South Carolina Broker Law: The State Portion

What the South Carolina portion actually is

The South Carolina Real Estate Broker License Examination is administered by PSI in two halves that are scored separately. The national portion is 75 items scored to 80 points — some national items are worth up to two points — with 120 minutes allowed. The South Carolina portion is 50 items worth 50 points, with 80 minutes allowed. Together: 125 items, 130 points, about 200 minutes. These figures come from PSI candidate bulletin 440 as recorded on 27 August 2026; verify the current bulletin before you schedule.

Here is the number that separates this book from most of the competition. South Carolina publishes its passing standard as points correct, not as a percentage: 60 of 80 on the national portion and 36 of 50 on the state portion. Material that tells you "you need 70 percent" is converting a published figure into an unpublished one, and on the national side that conversion is not even arithmetic you can do — 75 items scored onto an 80-point scale means item counts and point counts are different things. Study to the two numbers the state prints, and clear both halves; a strong national score does not carry a weak state score.

Your regulator is the South Carolina Real Estate Commission, which Section 40-57-10 creates under the administration of the Department of Labor, Licensing and Regulation. Its authority sits in Title 40, Chapter 57.

Two things about the outline you deserve to be told

South Carolina's outline names its areas but does not break them down. For Virginia, Texas, Ohio and Louisiana the same vendor prints a lettered subtopic list under each area, so a candidate can see which statutes sit inside which block. The South Carolina outline as recorded carries no lettered subtopic list for any of the five areas. You are told what each area weighs and nothing about what is in it. Everything you are about to read inside each area is therefore reconstructed from Title 40, Chapter 57, the Commission's regulations, and the related titles those provisions point to — not copied from a vendor sublist, because there is no vendor sublist to copy.

The recorded outline line for area II is incomplete. Four areas are recorded with both figures — area I as "Associate-9 items, Broker-10 items", area III as "Associate-11 items, Broker-13 items", area IV as "Associate-6 items, Broker-7 items", area V as "Associate-3 items, Broker-4 items". The line for area II was captured with an ellipsis: "II. Statutes Governing the Activities of Licensees and ... items)". The associate/broker split inside that one line was not fully transcribed. The broker count of 16 is recorded, it is what the other four counts require against a 50-item exam (10 + 16 + 13 + 7 + 4 = 50), and it is what the weighting of this chapter uses. If you are sitting the associate exam rather than the broker exam, do not assume the associate figure for area II from anything printed here.

Area II is the largest single block on the South Carolina state exam — nearly a third of it — and this chapter is sized accordingly.

I. South Carolina Real Estate Commission and Licensing Requirements — 10 of 50 items

Who regulates, and what the regulator will not do. Section 40-57-10 places the Commission under the Department of Labor, Licensing and Regulation, and Section 40-57-60 gives it power to set the qualifications for licensure and for education providers, hold disciplinary hearings, promulgate regulations and set the fee schedule. Section 40-57-20 makes it unlawful to act as a broker, associate or property manager without an active, valid license. The power that catches candidates is the one the Commission does not have: Section 40-57-60(B) expressly bars it from resolving disputes between licensees over the division of a commission. A broker-in-charge shorted on a co-op split has a contract claim, an arbitration route through a trade association, or a lawsuit — and no complaint to file. The trap is the intuition that a licensing board settles licensees' money quarrels; it polices conduct.

The ladder, in the current vocabulary. The classifications run associate, broker and broker-in-charge, with a parallel property manager track: Section 40-57-30(29) defines a property manager as a supervised licensee who meets the educational requirements and passes the property manager examination in order to manage rental real estate for compensation, and Section 40-57-510 adds the property manager-in-charge above that. Section 40-57-30(7) defines the broker-in-charge as the sole broker designated by the Commission to have responsibility over the actions of all supervised licensees; Section 40-57-135(A)(7) makes that same person answerable for an active trust account whenever the firm holds other people's money. Section 40-57-110(A) forbids holding two classifications at once — a rule the national supervision chapter cannot teach you, because nationally "broker" and "managing broker" are descriptive labels rather than statutory classifications with a bar on stacking.

Getting the license. Section 40-57-320(A)(2)(a) sets the education-and-experience route: sixty hours of Commission-approved classroom instruction, which must include the thirty-hour Unit III A Broker Management and thirty-hour Unit III B Brokerage Principles courses, plus five years of active associate licensure within the past seven years. Both halves of that figure are tested. An applicant holding a juris doctor, a bachelor of law, or a real estate baccalaureate or master's degree may qualify instead under subitem (b), without the experience showing at all. The trap is importing another state's "two years within five". (Hours and unit names can drift as the Commission amends its regulations — verify current before you enroll.)

