Commission Meeting of August 14 2019

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

Commission Meeting of August 14, 2019

Pending Cases: The Commission accepted the voluntary surrender of one license; entered into consent agreements to permanently revoke one license, revoke one license, and suspend three licenses; rejected a proposed consent agreement involving one licensee; authorized its Regulatory Affairs Division to seek injunctive relief, if necessary, in one case; and ordered hearings involving 10 licensees.

License Applications Involving Character Issues: Applications for licenses from persons who have character issues such as prior criminal convictions or disciplinary action by another licensing board are separately reviewed by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews. Total candidates reviewed: 29; total approved: 26.

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

New Instructor Seminar (NIS): Staff reported to the Commission on the new two-day format for the New Instructor Seminar, requiring live presentations by each participant in lieu of the previously required video. The NIS first offering was a success, generating positive feedback from the participants about the class and the Commission.

Emerging Trends: Commission Member Cindy S. Chandler reviewed with the Commission an article from the Inman News entitled, Amazon Gets into Real Estate with Major Realogy Partnership. The Commission also discussed the duty of property managers when advertising owners’ property in online, unlicensed rental booking sites.

Report on License Numbers: The Commission was advised that as of August 1, 2019, there are 106,476 brokers and firms licensed by the Commission, as follows:

• Active Brokers 70,224
• Active Provisional Brokers 9,318
• Inactive Brokers 23,073
• Inactive Provisional Brokers 7,017
• Firms 12,926
• Brokers-in-Charge 16,798
• BIC-Eligible Brokers 3,584

Next Commission Meeting: The next Commission meeting will be held at 9:00 a.m., Wednesday, September 11, 2019, at Raleigh, North Carolina and is open to the public.

Hurricanes, Evacuations, and Vacation Rentals

With hurricane season well underway, a review of the laws governing hurricanes, evacuations, and vacation rentals is appropriate.

( 1) The first and most important thing to remember is that when state or local authorities order a mandatory evacuation of a coastal area, tenants occupying vacation rental properties must comply with the order. Evacuations are ordered to protect human life and health and are not undertaken lightly. Brokers managing vacation rental properties should support state and local authorities by encouraging and facilitating tenant compliance with evacuation orders.

(2) When a vacation tenant complies with an evacuation order, he or she is generally entitled to a refund of a share of the money he or she has paid for the rental (rent, security deposit, taxes, etc.) prorated for each night the evacuation order was in effect.

(3) There is an exception to this rule, however. If the tenant was offered travel insurance that covered the risk of mandatory evacuation, then the landlord has no obligation to refund the tenant’s money. To trigger the exception, the cost of the insurance offered cannot exceed 8% of the cost of the vacation rental and the policy cannot exclude the particular storm. It is important to note that some vacation rental insurance companies exclude coverage for storms that have been named by the National Hurricane Center prior to date the insurance was purchased. If a storm is named prior to the purchase of travel insurance and, if the insurance will not cover the tenant for losses or damages resulting from a mandatory evacuation or from damages and losses caused by the named storm, then the tenant is entitled to a refund from the landlord of all monies paid.

(4) If, following the storm and after any mandatory evacuation has been lifted, the landlord or his broker cannot provide a promised rental property to a vacation rental tenant – whether the reason is that the house was significantly damaged or that it is inaccessible due to damage to or closure of roads or ferries – the tenant is entitled to either a refund of his money or the substitution of a reasonably comparable property at the same cost. This refund may come in the form of a paid claim against travel insurance. Tenants and vacation rental managers are encouraged to read and understand the limits of coverage being offered.

(5) Go to readync.org which provides emergency management planning tips including information about current mandatory evacuations.

(6) Go to https://ncdoj.gov/price-gouging-law-in-effect-in-north-carolina-2/ for information about price gouging laws following the declaration of a state of emergency in North Carolina.

