C)(1)
The department shall conclude its investigation within
one hundred fifty days from receipt of the complaint or seek a
waiver of this period from the commission upon a showing of due
diligence and extenuating circumstances.
(2)
A hearing on the charges must be at the time and
place designated by the commission and must be conducted in
accordance with the Administrative Procedures Act.
(3)
The commission shall render a decision and shall
serve, within ninety days, notice, in writing, of the
commission's decision to the licensee charged. The commission
also shall state in the notice the date upon which the ruling or
decision becomes effective.
(4)
The department shall maintain a public docket or
other permanent record in which must be recorded all orders,
consent orders, or stipulated settlements.
(D) A
licensee may voluntarily surrender his license in accordance
with Section 40-1-150.
(E)(1)
The commission may impose disciplinary action in
accordance with Section 40-1-120.
(2)
Upon determination by the commission that one or
more of the grounds for discipline exists, the commission may
impose a fine of not less than five hundred or more than five
thousand dollars for each violation and as provided in Section
40-1-120. The commission may recover the costs of the
investigation and the prosecution as provided in Section
40-1-170.
(3)
Nothing in this section prevents a licensee from
voluntarily entering into a consent order with the commission
wherein violations are not contested and sanctions are
accepted.
(F) The
department annually shall post a report that provides the data
for the number of complaints received, the number of
investigations initiated, the average length of investigations,
and the number of investigations that exceeded one hundred fifty
days.
Section 40-57-730.
After revocation of a license, a person may not reapply
for three years from the date of revocation. A person seeking
licensure after revocation shall:
(1)
submit to the commission satisfactory proof that the
person is trustworthy, has a good reputation for honesty and
fair dealing, and is competent to transact the business of a
real estate licensee;
(2)
submit proof of educational qualifications as set forth
in this chapter if the proof of educational qualifications on
file is more than five years old;
(3) pass
the applicable examination; and
(4) meet
any other qualifications and conditions that apply to
individuals applying for a license who have never been licensed.
Section 40-57-740.
(A) No cause of action may
arise against an owner of real estate or licensed real estate
agent of a party to a transaction for failure to disclose in a
transaction:
(1)
that the subject real estate is or was occupied
by an individual who was infected with a virus or another
disease which has been determined by medical evidence as being
highly unlikely to be transmitted through occupancy of a
dwelling place either presently or previously occupied by the
infected individual;
(2)
that the death of an occupant of a property has
occurred or the manner of the death;
(3)
any off-site condition or hazard that does not
directly impact the property being transferred; or
(4)
any psychological impact that has no material
impact on the physical condition of the property being
transferred.
(B)
Nothing in subsection (A) precludes an action against
an owner of real estate or agent of the owner who makes
intentional misrepresentations in response to direct inquiry
from a buyer or prospective buyer with regard to psychological
impacts, offsite conditions, or stigmas associated with the real
estate.
(C) The
commission shall establish and publish standards relevant to the
approval and conduct of education required by this chapter. The
commission shall review, approve, and regulate education courses
required by this chapter and providers and instructors of these
courses including, but not limited to, accredited colleges,
universities, private business entities, organizations, schools,
associations, and institutions.
(D) The
commission may deny, reprimand, fine, suspend, or revoke the
approval of an education provider or instructor if the
commission finds that the education provider or instructor has
violated or failed to satisfy the provisions of this chapter or
the regulations and standards promulgated pursuant to this
chapter.
(E) An
application by a provider who seeks approval to offer and
conduct educational instruction or an application by an
instructor must be made on a form prescribed by the commission
and accompanied by applicable fees not less than sixty days
before a course offering and must be approved by the department
before it may commence instruction.
(F) If an
application for a provider, instructor, or course is not
approved, the reason must be detailed and the applicant must be
given thirty days to respond.
(G) If
the commission approves an application, a certificate must be
issued by the commission to a provider or an instructor and for
an approved course to be renewed biennially.
(H) An
approved course must be taught by an approved instructor who is
qualified and has demonstrated knowledge of the subject matter
to be taught as well as the ability to teach.
(I)
Approved instructors shall attend instructor
development workshops sponsored by the commission or provide
evidence of equivalent hours of continuing education that
increases their knowledge of the subject content in their area
of expertise or their teaching techniques.
Section 40-57-750. Payment and collection of costs associated with investigations and prosecution of violations under this chapter must comply with Section 40-1-170.
Section 40-57-760. Imposition and collection of all costs and fines imposed pursuant to this chapter must comply with Section 40-1-180.
Section 40-57-770. An investigation conducted pursuant to this chapter is confidential. Related communications are privileged as provided in Section 40-1-190.
Section 40-57-780. A real estate broker, salesperson, or property manager who fails to renew or register a license and continues to engage in the business permitted pursuant to the license is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned not more than six months, or both.
Section 40-57-790. A civil action may be brought for violations of this chapter as provided for violations of Article 1, Chapter 1, in accordance with Section 40-1-210.
Section 40-57-800.
(A) Service of a notice
provided for by law upon a nonresident licensed under this
chapter or upon a resident who, having been licensed,
subsequently becomes a nonresident or after due diligence cannot
be found at his usual abode or place of business in this State,
may be made by providing a copy of the notice, and accompanying
documents. A copy of the notice, accompanying documentation,
and a certified copy of the service on the administrator must be
mailed to the licensee at his last known address, return receipt
requested. The administrator shall keep a record of the day of
the service of the notice and the return receipt must be
attached to and made part of the return of service of the notice
by the commission.
(B) A
continuance may be given in a hearing under this chapter for
which notice is given pursuant to this section so as to afford
the licensee a reasonable opportunity to appear and be heard.
Section 40-57-810. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective."
SECTION 2. A regulation that was promulgated to effectuate the purpose of Chapter 57, Title 40 and which is in effect on the effective date of this act is considered to be effective regardless of whether its authorizing provisions are redesignated as a new or different code section, or moved in part to a different code section by this act.
SECTION 3. The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION 4. This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.