Mississippi Tethers Real Estate Agents to Outdated Rule

People took sides over the COVID-19 lockdowns, but the pandemic proved one thing for certain: Workers can thrive without regular, in-person supervision. Yet, the Mississippi Real Estate Commission has failed to keep up.

Despite overwhelming evidence from nearly every industry, the government commission clings to an old, unwritten policy that requires real estate agents to live within roughly a one-hour drive—about 50 miles—of their supervising broker. The goal is to promote face-to-face interaction, a holdover from a bygone era of cubicles and desks for every employee.

The requirement is not a formal rule, and its legal basis is murky. Mississippi law requires real estate agents to work under the supervision of a broker, but the statutes say nothing about working within a certain distance.

The restriction was invented by unelected bureaucrats based on a published rule that only requires brokers to supervise their licensees. Tellingly, the commission refers to the one-hour-drive requirement as a "custom and practice," and leaves agents to infer the restriction from questions on government forms. If they miss the subtle messaging, they find out when regulators reject their applications.

The 50-mile radius rule for broker supervision "isn't found anywhere in state statute or in [the commission's] Administrative Rules," the Mississippi Association of Realtors explains in a letter to the commission. "The application is written upon the assumption that this 'rule' is in place, when there is no evidence available to the licensees or the public that this 'rule' has been adopted."

The Institute for Justice, our public-interest law firm, dug deeper with a public records request. We found emails, applications, and other correspondence showing widespread confusion and uneven enforcement.

One Atlanta-based agent with a supervising broker nearly 400 miles away in Memphis received a nonresident salesperson license to operate in Mississippi because she claimed to travel to the Memphis area a few times per year to see family. But a Memphis-based applicant got denied because his supervising broker was 200 miles away in Richland, Mississippi.

The commission did not care that this applicant already had an established relationship with the Richland broker, who planned to use Zoom to supervise him effectively. Nor did the commission care that the applicant would travel to see his broker when necessary.

This interference violates the Mississippi Constitution, something more fundamental than a custom and practice. Since 1949, the Supreme Court of Mississippi has held that the "right to follow any of the common occupations of life is an inalienable right."

People must be free to earn an honest living in their chosen occupation without arbitrary or unreasonable restrictions. They must also be free to relocate, which the Supreme Court of Mississippi affirmed in 1990. The one-hour rule tethers real estate agents or forces them to sever relationships with brokers they know and trust when they move over 50 miles away.

In a March 28 letter to the commission, the Institute for Justice called for an end to the one-hour-drive rule. 

How the commission responds has implications for professionals in many industries. About one-fourth of all U.S. jobs require an occupational license, and government boards often multiply rules or twist definitions to expand their authority without good reasons.

Many times, licensing boards are just slow to recognize advancing technology.

Pennsylvania tried to require vacation property manager Sally Ladd to get a real estate license to help people use Airbnb. As part of the application process, regulators demanded proof of a brick-and-mortar office inside Pennsylvania.

This might have made sense prior to the advent of the internet. But people today work differently. They can log on to digital platforms from anywhere, and they can cover 50 miles or 5,000 miles in an instant—less time than it takes traditional colleagues to walk to the watercooler.

Tearing down pointless boundaries is the point. Mississippi should keep pace and reconsider its outdated requirement.

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