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NCREC Statement on NAR Settlement

      News

NAR Settlement

On March 15, 2024, the National Association of Realtors® (NAR) proposed a settlement to end landmark antitrust lawsuits. In the proposal, NAR agreed to pay damages and to mandate that its members enter into written buyer-broker agreements. Additionally, the settlement would prohibit REALTORS® from making compensation offers on multiple listing services (MLS). The settlement has not been approved by the court; a decision from the court is expected later this year. Even so, the NAR rules are planned to be effective in mid-July.

As a reminder, the North Carolina Real Estate Commission (NCREC) is an independent state governmental agency and should not be confused with NAR or its local boards. The NCREC’s primary function is to license and regulate real estate brokers and its mission is to protect consumers. North Carolina has 100,000 plus real estate brokers with many, but not all, also being members of NAR. NAR is a voluntary trade organization whose members are known as REALTORS®. In North Carolina, NC REALTORS® is a state level REALTOR® association and, as part of its services, creates various standard form documents for use by its members and their clients in transactions.  In cooperation with the NC Bar Association, NC REALTORS® also creates standard form Offers to Purchase and Contract and other transaction documents.

The NCREC is following developments with the settlement proposal as they occur. However, it is important to recognize that any changes in NAR rules apply specifically to NAR members and do not alter the Real Estate License Law and Commission rules. Moreover, the currently proposed NAR changes are in no way contradictory to the existing License Law and rules.

The following is a reminder of NCREC rules relating to broker transparency, agency agreements, and commissions.

Working With Real Estate Agents Disclosure:

Commission Rule 58A. 0104(c) states: In every real estate sales transaction, a broker shall, at first substantial contact with a prospective buyer or seller, provide the buyer or seller with a copy of the publication “Working With Real Estate Agents” …(WWREA). 

In 2021, the NCREC revised the WWREA Disclosure to be one page, double-sided, with one side for sellers and one side for buyers. The new WWREA Disclosure was designed to be quicker and simpler for brokers to use and easier for buyers and sellers to understand. Additionally, the original brochure was updated and expanded to be available for use in conjunction with the required WWREA Disclosure. The WWREA Disclosure and brochure explain the various types of agency relationships in a clear concise manner, educating the consumer and defining expectations.  The WWREA Disclosure is a broker’s opportunity to discuss and clarify what their agency role may be in the transaction and to start the conversation concerning the contemplated agency status, payment, and future options.

Buyer Agency Agreements:

Commission Rule 58A .0104(a) has long required brokers to enter into written agency agreements. Listing agreements must be in writing and signed by the broker and client at the time their agency relationship is formed. Buyer agency agreements must be in writing and signed by the broker and client no later than the time of making an offer. Note that the rule does not prohibit a broker from entering into a written buyer agency agreement earlier than the time of offer submission. Accordingly, the proposed rule change for REALTORS® does not conflict with the Commission’s rule.

Additionally, NCGS § 93A-13 prohibits a broker from filing suit for recovery of brokerage compensation unless the agreement is in writing. Therefore, brokers need to be in compliance with NCREC rules in order to avoid disciplinary action and in order to recover a commission through the civil court if the client fails to pay.

The Commission does not have jurisdiction regarding the setting or advertising of commissions. Commission Rule 58A .0109(f) specifically notes that the NCREC will not act as a board of arbitration and shall not compel parties to settle disputes concerning such matters as the rate of commissions, the division of commissions, pay of brokers, and similar matters. The NCREC reminds all of its licensees that brokerage commissions remain a negotiable term between the broker/firm and client.

Finally, it is important to remember that Commission Rule 58A .0112(b)(1) bars a broker from using a preprinted offer or sales contract form containing any provision concerning the payment of a commission or compensation to a broker or firm. While a client may consider the amount of commission when considering making or accepting an offer, the broker/firm should not be made a third party in a form purchase contract between the buyer and seller. The current standard form residential contract includes a provision allowing the seller to pay an agreed amount toward any of buyer’s expenses.

The NCREC understands that the real estate industry is always evolving, and our role is to ensure whenever possible that these changes benefit consumers and to assist NC brokers in understanding their duties. The NCREC remains dedicated to fostering a market that prioritizes consumer interests, fair competition, and transparency. We also remain available to answer questions about the application of the License Law and Commission rules to help brokers and consumers better navigate their transactions.