Commission Meeting of July 17 2019

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

Commission Meeting of July 17, 2019

Pending Cases: The Commission accepted the permanent voluntary surrender of one license; entered into consent agreements to suspend five licenses; following a hearing, denied the application for reinstatement of one broker license; reconsidered its decision to require one licensee to complete the Commission’s Issues and Answers Course and instead ordered that the Consent Order addendum be amended to include a course on agency; and ordered hearings involving seven licensees.

License Applications Involving Character Issues: Applications for licenses from persons who have character issues such as prior criminal convictions or disciplinary action by another licensing board are separately reviewed by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews.
Total candidates reviewed: 18; total approved: 11.

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

H770/S.L. 2019-91: Staff reported that House Bill 770, “Freedom to Work/Occupation Licensing Board Reform,” had passed the legislature and is now Session Law 2019-91. The Commission authorized staff to proceed with the temporary and regular rulemaking process related to the required character predetermination process, with the understanding that the Commission will review draft text at its next meeting, and a public hearing held later in the year in accordance with the requirements of the law.

Report on Broker, Firm, School, Sponsor, and Timeshare Renewals and Reinstatements: Staff reported that as of June 30, 2019, 94% of licensees (103,457) had renewed their licenses, as compared with 92% the prior year, and 94% the year before that. Staff noted as of July 17, 2019, the Commission has 104,714 total licensees. Staff reported that out of the 38 Timeshare Projects, 32 renewed by June 30, 2019, and 30 of the 32 renewed online. The Commission also received data on private school licenses, public school approvals, continuing education sponsor approvals, and instructor approvals.

CE Student Survey Report FY2019-20: Staff reviewed with the Commission the results of surveys of Continuing Education students conducted throughout the year and informed the Commission that the report will be provided annually in July.

Emerging Trends: Chair-elect Jeffery Malarney shared with the Commission an article from the Kellogg School of Management at Northwestern University concerning the relationship between startups and regulators.

Report on License Numbers: The Commission was advised that as of July 1, 2019, there are 103,557 brokers and firms licensed by the Commission, as follows:

• Active Brokers 68,624
• Active Provisional Brokers 8,511
• Inactive Brokers 22,214
• Inactive Provisional Brokers 6,639
• Firms 12,486
• Brokers-in-Charge 16,638
• BIC-Eligible Brokers 3,601

Next Commission Meeting: The next Commission meeting will be held at 9:00 a.m., Wednesday, August 14, 2019, at Raleigh, North Carolina and is open to the public.

Opioid Crisis

We are partnering to support More Powerful NC, a public education campaign that launches this week to raise awareness about the opioid epidemic and empower North Carolinians to take action to address the crisis in their homes, neighborhoods, and communities.

The More Powerful NC campaign is supported by a coalition of North Carolina businesses, healthcare organizations, and state agencies that helped create, fund, and provide resources for this campaign, which was initiated by Attorney General Josh Stein and DHHS Secretary Mandy Cohen.

The campaign website, www.MorePowerfulNC.org, helps people understand the risks associated with opioids and provides treatment and recovery resources. The website also gives people a wide range of tools and ideas to get involved in their communities and be part of our work to confront the epidemic.

We hope that you will take the time to visit the More Powerful NC website, take the pledge to take action, and share the campaign website with friends and family. You can also share the social media post below to help others learn about the campaign (and don’t forget to use the hashtag #MorePowerfulNC).

The only way we can combat this epidemic is if we all step up and do our part. Together, we are stronger than the opioid crisis.

Wire Fraud in Real Estate Closings

Highjacked real estate wire transfers resulted in losses of more than $56 million in 2017 alone.   

How are cyber criminals intercepting real estate funds?  Take a look at this video from NAR for important information brokers should know.

https://www.nar.realtor/videos/cyber-crime-cyber-security-and-the-real-estate-professional

New Disclosure Required for Applications and Renewals

Effective January 1, 2018, as required by the NC state legislature in NCGS § 143-765, all applicants for occupational licenses, including license renewal, must disclose any investigations for employee misclassification.

