so a while back i asked about laws governing realtors who wholesale as well. there was a lot of responses so i figured i would go ahead and ask the South Carolina Real Estate commission what there position is on the subject.
This is basically what i got back (nothing edited) its kind of long.
Hello Mr. Williams,
The Commission does not have jurisdiction to take a broad/general position on contractual and transactional matters of this nature, only to make determinations on matters of interpretation and compliance with the requirements of the SC Real Estate licensing law. The Commission also avoids taking positions on matters unless necessary for interpretation or clarification of a requirement of Title 40 Chapter 57 of the S.C. Code of Laws.
I am not familiar with the scenarios you speak of personally, but if there is conduct in any of these transactions by a real estate licensee that would potentially fall under “grounds for denial or disciplinary action” under the South Carolina 40-57-145, then complaints should be filed for investigation alleging the specific conduct that one believes to be in violation of the practice act.
SECTION 40-57-145. Grounds for denial of issuance of license or for disciplinary action
(A) In addition to Section 40-1-110, the commission may deny issuance of a license to an applicant or may take disciplinary action against a licensee who:
(1) makes a substantial misrepresentation involving a real estate transaction;
(2) makes false promises of a character likely to influence, persuade, or induce;
(3) pursues a continued and flagrant course of misrepresentation or makes false and misleading promises through associated licensees or through any medium of advertising or otherwise;
(4) in the practice of real estate demonstrates bad faith, dishonesty, untrustworthiness, or incompetency in a manner as to endanger the interest of the public;
(5) represents or attempts to represent a real estate broker other than his broker-in-charge or property manager-in-charge without the express knowledge and written consent of the employing broker-in-charge or property manager-in-charge;
(6) guarantees or authorizes and permits any associated licensee to guarantee future profits from the resale of real estate;
(7) makes a dual set of contracts, written or otherwise, by stating a sales price higher than the actual sales price in an effort to obtain a larger loan from a lender or lending institution or for the purpose of misinforming a governmental agency or any other reason;
(8) is convicted of violating the federal and state fair housing laws, forgery, embezzlement, breach of trust, larceny, obtaining money or property under false pretense, extortion, fraud, conspiracy to defraud, or has been convicted of a violent crime as defined in Section 16-1-60, has been convicted during the previous five years of a felony directly related to the practice of the profession, or has been convicted during the previous seven years of a felony, an essential element of which is dishonesty, reasonably related to the practice of the profession, or pleading guilty or nolo contendere to any such offense in a court of competent jurisdiction of this State, any other state, or any federal court;
(9) fails to report to the department in writing by certified mail, within ten days, notice of conviction of a crime provided for in item (8);
(10) fails, within a reasonable time, to account for or to remit any monies coming into his possession which belong to others;
(11) pays a commission or compensation to an unlicensed individual for activities requiring a license under this chapter. Notwithstanding this section, a licensee may not pay or offer to pay a referral fee or finder's fee to an unlicensed individual that is not a party in the real estate transaction;
(12) violates any provision of law relating to a buyer's freedom of choice in choosing an attorney, insurance agent, title insurance agent, or any other service provider to facilitate the buyer's real estate transaction;
(13) fails to disclose in accordance with Section 40-57-139 the party or parties for whom the licensee will be acting as an agent in a real estate transaction;
(14) receives compensation in a real estate transaction or directly resulting from a real estate transaction from more than one party except with the full knowledge and written consent of all parties;
(15) represents more than one party in a real estate transaction without the full written knowledge and consent of all parties the licensee represents as provided in Section 40-57-137(M);
(16) acts in the dual capacity of agent and undisclosed principal in a real estate transaction;
(17) accepts deposit money which is to be delivered to the licensee's principal in a real estate transaction without informing the payor and having the payor acknowledge in writing who will hold the money received by the licensee;
(18) issues a check in connection with his real estate business which is returned for insufficient funds or closed account;
(19) fails to disclose in accordance with Section 40-57-137 any material facts concerning a real estate transaction;
(20) violates any provision of this chapter or a regulation promulgated under this chapter;
(21) violates a rule or order of the commission.
(22) induces a party to break a contract of sale or lease, listing agreement, or buyer agency agreement;
(23) engages in a practice or takes action inconsistent with the agency relationship that other real estate licensees have established with their clients;
(24) fails upon probable cause of an investigator of the commission to make all records required to be maintained under this chapter available to the commission for inspection and copying by the commission or fails to appear upon probable cause for an interview with an investigator of the commission.
(B) If after an investigation, charges of a violation are brought against a licensee, the broker-in-charge or property manager-in-charge must be notified of the charges.
Fax: (803) 896-4427
email: [email protected]
@Daryl Williams The short answer is to ask your managing broker. He or she will know the laws well enough to steer you in the right direction. The last thing they want to do is let one of their agents get outside the law so they will be highly motivated to make sure you're in compliance. As an agent, I wouldn't do anything without my broker's explicit consent. If they lead you down the wrong path, they'll be held liable for it which should take (some) heat off you. They obviously don't want anything like that to happen so they're going to make sure you're doing it right.
i did ask him and he basically said that if were to do that just make sure that i DISCLOSE everything but alot of people on here still don't think it's ok.
@Daryl Williams , I wouldn't be concerned about what "everybody" on here says about it being wrong. 😉 Every state and broker(age) is different. You've talked talked to YOUR broker and it sounds like he pretty much gave you the green light to move forward. Just make sure do as he said and DISCLOSE! 😊. Now, GO. MAKE. THAT. MONEY! 😎
Originally posted by @Renee Cato :
@Daryl Williams, I wouldn't be concerned about what "everybody" on here says about it being wrong. 😉 Every state and broker(age) is different. You've talked talked to YOUR broker and it sounds like he pretty much gave you the green light to move forward. Just make sure do as he said and DISCLOSE! 😊. Now, GO. MAKE. THAT. MONEY! 😎