House Amendment 1
H 4754 - Session 125 (2023-2024)
Real Estate Associates

The Committee on Labor, Commerce and Industry proposes the following amendment (LC-4754.PH0003H):

Amend the bill, as and if amended, SECTION 2, by striking Section 40-57-725(A) and inserting:

 (A) The department may refer any reports of violations of this chapter and Article 1, Chapter 1 of this title or any reports of violations of regulations promulgated under this chapter directly to the commission or may issue administrative citations and cease and desist orders in person or by certified mail and may assess administrative penalties against any individual or entity, including unlicensed individuals, for violations of this chapter as specified by the commission.

Amend the bill further, SECTION 2, by striking Section 40-57-725(C)(3) and inserting:

  (3) for the third or subsequent violation of the same or substantially similar provision in a five-year period, not more than a ten thousand dollar penalty.

Amend the bill further, SECTION 2, by striking Section 40-57-725(D) and inserting:

 (D) An individual or entity assessed administrative penalties may appeal those penalties to the commission within ten days of receipt of the citation. If an appeal is filed, the department shall schedule a hearing before the commission, which shall make a determination in the matter. If no appeal is filed, the citation is deemed a final order and the administrative penalties must be paid within thirty days of receipt of the citation.

Amend the bill further, SECTION 3, by striking Section 40-57-30(2) and inserting:

 (2) "Agency relationship" means a legally binding relationship created in writing between a real estate brokerage firm and its client.

Amend the bill further, SECTION 3, by striking Section 40-57-30(4) and inserting:

 (4) "Alternative name" means a first name, other than the licensee's legal first name, that is registered with the commission and used by the licensee for marketing purposes.

Amend the bill further, SECTION 3, page 4, line 31 by deleting Section 40-57-30(6)(b).

Amend the bill further, SECTION 3, by striking Section 40-57-30(7) and inserting:

 (4)(7) "Broker-in-charge" means athe sole broker designated by the commision to have responsibility over the actions of all associatedsupervised licensees and also has the responsibility and control over and liability for a real estate trust account. A broker-in-charge is responsible for:
  (a) the day-to-day management of the brokerage firm;
  (b) the control and liability for a real estate trust account; and
  (c) ensuring compliance with all applicable laws and regulations.
The authority granted to the broker-in-charge cannot be assigned or designated to another licensee.

Amend the bill further, SECTION 3, by deleting Section 40-57-30(11).

Amend the bill further, SECTION 3, by striking Section 40-57-30(21) and inserting:

 (21) "Incompetency" means the failure of a licensee to demonstrate and apply the knowledge, skill, and care that is ordinarily possessed and exercised by other licensees of the same licensure status and required by the generally accepted standards of the profession. Charges of incompetence may be based upon a single act of incompetence or upon a course of conduct or series of acts or omissions that extend over a period of time and that, taken as a whole, demonstrate incompetence.

Amend the bill further, SECTION 3, by striking Section 40-57-30(23) and inserting:

 (23) "Letter of Caution" means a written caution or warning about past or future conduct issued when it is determined that only minor misconduct not warranting discipline has been committed. The issuance of a letter of caution is not a form of discipline and does not constitute a finding of misconduct unless the letter of caution specifically states that misconduct has been committed. While nondisciplinary, the fact that a letter of caution has been issued may be considered in a subsequent disciplinary proceeding.

Amend the bill further, SECTION 3, by striking Section 40-57-30(45) and inserting:

 (45) "Wholesaling" means having a contractual interest in purchasing residential real estate from a property owner, then marketing the property for sale to a different buyer prior to taking legal ownership of the property. Advertising or marketing real estate owned by another individual or entity with the expectation of compensation falls under the definition of "broker" and requires licensure.

Amend the bill further, SECTION 3, by striking Section 40-57-110(E) and inserting:

 (E) A license that has lapsed and is not reinstated by the last day of the sixthtwenty-fourth month following expiration is canceled.

Amend the bill further, SECTION 3, by striking Section 40-57-135(B) and inserting:

 (B) An associatedA supervised licensee may not receive compensation from an activity requiring a real estate license from an entity or person other than the one for which the license is issued. An associatedA supervised licensee may form a business entity allowing the licensee's broker-in-charge or property manager-in-charge to pay fees or commissions to that entity if the principals in that entity hold an active real estate license.

Amend the bill further, SECTION 3, by deleting Section 40-57-135(E)(2)(c).

