SC Real Estate – State Portion

Associated Licensee
Licensee who is affiliated with a BIC
Broker
For a fee, salary, commission
Negotiates, Auctioins, Solicits a referral, Offers advisory services, Offers to act as an agent, Advertises
Broker-in-Charge
Has responsibility over actions of all associated licensees and real estate trust accounts
Client
Person with whom a licensee has an established agency relationship
Customer
Person with whom licensee has not established an agency relationship
Office
The principal office location where a BIC or PMIC is licensed to conduct real estate business
Branch Office
A secondary place of business apart from the principal or main office from which real estate business is conducted. A branch office usually must be run by a licensed real estate broker working on behalf of a the broker.
Real Estate License Law
State law enacted to protect the public from fraud, dishonesty and incompetence in the purchase and sale of real estate.
Rules and Regulations
Real estate licensing authority orders that governs licensees activities; they usually have the same force and effect as statutory law.
Police Power General
The government’s right to impose laws, statutes and ordinances, including zoning ordinances and building codes, to protect the public health, safety and welfare.
Enabling Acts
State legislation that confers zoning powers on municipal governments as well as other regulations
Stigmatized Property
A property that has acquired an undesirable reputation due to an event that occurred on or near it, such as violent crime, gang-related activity, illness or personal tragedy. Some states restrict the disclosure of information about stigmatized properties.
Stigma/Phsychological Defects
(1) Virus
(2) Death
(3) Sex Offenders
(4) Off-site hazards
Licensee not required to disclose, but if asked, answer honestly
Puffing
Exaggerated or superlative comments or opinions.
Types of Damages
Compensatory- actual damages
Punitive- punishment
Liquidated- dollar amount
Exemptions from License to sell Real Estate
Owner
Government Employees
Attorneys
Foresters
Trustees/receivers
State Legislatures
Body that enacts RE Laws
Real Estate Commision
Group of individuals charged by law with licensing and regulating practice of RE. Implement and enforce RE Laws
Members of the Real Estate Commission
(6) members professionally engaged in the active practice of real state, one from each of the six congressional districts
(2) members representing the public, appointed by governor
(1) additional member representing the public, active in RE
Department
Department of Labor, Licensing and Regulation
Licensee
An individual currently licensed by the commission
Property Manager
For a fee, salary, commission:
Negotiates, Lists or offers to provide services, Advertises for the rental or leasing of real estate
Property Manager-in-Charge
Responsibility over associated Property Managers and Real Estate Trust Accounts
Real Estate
Land, buildings and other appurtenances, including all interests in land whether corporeal, incorporeal, freehold, or non freehold in or outside of state
Real Estate Transaction
Sale, purchase, exchange or lease of real estate
Salesman
Licensee associated with a BIC
Trust Account
An escrow account or properly designated bank account established and maintained by a BIC or PMIC
SC REC
Created in 1956, Purpose is to protect public’s interest
SC REC Legislature/legal authority
Commission operates under the SC Department of LLR (Labor, Licensing and Regulation)
Police Power SCREC
The legislature makes the laws, the SCREC administers and enforces the laws through police power
Commission powers and duties
Standards for licensure, setting/enforcing license fees and non renewal penalties
License Renewal Penalty
$25 per month for up to 6 months and renewal fee, after 6 months, licenses are cancelled.
Promulgate regulations
SCREC suggests changes to legislature and publicizes regualations
SCREC Investigations
If they have knowledge, must initiate an investigation within 30 days
Disciplinary Hearings
SCREC will hold hearings in accordance with the Administrative Procedures Act
Rulings
Suspension, revocation and fines
Cease and desist orders
Other penalties
Appeals
Can be appealed to an ALJ – Administrative Law Judge
SCREC doesn’t get involved in?
Commission disputes and Trust funds disputes
Fines for activity without License
Misdemeanor – fined max of $500, prison max of 6 months or both
Issuance after revocatioin
Prove trustworthy and if education is more than 5 years old, they must take test again
Duties of BIC
Supervising employees and associated licensees
Reviewing/approving all forms
Maintaining contact with associated licensees
Instructing licensees on trust funds
Be available to public during normal business hours
Trust Accounts
Computerized records have back up location
Written office policy
May be over more than one company/office with commission approval
Associated Licensees
BIC must notify SCREC within 10 days of any change of office name or address
Agency disclosure not necessary if?
