Watch Out For These 10 Common Infractions
As President of ReeceNichols Alliance, I have the pleasure of working with our franchise offices throughout Kansas and Missouri. And a couple weeks ago, I attended Missouri Business Meeting, where I learned a lot about where the real estate market in the state is heading. One of the most interesting takeaways from this event were the most ten commonly cited infractions by the Missouri Real Estate Commission. Watch out for these violations — they can sneak up on you!
#1: UNLICENSED ACTIVITY
This includes practicing real estate without renewing your license, receiving a commission without a license or not staying tax compliant. Bottom line: make sure to renew your license in a timely fashion!
#2: IMPROPER ADVERTISING
Without exception, you always have to include your broker and telephone information on your marketing materials. Got questions? Take a look at this post from our Chief Legal Officer Amy Ringsdorf.
#3: FAILURE TO RESPOND TO MREC
This is simple: always respond to MREC within the 30-day requirement.
#4: FAILURE TO DISCLOSE
Be sure to disclose material facts about your listing, your agency relationship and any relevant licensee’s interests.
#5: ESCROW ACCOUNTS
Ensure office escrow accounts are registered with MREC and that you also officially close accounts with MREC. Also, don’t commingle funds among your personal account, real estate sales account, property management account, etc.
#6: FICTITIOUS NAMES
Your office fictitious name(s) must be registered with the Missouri Secretary of State, and your business sign has to match your license. If agents do not abbreviate the name of the company — for instance, RN Alliance instead of ReeceNichols Alliance Inc., — that helps your broker. Otherwise, they have to register versions of the name or be cited in an audit.
#7: PAYING COMMISSIONS
We can’t pay commissions to unlicensed entities.
#8: CONTRACTS
Be overly careful when filling out forms. Watch out for blanks and un-initialed contract changes. If a blank does not default to “if left blank,” complete the information or list NA if it does not apply.
#9: OFFICE POLICY
Every office must have a written office policy addressing Fair Housing, RESPA, Harassment and Agency Disclosure among many other topics. If the description in the policy does not coincide with the way business is done, an audit will note this. A common violation is wrong agency relationships, i.e. designated agency is listed in MLS or the contract, but the office policy does not include designated agency.
#10: ADDRESS CHANGE
Always file address changes within 10 days with MREC.
