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COMMITTEE REPORT
February 2, 2000
H. 4304
S. Printed 2/2/00--H.
Read the first time January 11, 2000.
To whom was referred a Bill (H. 4304), to amend Section 40-57-135, Code of Laws of South Carolina, 1976, relating to duties of real estate brokers-in-charge and managers-in-charge, etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass:
HARRY F. CATO, for Committee.
TO AMEND SECTION 40-57-135, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DUTIES OF REAL ESTATE BROKERS-IN-CHARGE AND MANAGERS-IN-CHARGE, SO AS TO CLARIFY CERTAIN CIRCUMSTANCES UNDER WHICH A TRUST ACCOUNT MUST BE ESTABLISHED AND MAINTAINED.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 40-57-135(A)(1) of the 1976 Code, as added by Act 24 of 1997, is amended to read:
"(1) adequately supervise employees or associated licensees and maintain real estate trust accounts when required by law;"
SECTION 2. Section 40-57-135(B)(1) of the 1976 Code, as added by Act 24 of 1997, is amended to read:
"(1) The 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."
SECTION 3. Section 40-57-135(B)(7) of the 1976 Code, as added by Act 24 of 1997, is amended to read:
"(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) for real estate sales, 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 shall 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, and 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 shall must provide a means of reconciling the accounts;
(b) for property management, a journal or an accounting system containing, for property management, the same information as stated in item subitem (a) except that the required running balance may be determined at the time of reconciliation;
(c) when managing property, a separate record for each tenant must be maintained which shall identify 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) unless other appropriate written memoranda are maintained, trust account deposit documents shall identify the broker-in-charge or property manager-in-charge and the buyer or tenant 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 shall must include a written worksheet comparing the reconciled bank balance with the journal balance and with the ledger total to ensure agreement."
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