Rental or Lease
Solicitation of business
Sale of property by auction
Trust Acct Commingling
Can’t commingle funds with own money
Trust Acct Conversion
Can’t use funds for other uses
Receipt and Deposit of Earnest Money
Cash, checks, certified, other all must be deposited in 48 hours
Time requirement to keep Trust Records
5 years
Classification of Licensees
Broker, Salesman, Property Manager – no one may hold more than one license at a time
Also, no one can be licensed under more than one BIC at a time
Education Requirements
Must be within the last 5 years
Exceptions Juris Doctor (lawyer), Bachelor of Law degree or Bachelors majoring in real estate
Salesman Qualifications
18 years old, credit report, high school grad, 60 hours of classroom instruction, pass exam, 30 hours post-licensing class within 1 year
Broker Qualifications
21 years old, credit report, high school grad, 150 hours of classroom instruction, 3 years experience as salesman, pass exam
BIC Qualifications
21 years old, licensed broker or qualified as such, have ownership interest in company or actively engaged in mgt, credit report
PMIC Qualifications
21 years old, licensed broker or qualified as such, have ownership interest in company or actively engaged in mgt, credit report
Property Manager Qualifications
18 years old, credit report, high school grad, 30 hours of classroom instruction, pass exam
Renewal of License
Every 2 years. Must have 8 hours of CE and 2 of those hours must be in a “core” class. Taking more hours cannot carry over. No CE for Property Managers required.
Inactive license
Can go on inactive indefinitely, just must renew every 2 years on June 30th
Exempt from CE
1st year post licensing taken, inactive status, instructors of approved courses, broker over 65 who’s been licensed 25 years or more
Time for Recordkeeping Retention?
5 years
SC Real Property Assessment Rates
Primary residence = 4%
Other residential and rental/investment = 6%
Agricultural = 4% rollback
Mill
One-tenth of one cent. SC uses a mill rate to compute real estate taxes; for example, a rate of 52 mills would be $.052 tax for each dollar of assessed valuation of a property. May have county and city mills to add together.
Reassessment
Counties must revalue property every 5 years, can’t increase by more than 15% or ATI (assessable transfer of interest)
Tax Calculation
Market Value X assessment rate (4% or 6%) X millage = annual tax. Example:
$100,000 m.v. X 4% primary = $4,000 assessed value X 200 mills = $800 annual tax. (100,000 X .04 X .200 = 800)
Deed Stamps
$1.85 per $500 based on sales price (less mortgage assumed) Example:
Sales price = $106,100
Round up to 106,500 / 500 = 213
213 X 1.85 = 394.05 deed stamps
Tax Deductions
Mortgage interest and property tax
SC Homestead exemption
$50,000 reduction in appraised value if:
over 65 years old
totally blind
100% disabled
Capital Gain
Profit from the sale of an asset. $250,000 per person, $500,000 per couple
Chapter 3: Finance
1031 Tax Deferred Exchange
Referred to as “like-kind” properties, can defer capital gains tax
Boot
money or property given to make up any difference in value or equity between two properties in an exchange (1031)
Reconstruction Amendments
1865, Civil War ended –
Amendment 13 – abolished slavery
Amendment 14 – full citizenship to all
Amendment 15 – voting rights for all men
Civil Rights Act of 1866
An act that prohibits racial discrimination in the sale and rental of housing.
Title VIII of Civil Rights Act of 1968 (Federal Fair Housing Act)
Prohibits discrimination in housing based on race, color, religion, or national origin.
Jim Crow Laws
In southern states, made segregation of races legal
Jones vs. Mayer
Famous case in 1965 that upheld the Civil Rights Act of 1866 saying it applied to private sales, not just government
Fair Housing Act
The federal law that prohibits discrimination in housing based on race, color, religion, sex, handicap, familial status, and national origin.
Fair Housing Act Prohibited Practices
Blockbusting
Steering
Redlining
Protected Class
Any group of people designated as such by the Department of Housing and Urban Development (HUD) in consideration of federal and state civil rights legislation. Currently includes ethnic minorities, women, religious groups, the handicapped and others.
Protected Classes
Race, Color, Religion, National Origin, Sex, Familial Status, Handicap
Exemptions to Federal Fair Housing Law
Sale of single family home from person with 3 or fewer homes
Rental in owner occupied 1-4 family dwelling
Religious Organizations
Private Clubs
Retirement Communities – 62 or older, 80% 55 or older or housing for elderly
Equal Housing Opportunity Poster
Poster should be displayed in office
SC Fair Housing Law
SC’s own fair housing law
SCHAC – SC Human Affairs Commission has initial enforcement authority
180 days to file a complaint, 1 year to file suit
Civil penalties – $16,000 to $65,000
Blockbusting
The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry or prospective entry of persons of a particular race or national origin into the neighborhood.