Commission Meeting of March 13, 2024

Key reports, issues, and decisions of interest to licensees and/or the public are reported here from the most recent Commission meeting:

Commission Meeting of March 13, 2024

Pending Cases: The Commission entered into consent agreements to suspend 14 licenses, accepted the permanent voluntary surrender of 2 licenses, ordered hearings in cases involving 18 licensees, left cases pending involving 6 licensees, and closed cases without action against 5 licensees.

License Applications Involving Character Issues: License applicants who have character issues such as prior criminal convictions or disciplinary actions by another licensing board are separately considered by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews.

Total candidates considered: 18; total approved: 5; total approved with conditions: 6; continued: 5; and deferred: 2.

License Examination Results: If you are interested in reviewing the most recent statistics and pass rates regarding the North Carolina broker license examination, click here License Examination Results

Residential Property and Owners’ Association Disclosure Statement (RPOADS): The Compliance Manager reviewed the revised RPOADS, noting that it included the suggested changes requested by the Commission at the February business meeting by the Commission members. Upon a motion of Mr. Ramseur, the Commission approved the RPOADS with the following changes:

Page 1:

Page 4/Section F:

Future Legislation to Fine Licensees: The Executive Director and Director of Regulatory Affairs reviewed two spreadsheets developed by staff on the authority to fine currently held by (1) real estate authorities in other states and (2) licensing boards in North Carolina. Mr. Malarney asked the Regulatory Affairs Committee to review and report back to the full Commission. The Executive Director will work with the Director of Regulatory Affairs to schedule a Regulatory Affairs Committee meeting.

BIC Span of Control Workgroup Update: Mr. Lindsey reported that the BIC Span of Control Workgroup has met five times, starting in October of 2023. The workgroup has reviewed many issues relating to brokers-in-charge and is currently working through the ten issues raised by the BIC Span of Control focus groups. Once the Workgroup reaches conclusions on any changes it would like to see in the rules, the Workgroup will make suggestions to the full Commission; if the full Commission agrees, staff will start the rule-making process, which includes initial drafts, publication for public comment, and a period of consideration, among other things, before a final decision is made. Mr. Ramseur asked that the group look at the current role of technology and social media advertising with the current responsibilities of the BIC.

Proposed Changes to Occupational Licensing Boards’ Authority: The Director of Regulatory Affairs reported the General Statutes Commission responsible for making technical changes to the statutes is considering removing the term “moral turpitude” from the Commission’s section of the statutes, among other statutes and presented a draft of the proposed changes.

MV Realty v. NCREC: The Director of Regulatory Affairs reported that the MV Realty v. NCREC case was dismissed in the Federal Bankruptcy Court.

Examination Provider Transition Report: The Director of Education and Licensing reported that exam administration has successfully been transferred to Pearson VUE. Candidates started taking the license examination with Pearson VUE on March 1, 2024, at 68 testing centers across the state of North Carolina. The Director of Education and Licensing noted that the Real Estate Licensing in North Carolina (RELINC) publication has been updated and revamped and a new series of AI videos has been developed for those seeking a real estate license. First-time test takers since the beginning of March are performing at or better than they did with the previous examination provider.

Spring Educators Conference: The Director of Education and Licensing reported that the Spring Educators Conference is scheduled for Tuesday, March 19, 2024, at the McKimmon Center on North Carolina State University’s campus. There are 344 people registered. Over the last two years, the Spring Educators Conference has become the largest gathering of educators in the state.

Agreement with South Carolina: The Executive Director reported that South Carolina requested a written memorandum of the licensing requirements for licensees from South Carolina and that she signed an agreement outlining the requirements already required by North Carolina law and rules.  The agreement is revocable at any time.  

Report on License Numbers: As of March 1, 2024, there are 127,794 brokers and firms licensed by the Commission, as follows:

Active Full Brokers – 84,959

Active Provisional Brokers – 5,079

Brokers-in-Charge – 18,164

BIC Eligible Brokers – 6,299

Inactive Full Brokers – 25,077

Inactive Provisional Brokers – 5,079

Firms17,494

Limited Nonresident Commercial Brokers – 264

Next Commission Meeting: The next Commission meeting will be held at 9:00am, Wednesday, April 24, 2024, in the Commission’s office in Raleigh and is open to the public. It can be viewed via Zoom online video.

