A Guide to Navigating South Carolina's Real Estate Law Updates:

What You Need to Know in 2024

The South Carolina Real Estate Practice Act has recently gone through a few significant updates, affecting professionals and licenses in the real estate business. These changes aim to enhance regulatory standards, improve transparency, and ensure consumer protection. Understanding these modifications is crucial for agents, brokers, and clients alike, as they navigate the evolving legal landscape of South Carolina real estate in 2024. 

The Big Points a.k.a. What You Most Likely Care About

There is a new name in real estate! No, it is not Lebron James. It is not even James Cameron (remember Avatar?). It is a new name for the initial license you get in South Carolina. 

Real estate salespersons in South Carolina will now be called a "real estate associate" or "associate." There was not a change for brokers. It’s a small change, certainly, but the legislature had to adjust almost every section of the Real Estate Practice Act to make this change.

 The recent updates also changed how long you must be licensed as an “associate” before getting your broker license. For those wanting to get your broker license, you previously had to be licensed for at least 3 years as a salesperson. Those wanting to become a broker or broker-in-charge will now have to be licensed for at least 5 years before they can run their own broker company. Also, completion of the 60-hour broker pre-license education is valid for 3 years instead of 5 now.

There are some small changes to the continuing education rules. All licensees are now allowed to carryover 4 hours of elective courses for the next renewal period. Also, non-resident licensees, aka non-South Carolina residents or reciprocal licensees are no longer permitted to count non-resident continuing education courses for South Carolina. 

Licenses that are lapsed are no longer cancelled after 6 months. Now if you let your license lapse, it will not be cancelled until 24 months after the license lapsed. This means you now have 2 years to complete any required continuing education and submit a license renewal application without having to retake any pre-license education. Also, practicing under a lapsed license is now considered practicing without a license and subject to disciplinary action.

 Lastly, there are two practice changes that are important to touch on. First, if you are representing a seller and they wish to reject an offer sent by a buyer, they must send an offer rejection notice form in writing within 48 hours of rejection. Also, when a licensee is buying or selling his/her own property, they must disclose their licensee status at the first substantive contact with a consumer AND in the advertising or marketing of the property AND in bold, underlined, and capital letters on the first page of the purchase contract or lease. Please read section 40-57-135(F) carefully.

Other Changes

There are a few changes to the advertisement rules in the Act. If you advertise a listing not associated with your broker company, you need written authorization to do so from the listing broker company and the advertisement must be clear which company is the listing brokerage. Advertisements for an individual licensee’s services, a real estate team’s services, or marketing a specific property must identify the full name of the broker company.

           Another change is the prohibition from licensees engaging in wholesaling. "Wholesaling" means having a contractual interest in purchasing residential real estate from a property owner, then marketing the property for sale to a different buyer prior to taking legal ownership of the property. Other states and real estate commissions are trying to regulate the practice of wholesaling as well. All brokerages and licensees in South Carolina cannot engage in, represent others in, or assist others in the practice of wholesaling.

           As you likely know, bad faith agreements are unenforceable and subject to disciplinary action. Language has been added to the statutes to clarify what is and is not a bad faith agreement. A bad faith agreement is any agreement regarding residential real estate that is in effect for longer than 1 year and attempts to either bind future owners or the heirs of the property, allows an assignment of the right providing a service to the property owner without notice, or an agreement that creates a lien, encumbrance, or other security interest on the property. For a list of what is not a bad faith agreement please read section 40-57-135(I)(9) & (I)(10).

           Lastly, there are some disciplinary rule changes. The use of AI in any work product is not by itself prohibited but licensees are responsible for any work product they use that was produced by AI means like ChatGPT. From now on Supervising licensees such as the broker in charge or then property manager in charge must attend disciplinary hearings of a supervised licensee being disciplined. Supervising licensees will also be sent copies of any complaint and documentation against their supervised licensees. The maximum fine amount has been raised to $10,000 per violation. Citations must be appealed within 10 days and paid within 30 days of becoming final.

It's important to understand the recent updates to the South Carolina Real Estate Practice Act. Now that you do, it won’t be easy to make those rookie mistakes. These changes are meant to improve rules, make things clearer, and protect consumers. By knowing about these changes and adjusting to them, agents, brokers, and clients can handle the changing real estate laws in South Carolina in 2024 more easily. This blog is not meant to provide legal advice and before taking any actions on these law changes, speak with your supervising broker and/or attorney.