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In your Office Policy Manual, Include MREC Laws, Rules and Regulations

Part 1601 Chapter 3: Administration/Conducting Business Rule 3.1

General Rules

A. It shall be the duty of the responsible broker to instruct the licensees licensed under that broker in the fundamentals of real estate practice, ethics of the profession and the Mississippi Real Estate License Law and to exercise supervision of their real estate activities for which a license is required.

A real estate broker who operates under the supervision of a responsible broker must not at any time act independently as a broker.

B. The responsible broker shall at all times be responsible for the action of the affiliated broker to the same extent as though that licensee were a salesperson and that affiliated broker shall not perform any real estate service without the full consent and knowledge of his employing or supervising broker.

However, should the responsible broker agree that a broker under his supervision may perform certain real estate services outside the responsible broker’s supervision or direction the responsible broker shall notify the Commission in writing as to the exact nature of such relationship and the names of the broker or brokers involved.

The responsible broker shall immediately notify the Commission in writing upon the termination of such relationship.

C. A licensed Mississippi broker may cooperate with a broker licensed in another state who does not hold a Mississippi license through the use of a cooperative agreement.

A separate cooperative agreement must be filed for each property, prospective user or transaction with said writing reflecting the compensation to be paid to the Mississippi licensed broker.

The listing or property management agreement for the Mississippi real property shall in such cases remain in the name of the Mississippi licensed broker.

The commissions or other compensation resulting from the sale/rent/lease/property management or auction of the Mississippi real property and which are earned during the period the cooperative agreement is in force shall be divided on a negotiable basis between the Mississippi broker and the nonresident broker.

A responsible (principal) nonresident broker described herein is defined as an active, licensed responsible real estate broker of another state who does not possess an active responsible nonresident real estate broker’s license issued by the Mississippi Real Estate Commission (MREC).

A Mississippi broker described herein is a responsible (principal) real estate broker whose license is on active status and whose license was issued by MREC either as a responsible resident Mississippi broker or as a responsible nonresident Mississippi broker.

The responsible nonresident broker cannot place any sign on real property located in the state of Mississippi without the written consent of the cooperating responsible Mississippi broker. When the consent is obtained, the sign of the responsible Mississippi broker must be placed in a prominent place and in close proximity to the responsible nonresident broker’s sign.

Any licensed responsible Mississippi broker assisting or cooperating in the sale, lease, property management, rental or auction of real property within the state of Mississippi with a responsible nonresident broker who fails or refuses to list his or her name in such advertisement, or fails or refuses to cross-list such property with him or her, in writing, shall be deemed in violation of Section 73-35-11 of the Real Estate Broker’s License Act, and shall be subject to a revocation or suspension of his or her license.

In such instance herein where a responsible Mississippi broker enters into a cooperative agreement with a responsible nonresident broker pertaining to the sale of real property within the state of Mississippi, the responsible Mississippi broker must file two copies o fthe cooperating agreement with the Mississippi Real Estate Commission.

D. A responsible broker must maintain an office and display the license therein. If the broker has more than one office, the broker shall display a branch office license in each branch office. The broker is responsible for the real estate practices of those licensees.

E. No licensee shall pay any part of a fee, commission, or other compensation received by such licensee in buying, selling, exchanging, leasing, auctioning or renting any real estate except to another licensee through the licensee’s responsible broker. No licensee shall knowingly pay a commission, or other compensation to a licensed person knowing that licensee will in turn pay a portion or all of that which is received to a person who does not hold a real estate license. A licensee who has changed to inactive status or who has transferred to another responsible broker may receive compensation from the previous responsible broker if the commission was generated from activity during the time that the licensee was under the supervision of that responsible broker.

F. Any licensee who fails in a timely manner to respond to official Mississippi Real Estate Commission written communication or who fails or neglects to abide by Mississippi Real Estate Commission’s Rules and Regulations shall be deemed, prima facie, to be guilty of improper dealing.

G. A real estate broker or salesperson in the ordinary course of business may give an opinion as to the sales price of real estate for the purpose of a prospective listing or sale; however, this opinion as to the listing price or the sale price shall not be referred to as an appraisal and must be completed in compliance with Section 73-35-4 of the Real Estate Broker’s License Act and must conform to the Standards established by the National Association of Broker Price Opinion Professionals (NABPOP).

H. When an offer is made on property owned by a party with whom a broker has entered into a listing agreement, such broker shall document and date the seller’s personal acceptance or rejection of the offer and upon written request, shall provide a copy of such document to the person making the offer.

I. A real estate licensee shall not be exempt from disciplinary actions by the commission when selling property owned by the licensee.

Part 1601 Chapter 4: Agency Relationship Disclosure Rule 4.1

Purpose Consumers shall be fully informed of the agency relationships in real estate transactions identified in Section 73-35-3.