Commission Meeting of February 14, 2024

Key reports, issues, and decisions of interest to licensees and/or the public are reported here from the most recent Commission meeting:

Commission Meeting of February 14, 2024

Pending Cases: The Commission entered into consent agreements to suspend 20 licenses, accepted the permanent voluntary surrender of 3 licenses, approved the issuance of 1 license, revoked 1 license, ordered hearings in cases involving 9 licensees, reprimanded 2 licensees, and closed cases without action against 2 licensees.

License Applications Involving Character Issues: License applicants who have character issues such as prior criminal convictions or disciplinary actions by another licensing board are separately considered by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews.

Total candidates considered: 16; total approved: 7; total approved with conditions: 2; continued: 6; and deferred: 1.

License Examination Results: If you are interested in reviewing the most recent statistics and pass rates regarding the North Carolina broker license examination, click here: License Examination Results

Expense Authorization for Travel: The Executive Director presented a draft Expense Authorization for Travel Policy. After discussion, the Commission agreed that that Mr. Malarney and Mr. Lindsey would work with the Executive Director and the Director of Regulatory Affairs to rework the language of the policy and bring it back to the Commission at the March meeting.

Residential Property and Owners’ Association Disclosure Statement (RPOADS): The Compliance Manager discussed the revised RPOADS including feedback from the January business meeting and Commission members. The Commission also discussed making the RPOADS available on July 1, 2024, to allow the market ample time to prepare for the new form.  Mr. Malarney commended Ms. Vuotto on her work on the RPOADS.

The Commission suggested that for the next RPOADS draft:

Proposed Changes to Occupational Licensing Boards’ Authority: The Director of Regulatory Affairs reported that the General Statutes Commission is responsible for making technical changes to the statutes. The General Statues Commission is considering removing the term “moral turpitude” from the Real Estate Commission’s section of the statutes. They are working on a draft and the Director of Regulatory Affairs will share the proposed legislation when a draft is ready.

Update Instructor Seminar: The Director of Education and Licensing provided a report on the Update Instructor Seminars (UIS) for the 2023-2024 license year and reviewed the 2024-2025 UIS budget. Upon a motion from Ms. O’Connor, the Commission approved the 2024-2025 UIS budget. Ms. Mallette was not present for the dicussion or decision in this matter.

Larry A. Outlaw Excellence in Education Award Selection: Upon the motion of Ms. O’Connor, the Commission voted to meet in closed session pursuant to N.C.G.S § 143-318.11(a)(2) with the Director of Education and Licensing to select the recipient of the Larry A. Outlaw Excellence in Education Award. Upon the motion of Mr. Ramseur, the Commission voted to come out of closed session pursuant to N.C.G.S § 143-318.11(a)(2). The recipient of the Award will be announced at the March 19, 2024, Spring Educators Conference. Ms. Mallette was not present for the discussion or decision in this matter.

Examination Provider Transition Report: The Director of Education and Licensing reported that all systems are ready to transfer exam administration from PSI to Pearson VUE. Candidates can start taking the license examination with Pearson VUE on March 1, 2024, at 68 testing centers across the state of North Carolina. In preperation for the transition, eight Instructor Development Workshops were held to assist in the item-writing process. On February 7, 2024, the Education Division met with over 100 instructors to explain the entire transition process. The Director of Education and Licensing noted that the transition process also will be discussed at the March 19, 2024 Spring Educators Conference. The Director of Education and Licensing commended the Education and Examination Officer, Chief Technology Officer and Software Engineer on the amount of detailed work that went into the transition. Ms. O’Connor commended the Director of Education and Licensing and the team for making the transition process seem effortless.

Report on License Numbers: As of February 1, 2024, there are 127,088 brokers and firms licensed by the Commission, as follows:

Active Full Brokers – 78,995

Active Provisional Brokers – 5,020

Brokers-in-Charge – 18,090

BIC Eligible Brokers – 6,238

Inactive Full Brokers – 17,401

Inactive Provisional Brokers – 7,642

Firms17,350

Limited Nonresident Commercial Brokers – 259

Next Commission Meeting: The next Commission meeting will be held at 9:00am, Wednesday, March 13, 2024, at Salem College, Dale H. Gramley Library, Reading Room in Winston Salem, NC and is open to the public. It can be viewed via Zoom online video.

