MO License Flashcards
License Law 339 (Missouri Statute #339)
Requires a person be licensed to participate in real estate profession. This goes for any part of the profession.
All business is conducted in the name of the broker and not the salesperson (salespeople must be licensed to a broker).
Missouri Real Estate Commission
Passes rules.
Promulgated (made known) in license law.
Purpose of it is to PROTECT THE PUBLIC.
Violating Missouri Licensing Law and is found Guilty
Violation of 339.010 to 339.180 = CLASS B MISDEMEANOR.
Who does not need a real estate license? (Banks)
An owner or regular employee of a corporation who is not in the real estate business as a vocation.
ex. a bank that has foreclosed on a property becomes the owner of that property. The bank does not need a real estate license to resell the property. If the bank has an employee that handles these matters, that person does not need a real estate license either.
Referrals are made Broker to Broker
Licensee (salesperson) from another state can refer a client to a licensee in Missouri, and be paid a commission or referral fee through his/her broker without holding a Missouri license themselves.
The fee is paid to the out-of-state salesperson’s broker to share with the salesperson based on their agreement of compensation.
The referral is actually made broker to broker.
The salesperson would contact his/her broker who would place the referral.
The receiving broker would appoint his/her licensee to represent the referred consumer.
Who does not need a real estate license? (Con’t)
Auctioneer, if employed by owners to auction their property.
Attorney, but can’t collect any real estate commission.
Court-appointed person (receiver, trustee in bankruptcy, administrator, executor, or guardian) who is chosen to be the guardian or trustee of an estate.
Any officer or employee working for the government (federal agency, the state government, or any political subdivision thereof) does not need a real estate license while performing his/her official duties.
Railroads and other public utilities regulated by the state of Missouri, their subsidiaries or affiliated corporations, or the officers or regular employees thereof.
Any newspaper, magazine or periodical of general circulation whereby advertising of real estate is incidental to the operation of that publication does not need a real estate license (editor of a paper or magazine that advertises only real estate must be a licensed broker.)
Who does not need a real estate license? (Con’t #2)
Any person employed or retained to manage real property by, for, or on behalf of the agent or the owner, of any real estate shall be exempt from holding a license if the person is limited to one or more of the following activities:
Delivering or receiving a lease.
Showing a rental unit.
Conveying information prepared by a broker.
Receiving of security deposits or rental payments.
An unlicensed assistant (clerical personnel).
Any developer selling Missouri Land owned by the developer if such developer has on file with the commission a certified copy of a currently effective statement of record of Title 15 of the United States Code or a current statement from the Office of Interstate Land Sales of the United States Department of Housing and Urban Development approving the documentation.
Non-Profit Associations
Any employee acting on behalf of a non-profit community, a regional economic development association, an agency or a corporation which has as its principal purpose to be the general promotion and economic advancement of the community at large, does not need a license provided such entity DOES NOT:
Offer such property for sale, lease, rental or exchange on behalf of another person or entity.
List or offer or agree to list such property for sale, lease, rental or exchange.
Receive a fee, commission, or compensation, either monetary or in kind, which is directly related to sale or disposal of such properties.
If someone sells real estate without a license
MREC can ask a “court of competent jurisdiction” to issue a cease and desist order.
It shall be unlawful for any person, partnership, association, *limited liability company, or corporation, foreign or domestic.
A licensed real estate corporation could be accused of a misdemeanor license law violation.
How many members are there on the commission (MREC)?
7
6 members must be licensed for 10 years.
1 member must be from general public.
What are the qualifications to be on the commission? (7)
US Citizen.
Commissioners are appointed by the governor with the consent of the Missouri Senate.
Terms are for 5 years.
Commissioners receive $75 a day plus expenses when they are meeting.
All members of the commission vote.
All commissioners must be Missouri residents for at least one year.
Commission employees may hold an inactive real estate license during their employment. For example, the education director of the commission holds a real estate license, but cannot be actively involved in the real estate business.
