Closing a Real Estate Brokerage Firm

PURPOSE: This rule informs licensees of the procedures they need to follow when closing a real estate firm. (1) Voluntary Closing. (A) A real estate brokerage shall be closed in the following manner. The individual broker or the designated broker shall— 1. Notify the commission in writing on a form prescribed by the commission of the effective date of the closing, the location where the records will be stored, and that all requirements of 20 CSR 2250-8.155(1) have been met; 2. Notify all licensees associated with the brokerage in writing of the effective date of closing. The licenses of AND INSURANCE any licensees associated with the brokerage at the time of closing must be returned to the commission with the closing statement; 3. Notify all current listing, buyer or tenant agreement, and management contract clients as well as parties and co-brokers to existing contracts, in writing, advising of the date the brokerage will close. All listing, buyer, tenant, and management clients must be advised in writing that they may enter into a new listing, buyer, tenant, or management agreement with the broker of their choice; 4. Remove all advertising signs from all properties which were listed with or managed by the brokerage. Arrange to cancel all advertising in the name of the brokerage, including office signs and telephone listing advertisements; 5. Maintain all escrow or trust accounts until all monies are transferred to a title company, an escrow company, or an attorney for closing of the transaction, or are otherwise properly disbursed as agreed to in writing by the parties having an interest in the funds; and 6. Arrange for pending contracts to be closed by a title company, a lending institution, an escrow company, or an attorney. In the case of a sale, transfer, or merger of an existing brokerage, the acquiring broker may close the pending transactions acquired from the selling broker after having first obtained the express written consent of all parties to the transactions. Notify all parties involved in pending transactions as to the name, address, and telephone number of the closing agent. (2) Revocation/Suspension. (A) Individual Broker or Corporation, Partnership, or Association. Upon the revocation or suspension of an individual broker, corporation, partnership, or association, the individual broker or designated broker shall— 1. Cease all brokerage business immediately upon the effective date of the suspension or revocation order; 2. Notify the commission of the location where records and files will be stored, as well as the name, address, and phone number of the custodian who will be storing the records and files; 3. Notify all licensees associated with the brokerage of the revocation/suspension and return all licenses held by the broker to the commission; 4. Notify all current listing, buyer or tenant agreement, and management contract clients as well as parties and co-brokers to existing contracts, in writing, advising of the date the brokerage will close. All listing, buyer, tenant, and management clients must be advised in writing that they may enter into a new listing, buyer, tenant, or management agreement with the brokerage of their choice; 5. Remove all advertising signs from all properties which were listed with or managed by the brokerage; 6. Cancel or suspend all advertising and telephone listing advertisements. In case of suspension, post a notice of the suspension period on the outside of the office in a prominent location. In case of revocation, the licensee shall remove all office signs visible to the public; 7. Maintain all escrow or trust accounts until all monies are transferred to a title company, a lending institution, an escrow company, or an attorney for closing the transaction, or are otherwise properly disbursed as agreed to in writing by the parties having an interest in the funds; 8. Arrange for pending contracts to be closed by a title company, a lending institution, an escrow company, or an attorney. Notify all parties involved in pending transactions as to the name, address, and telephone number of the closing agent. 9. Notify the commission in writing on a form prescribed by the commission of the location where the records will be stored and that all requirements of 20 CSR 2250-8.155(2) have been met. (3) Closing as a Result of Death or Disability. Upon the death or disability of an individual broker, or upon the death or disability of one (1) or more of the licensed brokerpartners, broker-officers, or broker-associates of a real estate partnership, corporation, or association in which the affairs of the partnership, corporation, or association cannot be carried on, the following procedures shall apply: (A) All licensees associated with the broker, corporation, partnership, or association must cease all brokerage activity until their licenses have been transferred to another broker; and (B) The administrator or executor of the broker’s, brokerofficer’s, broker-partner’s, or broker-associate’s estate or the legal representative thereof— 1. May, as provided in section 339.040.8, RSMo, apply for a temporary broker license for the sole purpose of concluding pending business; 2. Shall follow the procedures established in section (1) for voluntary closing; and 3. Shall notify the commission in writing on a form prescribed by the commission of the effective date of the closing, the location where the records will be stored, and that all requirements of 20 CSR 2250-8.155(3) have been met. AUTHORITY: section 339.120, RSMo Supp. 2008.* This rule originally filed as 4 CSR 250-8.155. Original rule filed June 16, 1989, effective Sept. 28, 1989. Amended: Filed Feb. 2, 1994, effective Aug. 28, 1994. Amended: Filed Dec. 1, 1997, effective Sept. 1, 1998. Amended: Filed June 28, 2002, effective Dec. 30, 2002. Moved to 20 CSR 2250-8.155, effective Aug. 28, 2006. Rescinded and readopted: Filed April 3, 2009, effective Sept. 30, 2009. *Original authority: 339.120, RSMo 1941, amended 1963, 1967, 1981, 1988, 1993, 1995, 1999, 2004, 2008.