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SOUTH CAROLINA STATUTES AND CODES

CHAPTER 57 - REAL ESTATE BROKERS, SALESMEN, AND PROPERTY MANAGERS

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Title 40 - Professions and OccupationsCHAPTER 57. REAL ESTATE BROKERS, SALESMEN, AND PROPERTY MANAGERSSECTION 40-57-5. Applicability of chapter;conflicts of laws. 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. Creation and purpose of South Carolina Real Estate Commission. 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. Valid licensure requirement for real estate brokers, salesmen and property managers. 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. Definitions. 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. Membership;terms of appointment. (A) The South Carolina Real Estate Commission consists of nine members elected or appointed as follows: (1) Six members who are professionally engaged in the active practice of real estate, one elected from each of the six 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 eight 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. Election of officers;official seal, rules and procedures. 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. Powers and duties of commission. 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. Annual report. The commission shall submit to the department an annual report in accordance with guidelines established by the department. SECTION 40-57-70. Application and license fees;reinstatement penalty;allocation of fees;annual report. (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. Qualifications for licensure. 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. Application for examination or licensure;form and fees. 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. Educational requirements conditional to application for licensure. (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. Issuance and classification of license;revocation;inactive status. (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 40-57-120. Reciprocity agreements with other jurisdictions. (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. Conditions of renewal of license;continuing education;exemptions. (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. Duties of broker-in-charge, property manager-in-charge, and licensees;policies and recordkeeping;management of residential multi-unit rental locations;unlicensed employees. (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. Real estate brokerage company duties to client;agency relationship;applicability of common law. (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 knowled
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  • Title 40 - Professions and Occupations

    CHAPTER 57.

    REAL ESTATE BROKERS, SALESMEN, AND PROPERTY MANAGERS

    SECTION 40-57-5. Applicability of chapter; conflicts of laws.

    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. Creation and purpose of South Carolina Real Estate Commission.

    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. Valid licensure requirement for real estate brokers, salesmen and property managers.

    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. Definitions.

    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. Membership; terms of appointment.

    (A) The South Carolina Real Estate Commission consists of nine members elected or appointed as follows:

    (1) Six members who are professionally engaged in the active practice of real estate, one elected from each of the six 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 eight 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. Election of officers; official seal, rules and procedures.

    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. Powers and duties of commission.

    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. Annual report.

    The commission shall submit to the department an annual report in accordance with guidelines established by the department.

    SECTION 40-57-70. Application and license fees; reinstatement penalty; allocation of fees; annual report.

    (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. Qualifications for licensure.

    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. Application for examination or licensure; form and fees.

    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. Educational requirements conditional to application for licensure.

    (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. Issuance and classification of license; revocation; inactive status.

    (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 40-57-120. Reciprocity agreements with other jurisdictions.

    (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. Conditions of renewal of license; continuing education; exemptions.

    (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. Duties of broker-in-charge, property manager-in-charge, and licensees; policies and recordkeeping; management of residential multi-unit rental locations; unlicensed employees.

    (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. Real estate brokerage company duties to client; agency relationship; applicability of common law.

    (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 knowled

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