February Updates

      News

Due Diligence Fee Concerns

Recently there have been several questions and cases involving Due Diligence Fee concerns.  The common questions are: “When is the Due Diligence Fee due?” and “What happens if the buyer changes their mind and terminates the contract without paying the Due Diligence Fee to the seller?” It is important to note that if the buyer entered into a contract to purchase a home, the due diligence fee is due immediately upon contract formation.  If the buyer changes their mind and terminates later, the seller may be still entitled to the due diligence fee and other fees that may be awarded by the courts, such as attorney fees. The Commission’s, Questions & Answers on Due Diligence Fees is a great resource to review.

You are invited!

The monthly Real Estate Commission meetings are always open to the public, and you are invited to attend in person or online via Zoom.  The meeting next month is February 14th at the Carolina Hotel (South Room) 80 Carolina Vista Drive, Pinehurst, NC 28374.  A Zoom link will be available at ncrec.gov on the day of the meeting. If you plan to attend in person, please RSVP to exec@ncrec.gov on or before February 7, 2014.

Commission Meeting of January 17, 2024

Key reports, issues, and decisions of interest to licensees and/or the public are reported here from the most recent Commission meeting:

Commission Meeting of January 17, 2024

Pending Cases: The Commission entered into consent agreements to suspend 9 licenses, accepted the permanent voluntary surrender of 1 license, closed 4 cases without action, ordered 5 hearings in cases involving licensees, and left 5 cases pending.

License Applications Involving Character Issues: License applicants who have character issues such as prior criminal convictions or disciplinary actions by another licensing board are separately considered by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews.

Total candidates considered: 12, total approved: 1, total approved with conditions: 4, continued: 5, and deferred: 2.

License Examination Results: If you are interested in reviewing the most recent statistics and pass rates regarding the North Carolina broker license examination, click here: License Examination Results

Expense Authorization for Travel: The Commission reviewed and discussed Chairman Malarney’s memo addressing funding for conference attendance. Upon the motion of Mr. Black, the Commission directed staff to bring a proposed amendment to the Commission’s travel policy to its February business meeting.

Monthly Financial Report, Quarterly Investment, and Education & Recovery Fund Report: The Commission received and reviewed the monthly Financial Report, Quarterly Investment Report, and Education & Recovery Fund Report presented by the Chief Financial Officer for the period ending December 31, 2023. The Executive Director noted that the Accountant had updated and modernized the reports and the changes had been approved by the Finance Committee.

FY2023-2024 Income and Expense Projections: The Chief Financial Officer reviewed the adjusted FY2023-24 Income and Expense Projections, which were also approved by the Finance Committe. Mr. Lindsey noted that the projections are now more favorable and commended Commission staff.

Residential Property and Owners’ Association Disclosure Statement (RPOADS): The Compliance Manager presented the reformatted RPOADS form and asked for feedback from the members. She noted that staff was hoping to reduce the instructions to one page, increase the size of the check-circles, and eliminate more of the white spaces on the form, among other things. The members suggested adding and modifying specific language to improve readability of the form.

License Examination Provider Transition: The Director of Education and Licensing provided a report on the status of the transition between PSI to Pearson Vue for license examination services. The industry training date is February 26, 2024. He reported that the transition is on schedule and that PSI will end testing on February 28, 2024 with Pearson Vue beginning testing on March 1, 2024. The Director of Education and Licensing commended the software engineer for his dedication, expertise, and hard work in accomplishing the many technological requirements for making the transition.

2024 Educators Conference: The Director of Education and Licensing provided a report on the upcoming 2024 Educators Conference. The Educators Conference is planned for Tuesday, March 19, 2024, at the McKimmon Center at North Carolina State University and includes a theme that recognizes education providers as superheroes in their field. The Director of Education and Licensing noted that the Commission will solicit nominations from January 15 – February 2, 2024, for the Larry A. Outlaw Excellence in Education Award. The Chair appointed Ms. Mallette to the award committee along with existing Education Committee members Mr. Black and Ms. O’Connor.

January 2024 Education Town Hall: The Assistant Director of Education and Licensing provided a report regarding the January 11, 2024, Education Town Hall. She stated there were approximately 110 Instructors, Education Directors, and Education Providers in attendance. During the Education Town Hall, staff provided information about the license examination provider transition and the 2024-2025 Update course topics. Mr. Black and Ms. O’Connor noted that the Town Halls are a helpful communication tool between staff and the Education Providers.

