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Commission Meeting of November 17, 2021

Pending Cases: The Commission entered into consent agreements to suspend 5 licenses, closed its case without action against 13 licensees, reprimanded 8 licensees, left 3 cases pending, and ordered hearings in cases involving 11 licensees.

License Applications Involving Character Issues: License applicants who have character issues such as prior criminal convictions or disciplinary action 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: 21; total approved: 17.

License Examination Results: A summary of key data relating to persons taking the exam for the first time is provided below:


Individuals Tested for the First Time

Took prelicense course

Hold license from another state


October 2021

November 2020

through October 2021


October 2021

November 2020

through October 2021

# Tested

531

9795

27

270

% Pass both sections

40%

36%

N/A

N/A

% Pass National section

74%

67%

N/A

N/A

% Pass State section

41%

38%

33%

30%

Legislative Report: The Commission reviewed the Legislative Report, noting 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. Staff noted that the Governor is about to receive a budget bill that he plans to sign which likely will conclude this session of the General Assembly.

Draft Rule Text: The Commission reviewed proposed amendments to Commission rules. Staff indicated that rule text would need to be adopted by the Commission by December 15 in order to publish any proposed rule changes for public comment in time for a July 1, 2022 effective date. The Commission approved the draft text of 21 NCAC 58A .1712 and 21 NCAC Subchapter 58B – Timeshares, as presented, for publication in the North Carolina Register. As to 21 NCAC 58A .0106, following discussion, the Commission directed staff to meet with the Regulatory Affairs Committee to further consider and refine the draft rule revisions.

Education Related Rulemaking: Staff reviewed a Memo Regarding Proposals for Rule Changes in Subchapter H. Staff advised the Commission that the total number of instructors as of the end of the first quarter who are at risk of losing certification is 18, down from 51 at the end of the license year (or 64 including the 13 who lost their approval after two years of teaching without meeting the 40% pass-rate threshold). Staff reported that the instructors teach a variety of types of courses and that the majority of instructors at risk have only had a few students test. The Commission was reminded that any changes to the text of the rules must be approved at the December meeting if the effective date will be July 1, 2022. The Commission was sent a proposal about a different way to score instructors and asked to bring this matter back to the Commission at a later date. Staff suggested having the Education Committee meet to discuss the proposal and the Commission concurred.

Exhibit 9,

Item 1

Reduce or repeal the withdrawal percentage for certifications/ approvals of education providers

and instructors

The Commission approved making no change to provision (c) in 58H .0210 or to provision (b) in 58H .0303. Miss Bode and

Mr. Lawing dissented.

Exhibit 9,

Item 2

Repeal the rule prohibiting instructors from obtaining, using, or attempting to obtain or use the real estate license examination questions.

The Commission approved staff recommendations and also directed staff to review the Prelicensing syllabus to ensure the content, level, and language match the State portion of the license examination

questions.

Exhibit 9,

Item 3

Consider limiting withdrawal of certification or approval to only Prelicensing courses.

The Commission directed staff to draft rule text limiting withdrawal of certification or approval of Education Providers and instructors to teach Prelicensing and Postlicensing courses when they do not meet the required threshold, and to allow them to provide the Update and elective CE courses. Mr. Black and Mr. Lindsey

dissented.

Exhibit 9,

Item 4

Consider the consequences when Education Providers reapply after

certification is withdrawn.

The Commission took no action on this item.

Exhibit 9,

Item 5

Consider exempting distance course instructors from

responsibility for students’ performance on the license exam.

The Commission took no action on this item.

Exhibit 9.

Item 6

Amend the education rules to require that Education Providers

and instructors have affiliation agreements and for education directors to notify NCREC of termination of instructor affilation.

The Commission took no action on this item.

Report on How Other Real Estate Commissions Audit and Regulate Broker Trust Accounts: Staff provided a report on how other Real Estate Commissions audit and regulate trust accounts. Staff reported that the Commission’s rules are in accordance with the majority of states in requiring all funds collected to be held in a trust account controlled by a broker with no access by a third party. States generally conduct audits, with a minority, including Virginia, requiring brokers to perform self-audits.

Report on Trust Account Rules: Staff provided a report on trust account rules regarding commercial real estate brokerage. The Commission indicated that they would look further into the question of whether the Commission should consider adopting specific trust account rules for large commercial firms that would allow them to deposit money directly into the owner’s account rather than first depositing it in the broker’s trust account.

General Update and BICUP Course Topics: The Commission reviewed a list of possible 2022-2023 Update course topics based upon suggestions provided by Commission members, staff, licensees, educators, brokers and the Update Topics Task Force to date. Staff will send an email to the Commission asking for their top five topics from pages 1-5 of the exhibit. Staff will then compile a list and send out an electronic survey to members to rank the topics for the Update course. At the December meeting, Staff will present the results of the survey so that the Commission can make a final decision.

Larry A. Outlaw Excellence in Education Award: Staff presented the proposed criteria for the 2022 Larry A. Outlaw Excellence in Education Award and the nomination guidelines, noting that it was unchanged from the prior year. The Commission accepted the criteria and process for the award. Staff will begin seeking nominations in December.

Report on License Numbers: As of November 1, 2021, there are 121,371 brokers and firms licensed by the Commission, as follows:

Next Commission Meeting: The next Commission meeting will be held at 9:00 a.m., Wednesday December 15, and can be viewed via Zoom online video.