Missouri Real Estate Commission (MREC)
Hold hearings, pay fees and mileage of witnesses which shall be the same as that allowed in the circuit court in civil cases.
Has the power to issue a subpoena and to compel any person in this state to come before them to offer testimony or any material (business records) specified in the subpoena.
Can promulgate (make known) and enforce the rules and regulations.
Suspend.
Revoke.
Place on probation.
Impose a civil penalty (based on the finding of the Missouri Administrative Hearing Commissioner (MAHC) not to exceed $2,500 for each offense as described in Mo Rev Stat 339.205.
Sue and be sued.
Hire employees.
Elect a chairman.
Hold regular meetings to review applications, complaints, investigations, and any necessary business.
Act by mail or conference call.
Obtain a restraining order in a court of competent jurisdiction.
Order restitution to injured parties.
Investigate any time with or without a written complaint, however, if the commission receives a written, sworn (notarized) complaint from any member of the public, they MUST investigate.
Primary Purpose of MREC
Protect the Public.
If the MREC feels that any person presents a substantial probability of serious danger to the health, safety or welfare of any resident of this state they will ask a “court of general jurisdiction” to grant an injunction, restraining order or other order as may be appropriate to stop a person from violation of the law.
Primary Purpose of MREC (Con’t)
Will never be involved in a commission (money) dispute between licensees and/or brokers.
Any person, corporation, partnership, or association licensed by the MREC could be accused of a license law violation which is a class B misdemeanor (subject to suspension, revocation or probation of their license).
A person or entity that is not licensed is not subject to MREC rules and regulations other than a person practicing without a license.
The commission may issue a civil penalty once the findings of the administrative hearing commission have been delivered. The penalty imposed by the commission shall not exceed $2,500 for each offense. Each day of continued violation constitutes a separate offense, with a maximum penalty of $25,000.
Failure of a licensee to respond in writing, within thirty (30) days from the date of the commission’s written request or inquiry, mailed to the licensee’s address currently registered with the commission, will be sufficient grounds for taking disciplinary action against that licensee.
The MREC cannot:
Levy fines or award monetary damages without first receiving a ruling from the administrative hearing commission.
Arbitrate commission disputes.
Discuss any case pending before the MAHC (Missouri Administrative Hearing Commission).
Difference between MREC and MAHC
MREC makes the final decision whether to suspend, revoke, or place a licensee on probation.
If the MAHC feels that the MREC is not correct, then the case is dismissed. If the MAHC feels the MREC is correct, then the case is sent back to the MREC so that the license of the licensee can be suspended, revoked or placed on probation.
A person who is refused a license by the MREC appeals that decision to the MAHC.
MAHC role is to hold hearings the requested by the MREC to:
Determine guilt or innocence.
If innocent, case dismissed.
If guilty, sent back to the MREC for punishment or dismissal.
Missouri Administrative Hearing Commission (MAHC)
Is made up of three attorneys who are admitted to practice before the Missouri Supreme Court.
Work for the Attorney General’s office.
Review cases sent to them by the MREC.
Complaint Process
If a complaint is made by anyone, MREC decides if they think there has been a violation of the license law.
If the MREC believes there has not been a violation of the license law, the case is dismissed.
If the MREC thinks there has been a violation of the license law, the case is sent on to the MAHC.
If the MAHC decides there is no violation of the license law, then the case is dismissed.
If the MAHC thinks there has been a violation of the law, they will send the case back to the MREC for a decision on the punishment to impose a civil penalty, suspend, revoke, or place the licensee on probation.
MREC finding licensees based on findings of MAHC
Not to exceed $2,500 per offense with a maximum penalty of $25,000
If a licensee commits a crime against the public, other than a license law violation
MAHC will turn the person over to the Attorney General’s office for punishment.
Types of Real Estate Licenses
Broker Broker-Salesperson Broker-Officer in a corporation Broker-Partner in a partnership Broker-Associate in an association Salesperson
The Broker
Performs real estate activities for another and collects a commission. There can only be one (1) per company.