Report on License Numbers: As of January 1, 2024, there are 126,278 brokers and firms licensed by the Commission, as follows:

Active Full Brokers 78,995

Active Provisional Brokers 5,068

Brokers-in-Charge 17,985

BIC Eligible Brokers 6,174

Inactive Full Brokers 17,357

Inactive Provisional Brokers 7,431

Firms 17,171

Limited Nonresident Commercial Brokers 256

Next Commission Meeting: The next Commission meeting will be held at 9:00am, Wednesday, February 14, 2024, at the Carolina Hotel, South Room in Pinehurst and is open to the public. It can be viewed via Zoom online video.

Commission Meeting of December 13, 2023

Key reports, issues, and decisions of interest to licensees and/or the public are reported here from the most recent Commission meeting:

Commission Meeting of December 13, 2023

Pending Cases: The Commission entered into consent agreements to suspend 13 licenses, accepted the permanent voluntary surrender of 5 licenses, accepted the voluntary surrender of 2 licenses, closed cases without action against 1 licensee, left cases pending involving 1 licensee, and ordered hearings in cases involving 6 licensees.

License Applications Involving Character Issues: License applicants who have character issues such as prior criminal convictions or disciplinary actions by another licensing board are separately considered by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews.

Total candidates considered: 11, total approved: 3, total approved with conditions: 3, continued: 3, and deferred: 2.

License Examination Results: If you are interested in reviewing the most recent statistics and pass rates regarding the North Carolina broker license examination, click here: License Examination Results

Financial Report: The Commission received and reviewed the monthly Financial Report presented by the Chief Financial Officer for the period ending November 30, 2023.

Residential Property and Owners’ Association Disclosure Statement (RPOADS): The Commission approved the Disclosure Statement language with the below revisions. The Commission then directed Staff to commence the RPOADS graphic design layout and present the draft for the Commission’s consideration. 

General and BIC Update Course Topics: The Legal Education Officer reviewed with the Commission the list of possible 2024-2025 Update Course topics recommended by the Commission members who answered the survey. The survey asked for the priority of topics from all the suggestions previously provided by the Commission members, staff, licensees, and educators. Upon the motion of Mr. Aceto, the Commission approved the topics for the 2024-2025 NCREC Update Courses, with the addition of succession plans and Fair Housing, along with some illustrative case studies. 

HBCU Outreach: The Diversity, Equity & Inclusion Officer reviewed the DEI program for calendar year 2023. The Commission members commended the DEI Officer on her work.

License Statistics: The Director of Education and Licensing reviewed the Broker License Issuance Report, noting the total broker licenses issued by month, the total broker original licenses issued, and the total broker licenses reinstated from December 2022 – November 2023. Mr. Lindsey requested that certain data become part of the Monthly Licensee Report in the Consent Agenda. Mr. Lindsey would also like to consider whether those brokers coming in to North Carolina without taking the exam require additional supervision from the BIC. Ms. O’Connor noted that every provisional broker requires unique supervision depending on the broker. Mr. Black asked that the rulemaking list for future consideration include a review of Rule 58A .0511 – Licensing of Persons Licensed in Another Jurisdiction. Mr. Lindsey commended the Director of Education and Licensing on the license statistics report.

Report on License Numbers: As of December 1, 2023, there are 125,394 brokers and firms licensed by the Commission, as follows:

Active Full Brokers 78,668

Active Provisional Brokers 5,207

Brokers-in-Charge 17,948

BIC Eligible Brokers 6,129

Inactive Full Brokers 17,116

Inactive Provisional Brokers 7,109

Firms 17,044

Limited Nonresident Commercial Brokers 250

Next Commission Meeting: The next Commission meeting will be held at 9:00am, Wednesday, January 17, 2024, in the Commission’s office in Raleigh and is open to the public. It can be viewed via Zoom online video.

December Updates #2

      News

Technology and NCREC

Technology is ever evolving, and new tools are being used to assist with the ongoing demand for information. NCREC has been exploring the use of AI and has found it useful for idea generation and content creation.  While it is a useful tool and a time-saver, be aware that careful and thorough review of any created content is necessary to ensure accuracy.