Redlining
The illegal practice of a lending institution denying loans or restriction their number for certain areas of a community.
Steering
The illegal practice of channeling home seekers to particular areas, either to maintain the homogeneity of an area or to change the character of an area, this limits their choices of where they can live.
ADA
Americans with Disabilities Act – prohibits any discrimination that would deny the equal enjoyment of goods, services, facilities and accommodations of nonresidential facilities
Applies to employment discrimination for employers with more than 15 ee’s
Lead Paint
Applies to residential housing prior to 1978
Exclusions are:
Rentals less than 100 days
Retirement communities unless child under 6 living there
Efficiency units
Previously disclosed lease renewals
Commercial Property
Property that’s been inspected and no lead paint
Civil fines can run as high as $11,000
Antitrust Laws
Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate business involve either price-fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or markets (brokers agreeing to limit their areas of trade or dealing to certain areas or properties) or boycotting other firms.
Truth in Advertising
Administered by the Federal Trade Commission. Cannot make deceptive or misleading claims
SC Consumer Protection Act
SCCPC SC Consumer Protection Code 1976:
No max interest rate
Buyer can select attorney
If mortgage is assumed, max assumption fee is 1% or $400, whichever is less
Loan of $180,000 or less can be prepaid with no penalty
Disclosure of credit terms
SC Residential Landlord Tenant Act
Effective July 8, 1986, This act simplifies, modernizes, clarifies the law governing rentals and landlord and tenant responsibilities. This act only covers residential property.
Timelines/penalties for Landlords
Return security deposit within 30 days
14 days to repair/fix problem
Tenant remedies – recover sec deposit damages 3 times amount wrongfully withheld, 3 months rent, 3 times rent or 2 times damages
Timelines/penalties for Tenants
Remedy breach w/in 14 days or get out
If rent not paid w/in 5 days, landlord can evict, 3 times rent or 2 times damages, Landlord can dispose of property under $500 if tenant stopped utilities
Abandonment
Unexplained absence of tenant after 15 days of default of rent
Constructive eviction
When apartment becomes uninhabitable, i.e. no heat, water, electricity
SC Vacation Timesharing Plan Act
Register Plan
Must be a BIC
Must establish Trust Account
Have 5 days not including Sunday if last dat to rescind
Master Plan
A comprehensive plan to guide the long-term physical development of a particular area.
Time-share freehold estate
Ownership (fee simple interest) in property and owe annual maintenance fee
Penalties for violating SC Vacation Time Share Act
First – misdemeanor, not more than $5,000
Second – misdemeanor, not more than $5,000 or max of 6 months prison or both
Third – felony, not more than $5,000 or max of 5 years prison or both
SC Vacation Rental Act
Renters reservations are protected for 90 days after recording of deed.
Seller must disclose all rental agreements before contract signing
If new buyer isn’t going to honor rentals, must return deposits w/in 45 days of recording of deed
Megan’s Law
Federal legislation that promotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children or commits sexually violent crimes. Brokers should not research and refer clients to police department
Coastal Zone Management Act
Protect quality of the coastal environment. The OCRM (Ocean and Coastal Resource Management) is part of the SC DEHEC (Department of Health and Environmental Control)
Smoke Detectors
Required for rental properties
SC Non-resident tax
Must pay 7% tax on any capital gain of sale
SC Human Affairs Commission
Prevent unlawful discrimination in:
Employment
Housing
Public Accommodations
Blue-Sky Laws
SC Uniform Securities Act – Common name for those state and federal laws that regulate the registration and sale of investment securities.
SC High Cost and Consumer Home Loan Act
January 1, 2004 – protect consumers from bad lenders with abusive lending practices – Predatory lending
Superfund Amendments and Reauthorization Act (SARA)
an amendatory statute that contains stronger cleanup standards for contaminated sites, increased funding for Superfund and clarifications of lender liability and innocent landowner immunity. See CERCLA
Superfund
Popular name of the hazardous-waste cleanup fund established by the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
ESIGN 2000
Electronic Signatures in Global and National Commerce Act
SC Uniform Electronic Transactions Act 2004
SC specific guidelines for valid electronic signatures
Exceptions:
wills & trusts
termination of utilities
cancelation of health/life insurance
product recalls
foreclosure, eviction, acceleration notices credit/rental agreements in primary residence
Protecting Tenants at Foreclosure Act
2009, protects tenants in foreclosed properties – must give 90 days notice