| Printed Page 4320, May 28 | Printed Page 4340, May 28 |

(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 Saturdays, Sundays, 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 shall 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) In the event a dispute arises between buyer and seller concerning the entitlement to and disposition of an earnest money deposit, or between a landlord and tenant concerning entitlement to and disposition of a security 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;

(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 shall also maintain, in his designated principal place of business, a recordkeeping system consisting of:

(a) for real estate sales, a journal or an accounting system which records the chronological sequence in which funds are received and

(b) For property management, a journal or an accounting system containing the same information as stated in item (a) except that the required running balance may be determined at the time of reconciliation;

(c) When managing property, a separate record for each tenant must be maintained which shall identify the unit, the unit owner, amount of rent, due date, security deposit, and all receipts with dates. 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) unless other appropriate written memoranda are maintained, trust account deposit documents shall identify the broker-in-charge or property manager-in-charge and the buyer or tenant;

(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 shall include a written worksheet comparing the reconciled bank balance with the journal balance and with the ledger total to ensure agreement.

(8) All monies 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 must be immediately delivered to the broker-in-charge or property manager-in-charge.

(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

(a) a person remitting the monies to the broker-in-charge or property manager-in-charge has been informed of the person's right to ownership of the interest but relinquishes the right of ownership by written agreement; and

(b) if part of a preprinted form, the written agreement must be conspicuous and must require initials indicating an affirmative or negative response.

(11) Records required by this chapter shall be held 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 to be requested shall include, but are not limited to, journals, ledgers, folios, client subaccounts, tenant accounts, canceled checks, deposit slips, and bank statements.

(C) A licensed broker-in-charge or property manager-in-charge shall establish and maintain a specific office location which shall 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 dispatching duties as provided in this chapter, the department may, at its discretion, permit an associated licensee to act as broker-in-charge or property manager-in-charge for no more than six months.

(4) A licensee may not advertise 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 agency agreement and when advertising real estate in any medium including site signage, a licensee shall clearly identify the company with which the licensee is affiliated.

(5) When operating under a trade or franchise name, a licensee shall reveal clearly the identity of the franchisee or holder of the trade name.

(10) 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) agency disclosure form;

(g) closing statement;

(h) policy on agency representation;

(i) fair housing policy.

(11) The department may, at its discretion, 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 shall either directly or indirectly 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 clear 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.

(3) A licensee may not transact or negotiate directly with the owner of real estate when that real estate is already subject to an exclusive listing contract with another licensee unless permission is granted in writing by the other licensee.

(4) 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.

(5) Any listing or buyers representation agreement that a licensee may enter into shall 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;

(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.

(7) In addition to the above requirements, a listing agreement shall:

(a) state the price of the listed property;

(b) not contain a provision requiring a party signing the listing to notify the licensee of his intention to cancel the listing after the definite expiration date;

(c) be clearly defined if intended to be either an `exclusive agency' listing or `exclusive right to sell' listing;

(d) clearly specify any exception or variation in amount of commission to be paid and circumstances which would apply;

(E) Except as provided for in Section 40-57-240, management of each multi-unit rental location must be provided by a licensee.

(1) At the discretion of the department, multiple multi-unit rental property locations may 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) An unlicensed employee of the owner or an unlicensed individual working under the supervision of a licensee may not:

(a) negotiate binding contracts;

(b) 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;

(c) approve applications or leases or settle or arrange the terms and conditions of a lease;

(d) indicate to the public that the unlicensed individual is in a position of authority which has the managerial responsibility of the rental property.

(4) Licensees who manage property shall do so under a written management agreement which shall set forth, at a minimum, the following conditions:

(a) names and signatures of authorized parties to the agreement;

(b) property identification;

(c) method of compensation to the licensee;

(d) term, including definite expiration date;

(e) terms and conditions of tenant rental or lease arrangements.

Section 40-57-138. (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,

(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) above, 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

(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, 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 shall 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 may also 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. 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

(G) Nothing in this chapter shall limit 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) above, 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) exercise reasonable skill and care in discharging the buyer's agent's agency duties;

(4) comply with all provisions of this chapter and with any regulations promulgated 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 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

(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 shall 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. 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) A licensee 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 the agency disclosure form prescribed by the commission. The form shall specify the transaction in which a licensee shall serve as dual agent and shall state:

(1) that in acting as a dual agent, a licensee represents clients whose interest may be adverse and that agency duties are limited;

(2) that the dual agent may disclose any information gained from one party to another party if the information is relevant to the transaction, except if the information concerns:

(a) the willingness or ability of a seller to accept less than the asking price;

| Printed Page 4320, May 28 | Printed Page 4340, May 28 |