If a broker changes his/her company office or branch office, the MREC must be given written notice within 10 days.
License renewal is June 30th every 2 years - even years.
The Broker duties
Maintains Escrow Accounts-Monies belonging to other people. (Seller, Buyer, Landlord, Tenant, etc.)
Manages the company and is responsible for individuals licensed to him/her.
Pays all fees and commissions to individuals licensed to him/her and cooperating brokers.
All agreements belong to “The broker” and stay with “The broker” upon transfer of a license. Example, if you are licensed to a broker, and you have 5 listing agreements and 3 buyer agency agreements, you cannot take those agreements with you; they stay with “The broker.”
“The broker” cannot hold licensees’ licenses if the person is not going to be actively involved in the business. The license should be returned to the MREC. (One referral a licensing period would make a licensee “actively involved in the business.”)
Licenses must be held at main or branch office and displayed to the public on request.
A branch office must be supervised by a person with a type of broker license (broker-salesperson, broker-officer, broker-partner). A branch office would operate under the principal broker’s license and name.
Broker-Salesperson
A licensed person who works for, or with a Broker, either as an employee or independent contractor. For example, a Broker may require an EMPLOYEE to follow the rules governing such matters as working hours, office routine, attendance at sales meetings, assignment of sales quotas and adherence to dress codes. A Broker is required to withhold Social Security tax and income tax from wages paid to employees as well as issue a form W2 at the end of a year. A Broker cannot exercise the same amount of control over a person who is working as an INDEPENDENT CONTRACTOR. A Broker can essentially tell an “IC” “What” to do, but not “How” to do it. For example, an “IC” cannot be required to keep specific office hours or attend sales meetings. At the end of a year, an “IC” receives a tax form 1099.
A broker who chooses to operate as a salesperson under the direction of another broker, because there can only be one “broker” per company.
Sends broker’s license to the MREC for “safe keeping” and operates as a broker-salesperson. Anytime this person wants to go back to being a broker, a form is filled out, sent to the MREC with the proper fee, and the licensee can once again be a broker.
Can act as a branch or sales manager and can continue to list and sell property.
Does not “hold” licenses, all licenses are held by “The Broker.”
License renewal is June 30th in each even-numbered year - every two years.
Cannot be licensed with more than one broker at the same time.
Broker-Officer in a corporation
Broker-Partner in a partnership
Broker-Associate in an association
A licensee who has attained broker status, and for tax purposes and/or liability chooses to operate as an officer, partner, or associate.
The entity becomes “The Broker.” (ex. in a corporation, the corporation becomes “The Broker” and the partners in the corporation become broker officers).
The MREC requires the name, residence, and business addresses of each partner in a partnership, or each associate in an association, or each officer of a corporation, licensed or unlicensed.
The Corporation must…
Be in good standing with the Secretary of State.
The MREC must be notified of changes within 10 days.
Corporate information must be registered with the Secretary of State, and the MREC.
Example to remember - If two brokers apply for a license as a partnership, and one of the two had been found guilty of embezzlement but has made full restitution the MREC may turn them down for a license. The brokers would appeal their case to the Missouri Administration Hearing Commission.
License renewal is June 30th in each even-numbered year - every 2 years.
All corporate officers involved in the brokerage business must have active broker-officer licenses or a salesperson’s license. A salesperson can be an officer of a corporation, but cannot be involved in management or supervision of the business.
Salesperson
Must pass this 48-hour course, take the state AMP exam, and the 24 hour Missouri Real Estate Practices course before applying for a license.
Candidates applying for a Missouri Real Estate license after December 1, 2010, must submit acceptable proof of having submitted fingerprints to the Missouri Highway Patrol’s approved vendor, and the results will be used for background checks by both the Missouri Highway Patrol and the Federal Bureau of Investigation.
Must renew the license on or before September 30th - even years - every 2 years.
