Pending Cases: The Commission entered into consent agreements to suspend 6 licenses, denied the issuance of 1 license, accepted the voluntary surrender of 3 licenses, reprimanded 1 licenses, closed cases without action against 5 licensees, left cases pending involving 4 licenses, authorized RA Division to seek injunctive relief of 3 licensees, and ordered hearings in cases involving 16 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: 11; total approved: 8.
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 | |||
February 2023 | March 2022 through February 2023 | February 2023 | March 2022 through February 2023 | |
# Tested | 385 | 6072 | 18 | 266 |
% Pass both sections | 49% | 49% | N/A | N/A |
% Pass National section | 79% | 78% | N/A | N/A |
% Pass State section | 53% | 54% | 39% | 39% |
Regulatory Report: The Director of Regulatory Affairs reviewed a report showing the status of all cases pending in the Regulatory Affairs Division as of February 28, 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. Staff summarized H63 – Verification of Immigration Status – SAVE. The Commission directed staff to analyze bill H63 and provide input to the sponsors of the bill regarding Commission concerns.
Authority to Fine Licensees: The Director of the Real Estate Commission summarized the Commission’s prior interest in obtaining statutory authority to fine licensees for misconduct as a supplement to its existing authority to impose discipline. She noted that under the State Constitution, any fines received would go to the local school board rather than to the Commission. The last time the Commission pursued this was in 2010. At that time, staff reached out to the Association of REALTORS® (“NCR”) for support of the change; ultimately, NCR did not support it and no change was made. The Director indicated that if the Commission is interested in considering this matter again, staff could research it and bring back recommendations to the Commission.
Draft RPOADS Internal Policy: The Director of Regulatory Affairs reviewed a proposed internal policy for Commission review of the Residential Property and Owners’ Association Disclosure Statement (RPOADS) outside the rulemaking process. The NCREALTORS® would like to take the RPOADS form back to their Forms Committee for feedback. The Commission requested that acronyms in the Policy be defined and that specific contact information for key personnel be included. The Commission adopted the internal policy for the RPOADS review with the requested changes.
BIC Focus Groups: The Director of Regulatory Affairs provided a brief update on the progress of the BIC Focus Groups noting that she is working on a report and summary to present to the members at the April meeting.
Commendation: The Commission commended the Director of Education & Licensing and the Legal Education Officer on their recent presentation to the Durham Association of REALTORS®.
Closed Session: The Commission voted to meet in closed session pursuant to N.C.G.S § 143-318.11(a)(3) to consult with Special Deputy Attorney General Anne Brown regarding Leonard Paul LaRose v. NC Real Estate Commission; OAH case 23REC00687, and to consult with Commission counsel about a contract issue. At the conclusion of the closed session, the Director of the Real Estate Commission announced in open session that the Commission directed staff to send a letter to PSI about contract issues and to schedule a meeting with their representatives at the upcoming ARELLO meeting.
Report on March 8 Education Committee Meeting: The Director of Education & Licensing provided a report on the March 8 Education Committee meeting following a request that the Commission consider increasing the required number of Prelicensing course hours from 75 to 90. The Director noted that staff will review the Prelicensing course and the license examination and return with recommendations for the Commission.
Report on License Numbers: As of March 1, 2023, there are 127,234 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, April 19, 2023, at the Historic 1767 Chowan County Courthouse in Edenton, NC and is open to the public. It also can be viewed via Zoom online video.
Real Estate Manual Update
Every 2 to 3 years the Real Estate Manual is revised and updated per the latest law, rule and practice changes. The newest revision of the Real Estate Manual is now available through an online subscription under the Publications tab on our website. Or, order a print copy in late April.
Property Check/Fraud Alert Available At Many County Register of Deeds Websites
In North Carolina, 60 county Register of Deeds websites have a property notification alert service where you can enter your information, and be alerted if any documents are recorded regarding your property. Due to increasing instances of deed fraud and fake seller scams, it is highly recommended that you sign up for this free service if available in your county. They are named differently depending on the county, including Fraud Alert, Property Check and Property Notification, but they all serve the same purpose of sending you an email notice of a newly recorded document. For more information about deed fraud and actions to take if you become a victim, read this consumer article on our website.
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 April 19th in Edenton at the Historic 1767 Chowan County Courthouse. A Zoom link will be available at ncrec.gov on the day of the meeting.
By Tiffany Ross- Consumer Resource Officer & Bruce Rinne- Information Officer
Consumers need to be aware that there is now an organized effort of scammers engaging in deed fraud. They create deeds with false signatures of the seller, and have them illegally notarized by someone who is not a notary, or a real notary who was willing to accept a payoff and falsely notarize the document. These fraudulent documents are being taken to the Registers of Deeds and recorded, transferring the ownership from the unsuspecting rightful owner, to a new owner, who may or may not be a real person.
If undiscovered, this property may then be listed and sold to a bona fide purchaser for value. If this is the case, the new owner, this legitimate purchaser, is now the rightful owner of the property. The money has been stolen by the fraudster, and the original property owner has had their property stolen from them.
There is typically nothing that the property owner in a case like this did wrong. There is nothing they did to cause a scammer to target them, and if they are not made aware quickly enough, they may not be able to take action to stop it.