Amend the bill further, SECTION 3, by striking Section 40-57-135(I)(5) and inserting:

  (5) If an offer is rejected without counter, an offer rejection form, promulgated by the commission, signed by the licensee affirming presentation of the offer must be provided to the offeror by the licensee within forty-eight hours of rejection, whether the agent of the buyer, the seller, or if acting as a transaction broker.

Amend the bill further, SECTION 3, by striking Section 40-57-330(C) and inserting:

 (C) When a designated broker-in-charge becomes disassociated with the office registered with the commission, the broker-in-charge shall notify the commission within five days. The broker-in-charge designation will be removed and the licensee's license will be deactivated.

Amend the bill further, SECTION 3, by striking Section 40-57-340(A)(1) and (2) and inserting:

  (1) A broker or salesperson associate shall submit to a criminal background check upon every third renewal as required for initial applicants pursuant to Section 40-57-115 and shall provide proof of satisfactory completion biennially of ten hours of continuing education in courses. The ten hours must include a minimum of four hours of instruction in mandated topics.
  (2) A broker-in-charge shall submit to a criminal background check upon every third renewal as required for initial applicants pursuant to Section 40-57-115 and shall provide proof of satisfactory completion biennially of ten hours of continuing education in courses approved by the commission. The ten hours must include a minimum of four hours of instruction in mandated topics for a broker or salesperson associate license and four hours of continuing education must be in advanced real estate topics designed for brokers-in-charge.

Amend the bill further, SECTION 3, by striking Section 40-57-370(E) and inserting:

 (E) For all real estate transactions, no agency relationship between a buyer, seller, landlord, or tenant and a real estate brokerage firm and its associated licensees exists unless the buyer, seller, landlord, or tenant and the brokerage company and its associated licensees agree, in writing, to the agency relationship. No type of agency relationship may be assumed by a buyer, seller, landlord, tenant, or licensee or created orally or by implication. A real estate brokerage firm may not be considered to have an agency relationship with a party or have agency obligations to a party but is responsible only for exercising reasonable care in the discharge of the real estate brokerage firm's specified duties, as provided in this chapter, and, in the case of a client, as specified in the agency agreement.

Amend the bill further, SECTION 3, by striking Section 40-57-710(A)(9) and inserting:

  (9) is convicted of violating the federal and state fair housing laws, forgery, embezzlement, breach of trust, larceny, obtaining money or property under false pretense, extortion, fraud, conspiracy to defraud, or any other crime involving the theft or taking of the property belonging to another, or has been convicted of a felony sex-related, felony drug-related, felony real estate-related, felony financial, or felony violent offense, or pleading guilty or nolo contendere to such an offense in a court of competent jurisdiction of this State, another state, or a federal court;

Amend the bill further, SECTION 3, by striking Section 40-57-710(A)(26) and inserting:

  (26) fails to promptly submit all offers and counteroffers in a real estate sales transaction;

Amend the bill further, SECTION 3, by striking Section 40-57-710(B) and inserting:

 (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. In the event a supervised licensee is noticed for a formal complaint hearing or otherwise appears before the commission to resolve the charges, the broker-in-charge or property manager-in-charge of record during the events in question must also attend the hearing. Unless the broker-in-charge or property manager-in-charge can show good cause as to why he failed to appear, the absence may result in the broker-in-charge or property manager-in-charge facing disciplinary action at the discretion of the commission.

Amend the bill further, SECTION 3, by striking Section 40-57-720(C)(3) and inserting:

  (3) The commission shall render a decision and shall serve, within ninety days, notice, in writing, of the commission's decision to the licensee charged. The commission also shall state in the notice the date upon which the ruling or decision becomes effective.

Amend the bill further, by adding an appropriately numbered SECTION to read:

SECTION X. Article 7, Chapter 57, Title 40 of the S.C. Code is amended by adding:

 Section 40-57-820. A licensee under this chapter is responsible for any and all work product produced by him or with the assistance of artificial intelligence, machine learning, or similar programs. A violation of this chapter that is committed through the use of these programs will be treated as if the violation was committed directly by the licensee.

Amend the bill further, by striking SECTIONS 4 and 5 and inserting:

SECTION 4.  Sections 40-57-135(E)(2) and 40-57-360 take effect twelve months after the date of ratification of the act.

SECTION 5. Except as otherwise provided, this act takes effect upon approval by the Governor.