Delinquent renewal applications must be accompanied by a delinquent fee of $50 per month or partial month elapsed since the date of license expiration, not to exceed $200.
Any licensee who fails to complete continuing education requirements during the renewal period must submit with their renewal proof of completion of the Missouri Real Estate Practice Course. This course must have been completed no more than six (6) months prior to the receipt date as affixed by the United States Postal Service or recognized common carrier or the date the application is hand-delivered to the Missouri Real Estate Commission during regular business hours.
If a salesperson who wishes to transfer to another broker has a complaint filed against him/her the MREC (Real Estate Commission) will usually disclose all information about the complaint to the new broker.
Inactive Licenses
Salesperson or broker returns a licensee’s license to the MREC. The MREC holds the license in an inactive status (safe keeping).
Once a licensee puts his/her license on inactive status, he/she cannot collect any fees (referral or otherwise).
A licensee still must renew an inactive license every 2 years (biennially) for a broker (on June 30th) and a salesperson (on September 30th) and pay the appropriate fees.
A license which is inactive may not be reactivated until the licensee presents to the commission the proper application accompanied by the required fee and a certificate from a school accredited by the commission evidencing satisfactory completion, within the preceding six (6) months, of the Missouri Real Estate Practice Course. .
No continuing education courses need to be taken while a licensee is on inactive status.
Temporary License
Issued upon the death or incapacity of a sole proprietary broker: In the case of a corporation, partnership or association, one of the other “Partners” would take over running the company. If the broker that died was the designated broker, the remaining “Brokers” would notify the MREC which broker will now be designated.
The purpose of the temporary broker is to “terminate” or finish the existing transactions. Example, there are transactions that are waiting to close, so the “temporary broker” sees to it that the closings take place.
All listings die with the broker. The “temporary broker” notifies all existing clients (buyers, sellers, landlords, or tenants) they are free to work with another company.
The “temporary broker” sends all licenses back to the MREC, and the licensees have six (6) months to re-license to another broker.
Anyone can be designated as a temporary broker - licensed or unlicensed.
No examination and no fees are required for a temporary license.
Non-Resident Requirements (Reciprocity) - Salesperson
If an individual holds a current and active salesperson license in another state/jurisdiction at the time he/she applies for a Missouri salesperson license, he/she must pass the STATE portion of the Missouri salesperson exam and take the 24-hour Missouri Real Estate Practice (MREP) Course. The MREP course can be taken before or after the exam date but must be taken prior to applying for licensure. The 48-hour Missouri salesperson pre-examination course is not required. Application for licensure must be submitted to the MREC within 6 months of passing the STATE portion of the Missouri salesperson exam. A license (history) certification issued within 3 months from the real estate commission of the state/jurisdiction from the applicant's state of licensure must be provided with the application for licensure. A copy of the license is not acceptable. Certifications that are more than three months old, or do not reflect that the individual holds a current and active license, will cause the application to be deemed incomplete.
Non-Resident Requirements (Reciprocity) - Broker
Holds active salesperson license in another state and wishes to obtain a Missouri broker’s license, required to have 24 of last 30 months active salesperson experience, take the Missouri 48-hour broker pre-examination course, take BOTH portions of the Missouri broker exam and apply for licensure within six months of the 48-hour broker course completion date.
Holds a current and active broker license in another state (other than the state who have ONLY broker licenses) must have 24 of last 30 months active license experience as a salesperson or broker, pass the STATE portion of the Missouri broker exam, and apply for licensure within 6 months of passing the STATE portion of the Missouri broker exam. The 48-hour broker pre-examination course is not required.
If licensed in a state/jurisdiction that only issues broker licenses, Missouri will recognize the single license as a salesperson license.
A license (history) certification issued within three months from the real estate commission of the state/jurisdiction from where applying must be provided with the application for licensure. A copy of the license is not acceptable.
If planning to operate as a corporation, partnership, or LLC, the applicant will also need to obtain a real estate license for that entity.
