Important License Law Changes Signed by Governor!
Governor Parson signed HB 273 and HB 476 into law this week. Both bills include important changes to Missouri's real estate license law. The following are the changes as they will appear in the statute:
Sec. 339.100 2. which gives the MREC authority to initiate a complaint with the Administrative Hearing Commission against any licensee for a number of listed acts was amended at Paragraph (24). The paragraph was amended to add a second paragraph and now reads as follows:
"(24) Use of any advertisement or solicitation which:
"(a) Is knowingly false, misleading or deceptive to the general public or persons to whom the advertisement or solicitation is primarily directed; or
"(b) Includes a name or team name that uses the terms "realty", "brokerage", "company", or any other terms that can be construed to advertise a real estate company other than the licensee or a business entity licensed under this chapter with whom the licensee is associated. The context of the advertisement or solicitation may be considered by the commission when determining whether a licensee has committed a violation of this paragraph;"
Sec. 339.150 was amended to add the following:
"4. Notwithstanding provisions of this chapter to the contrary, a broker may pay compensation directly to a business entity owned by a licensee that has been formed for the purpose of receiving compensation earned by such licensee. A business entity that receives compensation from a broker as provided for in this subsection shall not be required to be licensed under this chapter and shall be owned:
"(1) Solely by the licensee;
"(2) By the licensee together with the licensee's spouse, but only if the spouse and licensee are both licensed and associated with the same broker, or the spouse is not also licensed; or
"(3) By the licensee and one or more other licensees, but only if all such owners are licensees which are associated with the same broker.
"5. For purposes of subsection 4 of this section, the following terms shall mean:
"(1) 'Business entity', any corporation, partnership, limited partnership, limited liability company, professional corporation, or association;
"(2) 'Licensee', any real estate broker-salesperson or real estate salesperson, as such terms are defined under section 339.010."
- If you work in a real estate office that uses sales "teams" and those teams operate under a name other than the broker's regular business name or name under which the broker's firm is licensed, then:
- The name of the broker/brokerage must be in the advertising;
- The team name cannot include any wording that would indicate or imply to the public that the team is a separate real estate company.
- If you are a salesperson or broker-salesperson whose accountant has been urging you to set up an LLC or Sub-Chapter S corporation and have your broker make your commission checks payable to that entity for tax purposes, you can now do so without needing to have the entity licensed. This is the ONLY situation in which a broker can pay compensation to an unlicensed entity.
Read the MREC Newsletters!
In case you were unaware, the MREC has been issuing newsletters every January and July since July 2017. The most recent newsletter came out in January 2021 and can be viewed on their Website at https://pr.mo.gov/realestate.asp.
To view older newsletters, click on the "General" tab on the left side of the screen and scroll down and click on the "newsletters" link. Each newsletter is packed with important information. The Janauary 2021 newsletter contains answers to important questions about real estate forms and which forms licensees may use. MAREP members may find the MREC answers to frequently asked questions very interesting.