Keeping it. Renewal is biennial with ten hours of continuing education, four in mandated topics (Section 40-57-340); inactive status suspends the continuing education duty under Section 40-57-340(B)(1)(b) but renews nothing. A license not renewed by its expiration date lapses (Section 40-57-110(D)), and Section 40-57-110(E) cancels it if it is not reinstated by the last day of the twenty-fourth month following expiration; practicing during the lapse may be sanctioned as unlicensed practice. Do not confuse that clock with the three-year bar on reapplying after revocation in Section 40-57-730(A), or with the six months Section 40-57-135(C)(4) allows a supervised licensee to act as broker-in-charge after the death or medical incapacity of the previous one. Work the calendar: a broker whose license expired on 30 June 2026 is lapsed from 1 July, may still reinstate through 30 June 2028, and on 1 July 2028 holds nothing to reinstate — the whole qualifying path starts again.

Who is outside the chapter, and who trains you. Section 40-57-240 puts the chapter aside for an unlicensed owner dealing in an interest identical to his own (Section 40-57-240(1)), an attorney acting within the legal representation of a client-owner, government agencies and their employees, registered foresters where a land sale is incidental to timber, and court-appointed receivers and trustees. The exemption is about dealing with your own property — a partner selling the identical interest he holds is outside the chapter, while an unlicensed person who markets a neighbor's house for a share of the proceeds is the paradigm case the chapter reaches, not an exception to it. Section 40-57-30(44) says advertising real estate owned by another with the expectation of compensation falls under the definition of "broker" and requires licensure, so the line is drawn by whose property and whose interest, never by how informal the arrangement looked. For schools, Section 40-57-920(A) requires providers and instructors to apply on prescribed forms with the fee, and approval "must be attained prior to commencement of instruction"; Section 40-57-920(B) separately lets the Commission deny, reprimand, fine, suspend or revoke an approval, a power that operates on top of prior approval rather than in place of it.

II. Statutes Governing the Activities of Licensees and Non-Licensees — 16 of 50 items

The largest block on the exam, and the operational heart of the license law. It lives mainly in four sections: 40-57-135 (supervision, records, advertising, offers, management agreements, unlicensed assistants), 40-57-136 (trust accounts), 40-57-725 (citations) and 40-57-820 (artificial intelligence).

Supervision, records and advertising

Section 40-57-135(A) lists eight duties of the broker-in-charge: supervise supervised licensees; review and approve the firm's forms; keep regular contact with them; be available to the public; maintain a written office policy; ensure every supervised licensee holds an active license; control an active trust account when holding others' funds; and notify the Commission by mail within ten days of any change of office name, address, email address or telephone number. Ten days, by mail, at the office level. The competing figure is thirty days — Section 40-57-310(3) gives a licensee thirty days to update personal contact information — and the distinction between the personal clock and the office clock is what the item is built on. Section 40-57-135(A)(3) also obliges the broker-in-charge to keep supervised licensees from violating the Vacation Time Sharing Plans Act — a supervision duty pointing out of Chapter 57 and into Title 27.

Section 40-57-135(D)(1) requires the broker-in-charge or property manager-in-charge, for a minimum of five years, to maintain and furnish on request a written copy of each lease, contract of sale and addenda, listing contract or buyer agency agreement, transaction broker agreement, option contract, property management agreement and residential property disclosure form; Section 40-57-136(F)(1) sets the same floor for trust records, and Section 40-57-135(D)(2) permits electronic storage with an off-site backup. A firm closes a $340,000 sale in March; a disclosure complaint arrives two and a half years later, and the listing contract, every addendum and the disclosure form must all still be producible. The traps are the seven-year tax habit, the three-year guess, and worst, "until it closes."

Since 15 May 2025, Section 40-57-135(E)(2)(a) requires a licensee advertising real estate services or marketing another person's property in any medium clearly to identify the full name of the brokerage firm with which the licensee is employed and supervised; the date comes from the editor's note to 2024 Act No. 204, which set the subsection running twelve months after ratification. Subitem (b) allows the requirement to be met on electronic media by a link to the brokerage's or property management company's homepage, and Section 40-57-135(E)(3) requires a firm trading under a franchise name to reveal the franchisee's identity. In practice, social posts, sign riders and portal profiles must all carry the firm name or that link; the team-brand-only post is now a violation.

