SC Administrative Law Court Decisions

On May 5, 2008, this Court issued an order in the above-captioned matter affirming in part and reversing in part an order of the South Carolina Real Estate Commission (Commission) suspending the real estate license of Appellant Larry A. Yates (Yates) for six months and imposing additional discipline. Yates has filed a motion seeking this court’s reconsideration of its ruling affirming Conclusion of Law # 3 in the Commission’s order.

Yates argues that he was not required to enter into a written agency agreement with the buyers of the property in question because the buyers were merely his customers rather than clients. See S.C. Code Ann. § 40-57-30(5) & (7) (2001) (defining the terms “client” and “customer”). Yates asserts that he did not have proper notice that he was being charged with representing himself as the buyers’ agent and that the record contains no evidence to support that allegation. I disagree.

Section III of the Notice of Charges states in pertinent part:

Respondent has violated S.C. Code of Laws Sections 40-1-110 (a) (d) (f), (g), (k) and (l) and 40-57-135 (D) (4), 40-57-137(H) (2) (c), 40-57-139(C) and (E), 40-57-145(A) (4) and (13) (Supp. 2005) in that:

. . . Respondent did not execute a written agency agreement with either the buyers or the seller of [the property in question].

This language placed Yates on notice that he would be required to show the true nature of his relationship with the buyers and the seller. Further, Yates was on notice of what the law required of him at the time that he facilitated the buyers’ execution of the contract of sale with the seller. (Record, pp. 136-140). Notably, in the cover letter transmitting the contract of sale to the seller’s agents, Yates referred to the buyers as his clients. At that time, he was on notice that S.C. Code Ann. § 40-57-30(5) (2001) defines a “client” as a person with whom a licensee has established an agency relationship. Other testimony in the record similarly shows that Yates considered himself as the buyers’ agent and that he admitted that he represented them in the real estate transaction in question. Therefore, to the extent that Yates now argues that he represented the seller in the real estate transaction, I find such argument unavailing. In fact, the assertion of such an argument in the face of facts suggesting otherwise is the very reason that Yates was cited for violating the provisions of Title 40, Chapter 57.

This court is not suggesting that Yates had the intent to deceive any of the parties to the transaction or any of the officials involved in this case. However, the inconsistency in the positions he has taken about the nature of his relationship with the buyers highlights the need for the language in S.C. Code Ann. § 40-57-139(E) (Supp. 2007) that requires a licensee to represent either the buyer or the seller in an agency capacity before ratification of the real property sales agreement. If a licensee continues to be involved in a real estate transaction by the time the contract of sale is ratified, he must commit to an agency relationship and clearly communicate his role to all involved.

ORDER

For the reasons set forth above, IT IS HEREBY ORDERED that Appellant’s Motion to Reconsider is DENIED.

AND IT IS SO ORDERED.

______________________________

June ____, 2008 JOHN D. GEATHERS

Columbia, South Carolina Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731