Vacation Rental Fraud – Spring Break Scams

Each year, as Spring Break approaches, we see an increase in vacation rental property owners who are the victims of fraudulent activity. For instance, if a consumer books a vacation rental property for an underage child (typically, a teenager and their friends) for Spring Break, and allows the child to use the unit unsupervised, it could be considered fraud. Parents, relatives or others who may be tempted to gift their teenagers a beach vacation should be aware that intentionally renting a property for unsupervised use by an underage child is a violation of most rental agreements. Consequences that could follow include the property owners and management companies calling the police and/or terminating the vacation rental tenancy without refunding any monies or deposits to the tenant.

Participation in fraudulent activity can be a crime. The article, “Vacation Rental Fraud Scam Alert” provides examples on other vacation rental fraud scenarios and how to avoid them.

You are invited!

The monthly Real Estate Commission meetings are always open to the public, and you are invited to attend in person or online via Zoom.  The meeting next month is January 17th here at the Commission building.  A Zoom link will be available at ncrec.gov on the day of the meeting.

Vacation Rental Fraud Scam Alert

By Tiffany Ross- Consumer Resource Officer

            Over the past year, the North Carolina Real Estate Commission has released several detailed scam alert articles, including Fake Seller / Fake Buyer Scam Alert, Notary Fraud / Deed Fraud Alert, Be Aware of Scam Sellers, and Rental Fraud Scam Alerts. In addition to these, NCREC, in conjunction with the North Carolina State Bar and Investors Title, hosted several Wire Fraud Conferences across the state. Vacation Rental Fraud is the latest scam that we want to educate consumers about.

Vacation Rental Scams

            Many vacation rental scammers use reputable vacation rental websites to advertise, so the scams are harder to spot. These scams affect both the vacation rental tenant, and the property owners, as bad actors will pose as either to run their scheme.  For those looking to rent a vacation property, there may be a fake listing where someone asks you to send money in advance as a deposit or full advance payment.  Additionally, scammers may hack the email accounts of actual property owners or managers and then contact legitimate travelers and request payments to be made providing different instructions from previous deposits paid. Beware of sending any funds without verifying the receiver is legitimate.

For owners looking to rent out their vacation property, there are several scams to be aware of, including fake guests that will send a fraudulent check for more than the rental rate, and then ask for a refund of the difference.  Real guests sometimes will stay and damage the property or plant insects in the property and claim it was damaged on arrival or infested.  Another example is parents knowingly renting  properties for their underage children for spring break without an adult being physically present to supervise and prevent damage to the property or underage consumption of alcohol.  Being aware of these scams and not falling for these tactics can prevent the loss of hundreds or even thousands of dollars.

Action You Can Take:

  1. Never send money to someone online or electronically without verifying it is going to a legitimate place.  Do your research and independently contact and verify that the person or firm who will be holding any money is a real attorney, licensed real estate broker, or the true property owner.
  2. Be skeptical of anyone asking for money upfront before completing any paperwork or written or online agreement concerning the rental.  Make sure that you are communicating with the actual property owner or a licensed real estate broker.  Look up the property owner in public records for the county (typically through the tax department) and make sure to verify the identity of the person and their contact information.  To verify someone is a licensed real estate broker in NC, search the licensee look up page.   From this page, verify that their email and other contact information matches the advertisement.
  3. If you are scheduling your vacation rental through a well-known or reputable platform, don’t leave the main app or platform.  Any protection offered to users of the platform ends when communication or payments are made by any other means than the platform itself. 
  4. Search legitimate websites, or actual licensed real estate broker property management company websites for true vacation rental listings by licensed real estate professionals.
  5. Be especially cautious if you are asked to pay with wire transfers, mobile payment apps, crypto or similar methods.  If possible, use a credit card to make payments preferably with zero fraud liability for an added layer of protection.
  6. If you are an owner/property manager, change the access codes and/or WiFi passwords to the property after each guest.  Adjust your policies to be clear about who is required to be present during the rental term and any action that will be taken if unauthorized guests are found or if underage guests are left unsupervised.
  7. Don’t fall for urgent requests or offers that are too good to be true.  Decline offers that seem suspicious.  Look for the Red Flags listed below and beware of these tactics.

Red Flags That You May Be Dealing With a Fake Owner/Manager Scammer

  1. You can’t talk to an actual person, or they don’t want to answer your questions about the property or area/local attractions.
  2. The listing has typos or poor grammar.
  3. The price is too good to be true.
  4. Reviews and ratings are short or non-existent.
  5. They ask for rent, a security deposit, or other up-front money before signing a lease or agreement.
  6. There is no screening process or any attempt to verify identity of tenant.