**NCGS § 143-765 applies to applications for and renewals of all occupational licenses, permits, and certifications, so the certification and disclosure statements will be required during the license renewal process of existing licensees. License renewal occurs annually between May 15 and June 30.  Due to the new requirement, every licensee will be required to complete the renewal process individually.  Brokers-in-Charge will not be able to renew the licenses of affiliated brokers.** 

All North Carolina Real Estate Commission applications — including broker, firm, limited nonresident commercial, and private school licenses, temporary practice permits, and timeshare registrations — have been updated to be in compliance with the new law.

All applicants must certify that they have read and understand a Public Notice Statement from the Employee Classification Section of the State Industrial Commission (http://www.ic.nc.gov/121317ECSPublicNotice.pdf) and must disclose any investigations for employee misclassification.  If an applicant does not provide the certification and disclosure, the NC Real Estate Commission is not permitted to process the application.  Contact information for questions and inquiries is provided on the Public Notice Statement.

Free Webinar on Wire Fraud in Real Estate Transactions

There will be a free lunch webinar on wire fraud in real estate transactions sponsored by the Best Practices Task Force compromised of members from the NC Bar Association Real Property Section, RELANC and the NC Land Title Association.  Funding for the program is provided by RELANC and this link has details and directions on how to register:

http://mailchi.mp/58baf282792e/webinar-invitation-from-relanc-protecting-your-clients-from-cyber-fraud?e=d23bafb629

Two articles on the subject may also be of interest:

Best Practices to Prevent Interception of Incoming Wires:

http://files.constantcontact.com/a6ab3bd5401/d115d05c-d5de-459d-aff0-b94d976fd325.pdf

Best Practices for Outgoing Wires:

http://myemail.constantcontact.com/Wire-Instruction-Fraud-Continues-to-Plague-NC-Lawyers.html?soid=1118263556714&aid=wQQ2Rx1p6hU

Noncommercial Underground Storage Tanks (USTs)

The Department of Environmental Quality (DEQ) and Environmental Management Commission (EMC) have given preliminary approval to proposed temporary rules addressing noncommercial underground storage tanks (USTs).  A public hearing is scheduled for Monday, July 31, 2017. For information about what is considered a noncommercial UST, what to do in case of a possible leak or spill, and who to contact for more information, see DEQ’s summary and flow chart .

It’s June 1! Have you completed CE, yet?

To maintain an Active license, all brokers must complete eight (8) hours of continuing education by 11:59pm on June 10 each year.   Provisional Brokers and non-BIC Brokers must take the General Update course and one Commission-approved elective. BICs and BIC-Eligible Brokers should take the BICUP (Broker-in-Charge Update) course and one Commission-approved elective. See Commission Rule 58A .1702.

Reminder:  It’s also time to renew your license.  Visit the Commission’s homepage (www.ncrec.gov) to renew your individual, firm, or limited nonresident commercial license.  Renewing online takes less than 5 minutes. The deadline for license renewal is June 30.

Corean E. Hamlin Named Real Estate Commission Director of Education and Licensing

Corean E. Hamlin has been named Director of Education and Licensing for the North Carolina Real Estate Commission, effective December 14, 2016.

Hamlin joined the Commission as Education and Licensing Officer in 2014.

Hamlin holds a Master’s Degree from UNC-Greensboro and the Distinguished Real Estate Instructor (DREI) designation from the Real Estate Educators Association.

After a decade as a professional educator in other industries, Hamlin entered the real estate business, joining her family’s Asheville-based real estate firm as a residential sales broker in 2003.  From 2007-2014, Hamlin served as Instructor, Education Director, and Communication Director for the Asheville Board of Realtors®.  Additionally, she taught real estate prelicensing, postlicensing, and continuing education courses at Cumbie and Trull School of Real Estate from 2010-2014.

The primary responsibility of the Director of Education and Licensing is to plan and direct the Commission’s education, examination, and licensing programs and operations on a statewide basis.