This rule places specific requirements on Brokers to disclose their agency relationship.

This does not abrogate the laws of agency as recognized under common law and compliance with the prescribed disclosures will not always guarantee that a Broker has fulfilled all of his responsibilities under the common law of agency.

Compliance will be necessary in order to protect licensees from impositions of sanctions against their license by the Mississippi Real Estate Commission. Special situations, where unusual facts exist or where one or more parties involved are especially vulnerable, could require additional disclosures not contemplated by this rule. In such cases, Brokers should seek legal advice prior to entering into an agency relationship.

Miss. Code Ann. §73-35-3 Rule 4.2 Definitions

A. “Agency” shall mean the relationship created when one person, the Principal (client), delegates to another, the agent, the right to act on his behalf in a real estate transaction and to exercise some degree of discretion while so acting. Agency may be entered into by expressed agreement, implied through the actions of the agent and or ratified after the fact by the principal accepting the benefits of an agent’s previously unauthorized act. An agency gives rise to a fiduciary relationship and imposes on the agent, as the fiduciary of the principal, certain duties, obligations, and high standards of good faith and loyalty.

B. “Agent” shall mean one who is authorized to act on behalf of and represent another. A real estate broker is the agent of the principal (client) to whom a fiduciary obligation is owed. Salespersons licensed under the broker are subagents of the Broker, regardless of the location of the office in which the salesperson works.

C. “Client” shall mean the person to whom the agent owes a fiduciary duty. It can be a seller, buyer, landlord, tenant or both.

D. “Compensation” is that fee paid to a broker for the rendering of services. Compensation, when considered alone, is not the determining factor in an agency relationship. The relationship can be created regardless of whether the seller pays the fee, the buyer pays the fee, both pay the fee or neither pays a fee.

E. “Customer” shall mean that person not represented in a real estate transaction. It may be the buyer, seller, landlord or tenant.

F. “Disclosed Dual Agent” shall mean that agent representing both parties to a real estate transaction with the informed consent of both parties, with written understanding of specific duties and representation to be afforded each party. There may be situations where disclosed dual agency presents conflicts of interest that cannot be resolved without breach 11 of duty to one party or another. Brokers who practice disclosed dual agency should do so with the utmost caution to protect consumers and themselves from inadvertent violation of demanding common law standards of disclosed dual agency.

G. “Fiduciary Responsibilities” are those duties due the principal (client) in a real estate transaction are:

(1) ‘Loyalty’ – the agent must put the interests of the principal above the interests of the agent or any third party.

(2) ‘Obedience’ – the agent agrees to obey any lawful instruction from the principal in the execution of the transaction that is the subject of the agency.

(3) ‘Disclosure’ – the agent must disclose to the principal any information the agent becomes aware of in connection with the agency.

(4) ‘Confidentiality’ – the agent must keep private information provided by the principal and information which would give a customer an advantage over the principal strictly confidential, unless the agent has the principal’s permission to disclose the information. This duty lives on after the agency relationship is terminated.

(5) ‘Reasonable skill, care and diligence’ – the agent must perform all duties with the care and diligence which may be reasonably expected of someone undertaking such duties.

(6) ‘Full accounting’ – the agent must provide a full accounting of any money or goods coming into the agent’s possession which belong to the principal or other parties.

“First Substantive Meeting” shall be:

(1) In a real estate transaction in which the Broker is the agent for the seller, first substantive meeting shall be before or just immediately prior to the first of any of the following:

(a) Showing the property to a prospective buyer.

(b) Eliciting confidential information from a buyer concerning the buyers’ real estate needs, motivation, or financial qualifications.

(c) The execution of any agreements governed by Section 73-35-3 of the Mississippi Code of 1972 Annotated.

(2) For the seller’s agent, the definition shall not include:

(a) A bona fide “open house” or model home showing which encompasses (1)(a) above only; however, whenever an event described in (1)(b) or (1)(c) occurs, disclosure must be made.

(b) Preliminary conversations or “small talk” concerning price range, location and property styles.

(c) Responding to general factual questions from a prospective buyer concerning properties that have been advertised for sale or lease.

(3) In a real estate transaction in which the Broker is the agent for the buyer, first substantive meeting shall be at the initial contact with a seller or a seller’s agent or before or just immediately prior to the first of any of the following:

(a) Showing the property of a seller to a represented buyer.

(b) Eliciting any confidential information from a seller concerning their real estate needs, motivation, or financial qualifications.

(c) The execution of any agreements governed by Section 73-35-3 of the MS Code. (

4) For the buyer’s agent, the definition shall not include:

(a) A bona fide “open House” or model home showing which encompasses (3)(a) above only; however, whenever an event described in (3)(b) or (3)(c) occurs, disclosure must be made.