Offers, agreements and unlicensed assistants

Offers and counteroffers must be in writing, dated and signed, promptly presented, with changes initialed (Section 40-57-135(I)(4)), and Section 40-57-135(I)(2) requires a listing agreement in writing with specific beginning and ending dates and all parties' signatures. Section 40-57-135(I)(5): if an offer is rejected without a counteroffer, a Commission-promulgated offer rejection form, signed by the licensee affirming presentation, must reach the offeror within forty-eight hours — whether the licensee is the buyer's agent, the seller's agent, or a transaction broker for neither. The form affirms presentation; it does not report the seller's reasons.

Section 40-57-135(I)(9) makes an agreement about residential real estate lasting more than a year unenforceable and "considered to be done in bad faith" if it purports to run with the land or bind future owners or heirs, to allow assignment of the right to provide service without notice to and consent of the owner, or to create a lien, encumbrance or other security interest or be recorded. Section 40-57-135(I)(10) then carves out home warranties on a major housing system, options and rights of first refusal, maintenance agreements entered into by a homeowners association, insurance contracts and mortgage commitments, among others. Section 40-57-135(J)(4) permits an automatic renewal clause in a management agreement only if either party may cancel for any cause or no cause on thirty days' notice after the original definite expiration date.

Section 40-57-135(K) lists ten things an unlicensed assistant may not do: discuss, negotiate or explain a contract, listing, buyer agency agreement or lease (item 1); vary the rental price or terms set by the owner or licensee (2); approve applications or leases or settle lease terms (3); conduct or host an open house or manage an on-site sales or leasing office (5); and show real property for sale other than vacant units in a multifamily building (6) — that carve-out is the one showing an unlicensed person may lawfully do.

Trust accounts

Section 40-57-136(A)(1) requires a demand deposit account designated and titled to include the word "trust" or the word "escrow" at an insured South Carolina institution; (B)(3) forbids commingling beyond a clearly identified amount for bank charges. Three clocks run, keyed to three different events:

Saturdays, Sundays and bank holidays are excluded from every forty-eight-hour deposit clock; the handover clock is different in kind — "the following business day," not forty-eight hours. The classic item swaps the two deposit triggers and catches anyone who memorized "forty-eight hours" without memorizing what it runs from. Section 40-57-136(F)(2)(f) then requires a monthly reconciliation of each account except where no deposit or disbursement was made that month, including a written worksheet comparing the reconciled bank balance with the journal balance and with the ledger total. Three figures, one worksheet, every month; an outside audit is good practice that no provision requires. Security deposits are trust funds too: Section 40-57-136(C)(2) keeps them in the account until the tenancy expires or terminates, then requires disbursement per the contract and a full accounting to landlord or tenant, and treating one as commission is conversion — Section 40-57-30(12) calls it a breach of trust and a crime.

Where entitlement is disputed and the contract does not resolve it, Section 40-57-136(E) holds the deposit until one of exactly four routes resolves it: a written agreement directing disposition, signed by all claimants and separate from the contract that put the money in trust; an interpleader action; a court order; or voluntary mediation. The broker choosing a winner is the one thing the subsection forecloses, and Section 40-57-136(B)(5) treats disbursing contrary to the contract as a demonstration of incompetence to act as broker-in-charge. A buyer walks on a $12,000 deposit and both sides demand it: hold, do not adjudicate.

Wholesaling, citations and artificial intelligence

Wholesaling is prohibited. Section 40-57-30(44) defines it as having a contractual interest in purchasing residential real estate from an owner, then marketing the property for sale to a different buyer before taking legal ownership; Sections 40-57-350(A) and 40-57-350(L)(5) bar a firm and its subagents from engaging in, representing others in, or assisting others in the practice. The tested carve-out: the definition expressly does not reach assigning or offering to assign the contractual right to purchase, and Section 40-57-135(E)(1) makes that operational — marketing a contractual position to acquire property, without implying or purporting to sell the underlying real property, is permissible.

Citations reach unlicensed people. Section 40-57-725(A) lets the department assess penalties against any individual or entity, including unlicensed individuals, and Section 40-57-725(C) sets a ladder: not more than $500 for a first violation of a particular provision, $1,000 for a second violation of the same or substantially similar provision within five years, and $10,000 for a third or subsequent one in a five-year period. Subsection (D): ten days from receipt to appeal, thirty days to pay once final. (Caps are amendable — verify current.)

Artificial intelligence carries no discount. Section 40-57-820 makes a licensee responsible for all work product produced by him or with the assistance of artificial intelligence, machine learning or similar programs, and treats a violation committed through such programs as if committed directly by the licensee. A generated listing description that overstates square footage is the licensee's misstatement, not the vendor's and not the listing service's.