Mo. Code Regs. tit. 20 § 2250-2.040

Current through Register Vol. 49, No. 21, November 1, 2024.

Section 20 CSR 2250-2.040 - Compensation Disputes and Compensation Paid to Unlicensed Business Entity

PURPOSE: This amendment enacts legislative changes effective August 28, 2021 that permits brokers to pay real estate compensation to unlicensed business entities registered with the Missouri Secretary of State.

PURPOSE: This rule defines the commissioner's limitations with regard to civil problems of licensees and establishes guidelines for brokers paying compensation to unlicensed business entities owned by broker-salespersons or salespersons that were formed for the purpose of receiving compensation earned by such licensee.

(1) Disputes Concerning Matters of Compensation.

(A) The commission will not enter into disputes between licensees concerning matters of commissions. The license law and these rules are designed to regulate the business conduct of licensees in the interest of the public and to discipline licensees when warranted. The commission has no authority to award money damages but, as a condition of probation, may order restitution be made to injured parties.

(2) Compensation Paid to Unlicensed Business Entity.

(A) A broker may pay real estate compensation directly to an unlicensed business entity if the entity-

1. Has a valid registration on file with the Missouri secretary of state that reflects the business entity was formed for the purpose of receiving real estate compensation earned by the licensee; and

2. Is owned solely by the licensee, or owned by the licensee and the licensee's unlicensed spouse, or owned by the licensee and the licensee's licensed spouse both of whom are affiliated with the broker/brokerage paying the compensation, or owned by the licensee and other licensees all of whom are affiliated with the broker/brokerage paying the compensation.

(B) A business entity that receives compensation from a broker as provided for in subsections 4 and 5 of section 339.150, RSMo, shall not be required to be licensed under Chapter 339, RSMo, but the business entity must be-

1. Owned by a currently licensed broker-salesperson and/or salesperson;

2. Properly registered with the Missouri secretary of state, in good standing, and authorized to conduct business in Missouri; and

3. Established for the purpose of receiving real estate compensation to which the business entity's Articles of Organization or Articles of Incorporation filed with the Missouri secretary of state must include verbiage indicating the business entity was formed for the purpose of receiving real estate compensation.

(C) The designated broker of the brokerage paying the compensation to an unlicensed business entity shall be responsible for ensuring the business entity is in compliance with 339.150, RSMo, and the corresponding regulations promulgated thereunder.

(D) Any compensation paid to an unlicensed business entity must be paid in the exact name of the entity registered with the secretary of state, or under a currently registered fictitious name of the business entity.

(E) Entities currently licensed as a Missouri real estate entity, that wish to cease being licensed, may surrender their current license(s) as delineated under rule 20 CSR 2250-8.155(1) and must ensure they meet the requirements of sections 339.100 and 339.150, RSMo, and all regulations promulgated thereunder before receiving compensation payable to the unlicensed entity from a designated broker.

20 CSR 2250-2.040

AUTHORITY: sections 339.100.3., 339.120, and 339.205, RSMo Supp. 2012.* This rule originally filed as 4 CSR 250-2.040. Original rule filed Sept. 25, 1975, effective Oct. 15, 1975. Rescinded and readopted: Filed Nov. 14, 1978, effective Feb. 11, 1979. Amended: Filed Oct. 2, 1985, effective Dec. 26, 1985. Amended: Filed Feb. 2, 1994, effective Aug. 28, 1994. Moved to 20 CSR 2250-2.040, effective Aug. 28, 2006. Amended: Filed July 26, 2012, effective Jan. 30, 2013.

Amended by Missouri Register March 1, 2022/Volume 47, Number 5, effective 4/30/2022

*Original authority: 339.100, RSMo 1941, amended 1978, 1993, 2004, 2005, 2006, 2007, 2008; 339.120, RSMo 1941, amended 1963, 1967, 1981, 1988, 1993, 1995, 1999, 2004, 2008; and 339.205, RSMo 2007.