(b) Preliminary conversations or “small talk” concerning price range, location and property styles.

(c) Responding to general factual questions from a prospective buyer concerning properties that have been advertised for sale or lease.

I. “Single Agency” shall mean a broker who has chosen to represent only one party to a real estate transaction. It may be either the buyer, seller, lessor or lessee or any party in a transaction governed by Section 73-35-3

§89-1-519. Agent; extent of agency

Any person or entity, other than a duly licensed real estate broker or salesperson acting in the capacity of an escrow agent for the transfer of real property subject to Sections 89-1-501 through 89-1-523 shall not be deemed the agent of the transferor or transferee for purposes of the disclosure requirements of Sections 89-1-501 through 89-1-523, unless the person or entity is empowered to so act by an express written agreement to that effect. The extent of such an agency shall be governed by the written agreement.

 

§73-35-11. Nonresident may not act except in cooperation with licensed broker of state It shall be unlawful for any licensed broker, salesperson or other person who is not licensed as a Mississippi resident or nonresident broker or salesperson and a licensed broker or licensed salesperson in this state to perform any of the acts regulated by this chapter, except that a licensed broker of another state who does not hold a Mississippi real estate license may cooperate with a licensed broker of this state provided that any commission or fee resulting from such cooperative negotiation shall be stated on a form filed with the commission reflecting the compensation to be paid to the Mississippi broker.

Whenever a Mississippi broker enters into a cooperative agreement under this section, the Mississippi broker shall file within ten (10) days with the commission a copy of each such written agreement.

By signing the agreement, the nonresident broker who is not licensed in this state agrees to abide by Mississippi law, and the rules and regulations of the commission; and further agrees that civil actions may be commenced against him in any court of competent jurisdiction in any county of this state in which a claim may arise.

The Mississippi broker shall require a listing or joint listing of the property involved. The written cooperative agreements shall specify all material terms of each agreement, including but not limited to its financial terms.

The showing of property located in Mississippi and negotiations pertaining thereto shall be supervised by the Mississippi broker.

In all advertising of real estate located in Mississippi, the name and telephone number of the Mississippi broker shall appear and shall be given equal prominence with the name of the nonresident broker who is not licensed in this state.

The Mississippi broker shall be liable for all acts of the above cooperating broker, as well as for his own acts, arising from the execution of any cooperative agreement.

The Mississippi broker shall determine that the cooperating broker is licensed as a broker in another state. All earnest money pertaining to a cooperative agreement must be held in escrow by the Mississippi broker unless both the buyer and seller agree in writing to relieve the Mississippi broker of this responsibility.

§73-35-21. Grounds for refusing to issue or suspending or revoking license; hearing

(1) The commission may, upon its own motion and shall upon the verified complaint in writing of any person, hold a hearing for the refusal of license or for the suspension or revocation of a license previously issued, or for such other action as the commission deems appropriate.

The commission shall have full power to refuse a license for cause or to revoke or suspend a license where it has been obtained by false or fraudulent representation, or where the licensee in performing or attempting to perform any of the acts mentioned herein, is deemed to be guilty of:

(a) Making any substantial misrepresentation in connection with a real estate transaction;

(b) Making any false promises of a character likely to influence, persuade or induce;

(c) Pursuing a continued and flagrant course of misrepresentation or making false promises through agents or salespersons or any medium of advertising or otherwise;

(d) Any misleading or untruthful advertising; (e) Acting for more than one (1) party in a transaction or receiving compensation from more than one (1) party in a transaction, or both, without the knowledge of all parties for whom he acts;

(f) Failing, within a reasonable time, to account for or to remit any monies coming into his possession which belong to others or commingling of monies belonging to others with his own funds. Every responsible broker procuring the execution of an earnest money contract or option or other contract who shall take or receive any cash or checks shall deposit, within a reasonable period of time, the sum or sums so received in a trust or escrow account in a bank or trust company pending the consummation or termination of the transaction. “Reasonable time” in this context means by the close of business of the next banking day;

(g) Entering a guilty plea or conviction in a court of competent jurisdiction of this state, or any other state or the United States of any felony;

(h) Displaying a “for sale” or “for rent” sign on any property without the owner’s consent;

(i) Failing to furnish voluntarily, at the time of signing, copies of all listings, contracts and agreements to all parties executing the same;

(j) Paying any rebate, profit or commission to any person other than a real estate broker or salesperson licensed under the provisions of this chapter;

(k) Inducing any party to a contract, sale or lease to break such contract for the purpose of substituting in lieu thereof a new contract, where such substitution is motivated by the personal gain of the licensee;

(l) Accepting a commission or valuable consideration as a real estate salesperson for the performance of any of the acts specified in this chapter from any person, except his employer who must be a licensed real estate broker; or

(m) Failing to successfully pass the commission’s background investigation for licensure or renewal as provided in Section 73-35-10; or

(n) Any act or conduct, whether of the same or a different character than hereinabove specified, which constitutes or demonstrates bad faith, incompetency or untrustworthiness, or dishonest, fraudulent or improper dealing. However, simple contact and/or communication with any mortgage broker or lender by a real estate licensee about any professional, including, but not limited to, an appraiser, home inspector, contractor, and/or attorney regarding a listing and/or a prospective or pending contract for the lease, sale and/or purchase of real estate shall not constitute conduct in violation of this section.