What To Do If You Are Already a Victim Of a Vacation Rental Fraud Scam in NC

            If you responded to a fake ad and sent money, but never heard from the scammer again, contact the North Carolina Attorney General’s office to notify them of the scam and provide as much information as you can.  If the property is located outside North Carolina, contact the Attorney General’s office for that particular state.  You should also report the incident to the service or website you were using, and/or the actual owner/property manager if you were a tenant victim, as well as the Federal Trade Commission.  You can also contact local law enforcement (sheriff or police) and submit an internet crime complaint to the FBI to report the scam and see if there is any chance of recovery.

How You Can Protect Yourself or Your Clients

            If you work in vacation rental property management and have clients who rent their vacation properties to tenants, educate them on these dangers and assist them by enhancing your screening processes of potential vacation rental tenants.  If you are working with a vacation rental tenant, provide information like this article to help them avoid the scams and traps, and assist them with carefully verifying the vacation rental details.  Stay in contact with them, and make sure they are aware of the NC Vacation Rental Act. If you are considering a vacation rental, be sure to verify that the rental is legitimate and watch out for the red flags above to protect yourself in the process.

If you or your clients have a problem with a vacation rental, and a licensed real estate broker is involved, contact the Commission’s Regulatory Affairs Division at (919) 719-9180. If there are concerns about the actions of an unlicensed property owner managing their own property, or other unlicensed property management activity, contact this office and the Attorney General’s office (877) 566-7226.

December Updates

      News

Newest Instructor Development Workshop Released

Last month, NCREC released our latest Instructor Development Workshop (IDW) for approved instructors to learn more about how to write exam items that accurately test student knowledge.  Writing Effective Exams is now available on the Commission’s education website learn.ncrec.gov.

Warning to Brokers and Consumers to Beware of Unlicensed Activity in NC

NCREC would like the public to be aware of types of unlicensed activity taking place in North Carolina that could result in legal action and possibly criminal charges.  In NC, it is illegal to manage properties that belong to others for compensation without a license.  Paying ‘referral’ or ‘finders’ fees to people who do not have a real estate license is also illegal in NC.  Another common category of unlicensed activity includes brokerage services provided by inactive or expired brokers.  For more details on types of unlicensed activity to watch out for and possible legal actions, read this month’s eBulletin article: Brokers & Consumers Should Beware of Unlicensed Activity in North Carolina.

You are invited!

The monthly Real Estate Commission meetings are always open to the public, and you are invited to attend in person or online via Zoom.  The meeting next week is December 13th here at the Commission building.  A Zoom link will be available at ncrec.gov on the day of the meeting.

Commission Meeting of November 8, 2023

Key reports, issues, and decisions of interest to licensees and/or the public are reported here from the most recent Commission meeting:

Commission Meeting of November 8, 2023

Pending Cases: The Commission entered into consent agreements to suspend 14 licenses, accepted the permanent voluntary surrender of 4 licenses, accepted the voluntary surrender of 1 license, seek 1 injunctive relief, denied the issuance of 1 license, continued consideration of 3 licensees, reprimanded 2 licensees, closed cases without action against 6 licensees, left cases pending involving 5 licensees, and ordered hearings in cases involving 13 licensees.

License Applications Involving Character Issues: License applicants who have character issues such as prior criminal convictions or disciplinary actions by another licensing board are separately considered by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews.

Total candidates considered: 12, total approved: 4, total approved with conditions: 2, continued: 4, and deferred: 2.

License Examination Results: If you are interested in reviewing the most recent statistics and pass rates regarding the North Carolina broker license examination, click here: License Examination Results

Financial Report: The Commission received and reviewed the monthly Financial Report presented by the Chief Financial Officer for the period ending October 31, 2023.

Legislative Report: The Director of Regulatory Affairs reviewed the Legislative Report, summarizing bills that are currently pending in the General Assembly that relate to real estate brokerage, occupational licensing, or other matters of interest to the Commission. S761, Additional General Assembly Appointment, passed into law extending Mr. Ramseur’s term from June 30, 2026, to July 31, 2026.

