Missouri Real Estate Lawyer

The laws related to starting a real estate business in Missouri are straightforward. The rules of the Missouri Real Estate Commission (MREC) related to starting such a business can add confusion. Fully understanding the laws and rules is essential to starting a real estate business that complies with the requirements of the MREC.

Real Estate Licenses

The MREC is authorized to issue three types of real estate related licenses: broker, broker-salesperson, and salesperson.

Missouri defines a “real estate broker” as any person or business that performs any of the following on behalf of another person or business for compensation.

• Offers to sell, buy, exchange, or lease real estate
• Sells, buys, exchanges, or leases real estate
• Negotiates, or offers to negotiate, the sale, exchange or lease of real estate
• Lists, or offers to list, the sale, exchange or lease of real estate
• Deals in options related to real estate
• Holds himself or herself out as a licensed real estate broker
• Assists in, or directs, the procurement of prospects to buy, sell, exchange or lease real estate
• Assists or directs in negotiation intended to result in the sale, exchange or lease of real estate
• Charges an advance fee to an unlicensed person to promote real estate in a listing publication

A “real estate salesperson” is any person or business that performs any of the above activities for compensation in association with a real estate broker. A “real estate broker-salesperson” is a real estate broker that performs any of the above activities for compensation in association with another real estate broker.

However, a real estate broker-salesperson may not also operate as a real estate broker. The broker must surrender his or her broker license to the MREC before acting as a real estate broker-salesperson. Additionally, the broker must also apply for a “real estate broker-salesperson” license. The broker license may be reinstated by application.

The MREC will issue a salesperson license, or a broker-salesperson license, only to a person associated with a broker. Further, neither a salesperson nor a broker-salesperson may be associated with more than one broker.

Who Does Not Need a Real Estate License?

The above definitions do not apply to:

• The owner, lessor, or lessee of real estate, or the employees of the owner
• Attorneys
• An auctioneer employed by the owner
• Any person acting under court order or as authorized by a will, trust, or deed of trust
• A property manager employed or retained by the owner, or
• Any publication or internet site whereby the advertising of real estate is incidental to its operation

Starting a Real Estate Business: Missouri Statutes

The MREC may grant a license to the following entities.

• Corporation
• Partnership
• Limited liability company
• Professional corporation
• Association

The MREC may grant a “broker” license to one of the above entities when each owner, officer or manager participating in the entity’s brokerage business is licensed as a broker. Each salesperson of the entity must also be licensed as a salesperson. The MREC may grant a “real estate broker-salesperson” license to an above entity when each owner, officer or manager acting as a real estate broker-salesperson is licensed as such.  Additionally, each owner, officer or manager acting as a salesperson must be licensed as such. Lastly, the MREC may grant a “salesperson” license to an above entity when each owner, officer or manager acting as a salesperson is so licensed.

Starting a Real Estate Business: MREC Rules

Except for fictitious names, as described below, a broker may conduct business only under the name licensed. Each partnership, association, and corporation must obtain a separate broker license before transacting business as a broker. Additionally, each partner, associate, or officer supervising the brokerage business of such entity must be licensed as a broker. Plus, each broker-partner, broker-associate and broker-officer must hold a similar title within the entity. Also, each broker-salesperson and salesperson of the entity must be licensed as such. Lastly, the MREC may, upon application, issue a broker license to a nonresident partnership, association, or corporation licensed as a broker in another state.

An individual or entity licensed as a broker may conduct business under the name of a fictitious entity properly registered under Missouri law. The broker must provide a copy of the registration to the MREC within ten days of receiving same.

Professional Corporation

According to MREC rules, only a broker-salesperson and salesperson may be licensed as a professional corporation. The name of the professional corporation must contain the words “Professional Corporation” or “P.C.”, and the MREC must approve the name. The license of the professional corporation may be issued only in the name of the broker-salesperson or salesperson, and a professional corporation may not operate as a fictitious entity. All stock in the professional corporation may be held only by the broker-salesperson or salesperson to whom the professional corporation license was issued.

Take-Away

Starting a real estate business in Missouri can be complicated. The MREC will investigate a real estate business that is not properly formed. As such, real estate professionals must seek competent advice before starting a real estate business in Missouri.

Michael Sewell, JD, MBA has litigated more than 100 lawsuits in federal, state, administrative, and municipal courts since 2005, involving real estate, business, and personal disputes. He has also formed more than 100 LLCs and advises companies about raising private capital.

Please contact Michael Sewell for an initial consultation at no charge. (314) 942-3232 | michael@sewelllaw.net.

This article is for general informational purposes only. This information is not intended as legal advice. You should consult an attorney regarding how this information might apply to your specific circumstances.

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