(2) No real estate broker shall practice law or give legal advice directly or indirectly unless said broker be a duly licensed attorney under the laws of this state. He shall not act as a public conveyancer nor give advice or opinions as to the legal effect of instruments nor give opinions concerning the validity of title to real estate; nor shall he prevent or discourage any party to a real estate transaction from employing the services of an attorney; nor shall a broker undertake to prepare documents fixing and defining the legal rights of parties to a transaction. However, when acting as a broker, he may use an earnest money contract form.

A real estate broker shall not participate in attorney’s fees, unless the broker is a duly licensed attorney under the laws of this state and performs legal services in addition to brokerage services.

(3) It is expressly provided that it is not the intent and purpose of the Mississippi Legislature to prevent a license from being issued to any person who is found to be of good reputation, is able to give bond, and who has lived in the State of Mississippi for the required period or is otherwise qualified under this chapter.

(4) In addition to the reasons specified in subsection (1) of this section, the commission shall be authorized to suspend the license of any licensee for being out of compliance with an order for support, as defined in Section 93-11-153.

The procedure for suspension of a license for being out of compliance with an order for support, and the procedure for the reissuance or reinstatement of a license suspended for that purpose, and the payment of any fees for the reissuance or reinstatement of a license suspended for that purpose, shall be governed by Section 93-11-157 or 93-11-163, as the case may be.

If there is any conflict between any provision of Section 93-11-157 or 93-11-163 and any provision of this chapter, the provisions of Section 93-11-157 or 93-11-163, as the case may be, shall control.

(5) Nothing in this chapter shall prevent an associate broker or salesperson from owning any lawfully constituted business organization, including, but not limited to, a corporation, limited liability company or limited liability partnership, for the purpose of receiving payments contemplated in this chapter.

The business organization shall not be required to be licensed under this chapter and shall not engage in any other activity requiring a real estate license.§73-35-23.

Powers of commission as to violations; hearings upon revocation; subpoena

(1) The commission is hereby authorized and directed to take legal action against any violator of this chapter. Upon complaint initiated by the commission or filed with it, the licensee or any other person charged with a violation of this chapter shall be given fifteen (15) days’ notice of the hearing upon the charges filed, together with a copy of the complaint.

The applicant or licensee or other violator shall have an opportunity to be heard in person or by counsel, to offer testimony, and to examine witnesses appearing in connection with the complaint.

Hearings shall be held at the offices of the Mississippi Real Estate Commission, or at the commission’s sole discretion, at a place determined by the commission.

At such hearings, all witnesses shall be sworn, and stenographic notes of the proceedings shall be taken and filed as a part of the record in the case.

Any party to the proceedings shall be furnished with a copy of such stenographic notes upon payment to the commission of such fees as it shall prescribe, not exceeding, however, the actual cost to the commission. The commission shall render a decision on any complaint and shall immediately notify the parties to the proceedings in writing of its ruling, order or decision.

(2) In addition to the authority granted to the commission as hereinabove set forth, the commission is hereby vested with the authority to bring injunctive proceedings in any appropriate forum against any violator or violators of this chapter, and all judges or courts now having the power to grant injunctions are specifically granted the power and jurisdiction to hear and dispose of such proceedings.

(3) The commission is hereby authorized and empowered to issue subpoenas for the attendance of witnesses and the production of books and papers. The process issued by the commission shall extend to all parts of the state, and such process shall be served by any person designated by the commission for such service. The person serving such process receive such compensation as may be allowed by the commission, not to exceed the fee prescribed by law for similar services.

All witnesses who are subpoenaed and who appear in any proceedings before the commission receive the same fees and mileage as allowed by law, and all such fees shall be taxed as part of the costs in the case.

(4) Where in any proceeding before the commission any witness shall fail or refuse to attend upon subpoena issued by the commission, shall refuse to testify, or shall refuse to produce any books and papers the production of which is called for by the subpoena, the attendance of such witness and the giving of his testimony and the production of the books and papers shall be enforced by any court of competent jurisdiction of this state in the same manner as the attendance and testimony of witnesses in civil cases are enforced in the courts of this state.

(5) The commission may obtain legal counsel privately to represent it in proceedings when legal counsel is required