Donovan v. Excel Property Management, et al.; 23-CVS-001591: The Special Deputy Attorney General for the North Carolina Department of Justice provided a report on the case Donovan v. Excel Property Management, et al.; 23-CVS-001591 noting that they appeared in New Hanover Superior Court on Tuesday, November 7, on behalf of the Commission and the judge dismissed the case against the Commission as well as the other two named defendants.

Residential Property and Owners’ Association Disclosure Statement (RPOADS): The Executive Director provided an overview of the rulemaking process relating to the RPOADS rule, 21 NCAC 58A .0114, and presented a revised version of the Disclosure Statement for the Commission’s consideration. Upon the motion of Ms. O’Connor, the Commission voted to continue the RPOADS discussion to the December meeting.

General and BIC Update Course Topics: The Legal Education Officer reviewed a preliminary list of possible 2024-2025 Update Course topics based upon suggestions provided by Commission members, staff, licensees, and educators. Mr. Bullard, Mr. Aceto, and Ms. O’Connor commended the Director of Education & Licensing, the Legal Education Officer, and the Education Division on the amount of work that went into the 2023-2024 Update courses to make them both engaging and enjoyable for brokers and instructors. Mr. Black requested that unlicensed activity be added to the list of possible topics for the 2024-2025 Update Courses. The Legal Education Officer will send a survey to the members to rank their preferred topics for inclusion in next year’s Update Courses. Mr. Lindsey requested that competency in specialty practice areas, licensee conduct, agency formation, how to read disciplinary actions, and how to communicate with the Commission also be added to the list of topics for the GenUp, and to the BICUP, provisional broker/BIC supervision.  Mr. Lindsey commended the Director of Education & Licensing and the Legal Education Officer on their recent presentation to BICs in Charlotte noting that it was extremely well received and attended. Mr. Bullard inquired whether the Commission should be prepared to address the issue of agency compensation in light of the recent litigation against the National Association of REALTORS®. The Executive Director stated that North Carolina is in a better position than many other states because of its existing rule requiring agency disclosure, including written buyer agency agreements. Staff will monitor the litigation and report to the Commission if changes and/or education is needed. The Legal Education Officer noted that Law and Rules and Licensing and Education are standing topics each year, and that an approved instructor requested that current complaints/FAQs be a third standing topic as well. Standing topics will limit available time in the four-hour courses for other topics. Mr. Black asked the Legal Education Officer to let the members know of overlapping topics to help them with ranking their preferences.

Spring Educators Conference: The Director of Education & Licensing provided a preliminary budget for the Spring Educators Conference scheduled for March 19, 2024, at the McKimmon Center at North Carolina State University. The budget for the conference previously approved by the Commission was $25,000. The Director of Education & Licensing proposed a registration fee of $49.00. Upon the motion from Mr. Lindsey, the Commission accepted the proposed budget for the Spring Educators Conference with a registration fee of $49.00. 

License Examination Transition and Item Writing Workshops: The Director of Education & Licensing reported that staff in both Education and Licensing and IT are working to make a smooth transition for license examination services from PSI to Pearson Vue in February. One significant change will be 60 state examination questions instead of 40. A number of Item Writing Workshops have been scheduled with instructors to generate test questions. Sixty-four instructors are involved in the eight Item Writing Workshops. Each day, questions are drafted for a different section of the exam. There has been great collaboration with the instructors and the Director commended the Education and Examination Officer on their work on the Item Writing Workshops.

November Education Town Hall: The Director of Education & Licensing reported that 60 instructors attended the November 6 Education Town Hall. Great feedback was received on the Item Writing Workshops. The educators also discussed topics such as forms training and mediation training. All of the Town Halls for 2024 are scheduled from 3:00 – 4:30 p.m. via Zoom and will take place on January 11, April 9, July 23, and October 8. Ms. O’Connor commended the Director of Education & Licensing and the Legal Education Officer on the response and interaction they had with the instructors and education providers.

Report on License Numbers: As of November 1, 2023, there are 124,563 brokers and firms licensed by the Commission, as follows:

Active Brokers 83,474

Active Provisional Brokers 5,266

Brokers-in-Charge 17,885

BIC Eligible Brokers 6,081

Inactive Full Brokers 23,907

Inactive Provisional Brokers 6,851

Firms 16,942

Limited Nonresident Commercial Brokers 240

Next Commission Meeting: The next Commission meeting will be held at 9:00am, Wednesday, December 13, 2023, in the Commission’s office in Raleigh and is open to the public. It can be viewed via Zoom online video.