Many Register of Deeds offices in North Carolina now have a fraud alert that owners can sign up for to receive an email if there is any documentation filed against their property. If a fraudulent document is discovered, the property owner must take immediate action to try to retrieve rightful ownership of their property.
Actions to Take Immediately:
If you have not been a victim and would like to know ways to help protect yourself or your property, you may consider registering your property on the Torrens System. It is a lengthy and somewhat expensive process, but would prevent a property from being able to be fraudulently transferred.
There are other services that claim some ability to assist with protecting your identity/property, that offer monitoring and insurance you can purchase, that can assist you if you have to incur legal expenses to sue to reacquire your property. Just like any other crime, you should be aware and take precautions to protect yourself and your loved ones as much as you can. Keeping an eye on your property with the Register of Deeds regularly (some sources recommend monitoring your property weekly) is the best way to prevent yourself from becoming an unsuspecting victim of this type of scheme.
How You Can Protect Your Clients:
1 – Educate them! The more people know, the more they can be on alert and check on their property more frequently.
2 – Be aware that fraudulent buyers and sellers are on the rise, and brokers must exercise extra caution in verifying both. Be suspicious of would-be clients that will not meet with you by a video chat or means that will allow you to see and speak with them.
3 – Check the deed and public records for a property your buyer-client is considering purchasing, or that your seller-client is considering selling, to make sure that there wasn’t a suspicious recent transfer in ownership that could be fraudulent. If suspicious, dig deeper, make efforts to contact the listing agent or seller if not listed, to be certain the due diligence has been performed to properly identify the seller as legitimate.
4 – If you discover that a fraudulent transfer has occurred, assist your client in taking immediate action described above to have the best chance of restoring their property, if they are the seller. If your client is the buyer, notify the rightful owner of the transfer even if you are the buyer’s agent, as your duty to discover and disclose material facts is to all interested/involved parties, not just your client.
By Tiffany Ross- Consumer Resource Officer & Bruce Rinne- Information Officer
The North Carolina Real Estate Commission has been receiving an increasing number of calls and emails about fraudulent rental ads attempting to scam innocent people out of their security deposits or application fees. These scam artists can be located anywhere in the world, yet claim they are local property owners. Here is information about rental scams and the Red Flags to alert you of a potential scam.
How You Can Avoid a Rental Scam
Many rental scams take place on social media. For example, a fake owner or fake property manager posts on Facebook, Craigslist, Twitter or other social media outlets. The posts look legitimate and may even have actual pictures of the real property they are claiming to be renting. In reality, the scammer has no connection to the property or right to advertise it, but the ad will ask for upfront payments to even view the property, or first month’s rent or a security deposit in advance. They may promise the money will be held in a trust account, and the destination appears to be legitimate, but it really goes to a scammer who is never heard from again. Being aware of this scam and not falling for these tactics can prevent the loss of hundreds or even thousands of dollars.
Action You Can Take:
Red Flags That You May Be Dealing With a Scammer
What To Do If You Are Already a Victim Of a Rental Fraud Scam
If you have already responded to a fake ad and sent money, only to never hear from the scammer again, you can contact the North Carolina Attorney General’s office to notify them of the scam and provide as much information as you can. 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 Your Clients
If you work in sales and have clients that need to rent before purchasing a home, educate them on these dangers and assist them by looking up properties listed in the MLS or refer them to legitimate property management company websites in your area. Provide information like this article to help them to avoid the scams and traps, and assist them with verifying property owners through a public records search. Stay in contact with them, and make sure they are aware of NC Landlord and Tenant laws. They can contact the Commission’s Regulatory Affairs Division at (919) 719-9180 if they have questions or concerns about the actions of a licensed property manager. Or, they can contact the Attorney General’s office (877-566-7226) if they have concerns about the actions of an unlicensed property owner, managing their own property, or other unlicensed property management activity.
Wire Fraud Conferences
Wire Fraud conferences began last week and will be held across the State this spring and summer. Since 2015, wire fraud has become increasingly targeted towards real estate transactions resulting in the loss of BILLIONS of dollars. With growing usage of electronic funds transfers, real estate is targeted because of the large amounts of money exchanged. From due diligence deposits, to earnest money, buyer funds to close, seller proceeds and mortgage payoff funds, there are several opportunities for a scammer to try to intercept money in a transaction. Come and learn about wire fraud schemes, how they are successful, and how to avoid them yourself and/or for your clients. Read last month’s Bulletin article for more details about the conferences. The next session is 3/13/23 in Raleigh, with several more to come. Register now for the Raleigh or subsequent conferences!
Illegal Covenants Are Not Enforceable
NCREC recently received a call from a broker about a restrictive covenant in a neighborhood that stated ‘No race other than Caucasian.’ The seller and broker were concerned about how to address this covenant, as it was recorded to the property in 1955. Since then, there have been many Federal and State Fair Housing laws and rules passed declaring housing discrimination against protected classes illegal. Those protected classes are: race, color, religion, sex (including sexual orientation or gender identity), national origin, familial status (including pregnancy) and disability. If there are covenants that are recorded on a property that are now illegal, these cannot be enforced. A broker should disclose the existence of the covenant if they are aware of it, and the fact that it is legally unenforceable. While there is proposed federal legislation in the works, there has not yet been a law passed that removes such covenants.
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 this month is March 15th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.