Director of Regulatory Affairs Sworn in as ARELLO® President
We congratulate Janet Thoren, the Director of Regulatory Affairs, for being sworn in as President of ARELLO® during their national conference last month in Chicago.
NCREC ARELLO® award
ARELLO® awards are national honors given to states across the country for cutting edge initiatives in the real estate regulatory industry. This year we received the ARELLO® EDUCATION AWARD – Prelicensing Education, for our groundbreaking Item Writing Workshops, where Commission staff and approved real estate instructors participated in creating test items for the licensing exam.
You are invited!
The monthly Real Estate Commission meetings are always open to the public. You are invited to attend in person or online via Zoom. The meeting tomorrow, October 16th is in Duck at The Sanderling, Partridge Room, 1461 Duck Road, Duck, NC 27949. A Zoom link will be available at ncrec.gov on the day of the meeting.
Commission Member Jeff Malarney and Director of Education & Licensing Len Elder Address Inaugural Legal Exchange
This month, Immediate Past Chair Jeff Malarney served as a panelist alongside other industry experts for a discussion about AI in real estate at both the inaugural ARELLO Legal Exchange, and ARELLO’s Q3 Webinar. The panel, moderated by Director of Education and Licensing Len Elder, addressed the pros and cons of artificial intelligence in the real estate industry.
Do you have questions about filing a complaint?
Consumers and brokers often have questions about the complaint process and what to expect. NCREC has created 3 new videos that explain how to file a complaint and the investigations process. View this video playlist Navigating Complaints on our YouTube channel.
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 September 18th in Rocky Mount at the Doubletree Rocky Mount (Doubletree Ballroom), 651 N. Winstead Avenue, Rocky Mount, NC. A Zoom link will be available at ncrec.gov on the day of the meeting.
Director of Education and Licensing, and Diversity, Equity and Inclusion Officer attend National Fair Housing Conference
Len Elder, the Director of Education and Licensing and Minerva Mims, Diversity, Equity, and Inclusion Officer, attended the National Fair Housing Alliance (NFHA) Conference in Washington, DC this month. The conference theme was “Housing Equity Now: Building an Inclusive and Just Future.” The NFHA works to eliminate housing discrimination and ensure equitable housing opportunities for all people and communities through its education and outreach, member services, public policy, advocacy, housing and community development, tech equity, enforcement, and consulting and compliance programs.
Dangers of Unpermitted Spaces in a Property
A broker’s failure to disclose that a property has an unpermitted space is a common complaint received at the Commission. It is important that consumers understand the dangers of unpermitted spaces in a property, and why an inspection and corrective action is recommended for your protection. Watch this video, Dangers of Unpermitted Space, to learn about possible fire and flood hazards if construction work in a property is not properly permitted.
To learn more about the types of projects in a home that require permits, contact your local municipality’s planning and development office for details. We strongly recommend that you become knowledgeable on the risks associated with purchasing a property without the appropriate permits.
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 next meeting is August 14th at the Commission building, 1313 Navaho Drive, Raleigh, NC. A Zoom link will be available at ncrec.gov on the day of the meeting.
Why is renewal important to consumers?
Licensed real estate brokers and firms who do not renew their licenses by June 30th , will have expired licenses on July 1st. This means that they are no longer licensed to practice real estate and must cease all brokerage activities immediately. So, if a consumer has an agency agreement with a firm that goes inactive, the agency agreement will no longer be enforceable, as the broker can no longer represent the consumer.
NCREC releases, “Careers in Real Estate: An Inside Look”
As a part of an initiative to reach consumers with information about real estate related careers and how to get started with obtaining a real estate license, NCREC created this video. “Careers in Real Estate: An Inside Look”. Viewers will receive an inside look at several real estate and related career opportunities, from home inspectors and attorneys to appraisers and property managers. Visit our YouTube channel to watch this video and many other new resources that have been created for consumers and brokers.
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 next meeting is July 17th at the Commission building, 1313 Navaho Drive, Raleigh, NC. A Zoom link will be available at ncrec.gov on the day of the meeting.
Fair Housing Highlight
The Commission’s Diversity, Equity, and Inclusion Officer and Consumer Resource Officer attended Fair Housing events in Gastonia and Charlotte in April. The events highlighted the needs of vulnerable populations such as the homeless, elderly people, single parents, youth aging out of the foster care system, disabled veterans, and other citizens. Data was provided highlighting the gap between the percentage of people in the US who have at least one disability versus the amount of housing accessible for disabled people. The following federal, state, and local resources were shared with attendees:
| Legal Aid Fair Housing Project (housing discrimination) | Legal Aid Housing (evictions, fair housing, foreclosures, housing discrimination, etc.) |
| Continuum of Care (established by HUD) (homelessness assistance) | United Way (housing, general assistance) |
| GLCImpact.com (homelessness) | NC211.org (emergency housing assistance, basic needs referral service of the United Way of NC) |
| John Chafee Grant (youth aging out of foster care) | Section 8 / Housing Choice Voucher (public rental assistance) |
| NCHFA Housing Partnership (funding supportive housing, accessibility modifications) | HUD-VASH Vouchers (housing assistance for veterans) |
It’s Renewal Time
Brokers must renew their licenses between May 15th-June 30th of every year in North Carolina. This license renewal requirement applies to all brokers (i.e., provisional, full, QBs, and BIC Eligible). QBs must renew their firm licenses between May 15th and June 30th. Remember, brokers do not have to complete CE before renewing their license. Review this eBulletin article for more details.
Are you interested in getting a real estate license? Watch this YouTube video, Overview of the Licensing Process, for steps to get started.
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 next meeting is May 22nd at the Commission building, 1313 Navaho Drive, Raleigh, NC. A Zoom link will be available at ncrec.gov on the day of the meeting.
Spring Educators Conference was a great success!
This year the North Carolina Real Estate Commission hosted its 2024 Spring Educators Conference at the McKimmon Center on March 19,, 2024. The theme of the conference was NCREC Education Superhero Comicon. The attendees learned how to use AI in real estate education, information regarding the exam transition, and handling disruptions in the classroom. For a sample of how to use AI to create a PowerPoint view this video. Congratulations to our 2024 Larry A. Outlaw Excellence in Education Award winner, Bill Gallagher!
Exam Provider Transition Complete
The transition from PSI to PearsonVUE has been implemented successfully. Along with the change in exam providers, there are updates to several resources, and the following new videos are available:
1 – Updated RELINC: https://www.ncrec.gov/Pdfs/Licensing/General.pdf
2 – Updated Syllabus: https://www.ncrec.gov/Forms/Education/Prelicense_Course_Syllabus.pdf
3 – Four new videos on our YouTube Channel about the licensing and examination process: https://www.youtube.com/NCREC/videos
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 on April 24th at the Commission building, 1313 Navaho Drive, Raleigh, NC 27609. A Zoom link will be available at ncrec.gov on the day of the meeting.
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.
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.
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.
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.