The Missouri Real Estate Commission is the governing body tasked with safeguarding the interests and welfare of the general public in matters pertaining to real estate transactions. Under the Real Estate Act of 1941, it’s responsibilities include: licensing of agents and brokers, investigating complaints from the public, auditing brokerages and escrow accounts, and approving pre-licensing and continuing education courses.
This article will discuss the 10 most commonly cited infractions discovered during audits conducted at random by the MREC.
- UNLICENSED ACTIVITY
It is unlawful to practice real estate without a valid license. Here are some incidents of non-licensed activity. License Not Renewed – Every two years real estate agents and brokers are required to take continuing education classes to renew their licenses.
Not Tax Compliant – Licensees are suspended in Missouri for non payment of personal property taxes under HB-600.
Property Management – If you are not the owner, you are required to have a real estate license to manage property in Missouri.
Receiving A Commission – without a license.
- IMPROPER ADVERTISING & MARKETING
Not Identifying The Brokerage – The MREC requires all advertising material to clearly identify the Company or Brokerage name that the agent works for, and the office telephone number (at a minimum). With the rise of teams and agent personal branding, this violation occurs when the brokerage name and number are not prominently displayed.
- FAILURE TO RESPOND TO MREC
Licensees are required to respond to the MREC within 30 days.
- FAILURE TO DISCLOSE
Material Facts – Agents are required to disclose material facts and adverse material facts that they know about the property to a customer.
Incorrect Agency or Agency Not Disclosed – Missouri law requires agents to discuss the different options consumers have when working with them.
Licensee’s Interest – Agents are required to inform all parties to a transaction if they have personal interest in a property or if they are a relative of the owner.
- ESCROW ACCOUNTS
Escrow accounts are where the public’s earnest money is held. Violations include:
Escrow Accounts Not Registered – Escrow accounts are required to be registered with the MREC.
Failure To Close Escrow Account – This is required when a brokerage closes.
Comingling of Funds – Mixing escrow funds with personal, real estate sales, or property management funds is strictly forbidden.
Accounts Do Not Reconcile.
- FICTITIOUS NAMES
Name Not Registered – ‘Doing Business As’ or Fictitious Names need to be registered with Secretary of State of Missouri.
Registered Name Has Expired.
Business Sign Does Not Match The Business License.
- PAYING COMMISSIONS
To An Unlicensed Persona or Entity – LLC, team, group
Blanks – There are to be no blanks on standard forms.
Failure To Fulfill The Terms And Conditions – pertaining to the contract.
Improper Agency Relationship Selected On Contract – needs to match any written documentation (buyer agency or listing agreement).
Changes To The Contract Not Initialed – the only lawful changes to a contract are those that are initialed by all parties.
- OFFICE POLICY
No Office Policy – it is a violation for an office to not have an office policy or an incorrect office policy.
- ADDRESS CHANGE
Not filed with the MREC – all licensees must update their home addresses with the MREC when a change occurs. Brokerages are also required to keep their address current.
Mastroianni Consulting is a unique consultancy firm assisting Realtors to grow their real estate practice. For more information and to learn how we can help you become more successful, please contact one of our Client Care Specialists.
You can reach us at (636) 220-7481 or firstname.lastname@example.org.
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