Commission Meeting News
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 August 16, 2023
Pending Cases: The Commission entered into consent agreements to suspend 13 licenses, accepted the permanent voluntary surrender of 3 licensees, revoked 2 licenses, reprimanded 1 licensees, closed cases without action against 4 licensees, left cases pending involving 7 licensees, and ordered hearings in cases involving 18 licensees. The Commission approved payment from the Real Estate Education and Recovery Fund in the amount of $7,215 to a consumer who suffered a direct monetary loss because of certain acts committed by a real estate licensee.
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: 6, total approved: 2, total approved with conditions: 1, continued: 3, and deferred: 0.
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
DEI Staff Survey Results: Staff presented the DEI staff survey results noting that 74% of staff fully participated in the survey, 9% of staff partially completed the survey, and 17% of staff did not complete the survey.
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.
BIC Span of Control: The Director of Regulatory Affairs reviewed the Broker in Charge Education and Span of Control report. Mr. Lindsey commended the Director of Regulatory Affairs and Staff on the updated presentation of the survey results. Mr. Malarney and Mr. Lindsey created a work group to review the report and make recommendations about the next steps to pursue relating to the span of control of brokers-in-charge. The Executive Director asked Commission members to email her or the Director of Regulatory Affairs their feedback on BIC span of control.
Residential Property and Owners’ Association Disclosure Statement: Staff presented the public comments that were submitted relating to the proposed revisions to the Residential Property and Owners’ Association Disclosure Statement form. Staff received 684 responses from brokers, attorneys, organizations, and the general public. The overall feedback was 91% positive. The Director of Regulatory Affairs provided a memo to the Commission members with preliminary staff recommendations for consideration by the Commission. Staff provided an in-depth review of each of these recommendations.
Item-Writing Workshops: The Director of Education & Licensing provided a report on proposed item-writing workshops to help education providers and instructors develop meaningful end-of-course examination questions. There will be eight item writing workshops with +20 attendees. Four of the workshops will be held in Raleigh and four will be held in the Charlotte area beginning in October.
Education Town Hall: The Director of Education & Licensing provided a report on the August 9, 2023, Education Town Hall noting that it was structured as a ninety-minute open forum for the 70 instructors present. Most of the time was spent discussing the shift from PSI to Pearson Vue for the Commission’s license examination. The educators present provided a positive response to the change of testing providers.
Other Business: The Executive Director and the other members of the Commission recognized Mr. Bullard for his appointment to the National Association of REALTORS® Legal Action Committee.
Report on License Numbers: As of August 1, 2023, there are 121,250 brokers and firms licensed by the Commission, as follows:
Active Brokers 80,555
Active Provisional Brokers 4,685
Brokers-in-Charge 17,520
BIC Eligible Brokers 6,034
Inactive Brokers 24,066
Inactive Provisional Brokers 6,554
Firms 16,411
Limited Nonresident Commercial Brokers 218
Next Commission Meeting: The next Commission meeting will be held at 9:00 a.m., Wednesday, September 13, 2023, in the Commission’s office in Raleigh and is open to the public. It also can be viewed via Zoom online video.
Staff Appreciation and Achievements
During the August Commission meeting, a staff appreciation luncheon was held to thank the staff for their enthusiastic service to NCREC and the public. Several service awards were given in gratitude for 5, 10 and 15 years of dedicated service. Special congratulations to Janet Thoren, who was awarded the 25 year service award, and Miriam Baer who received the 35 year service award. Sincere thanks to all of our valued staff, you are appreciated.
Is No Due Diligence Period Allowed In a Contract?
As a result of a very competitive real estate market, buyers have been coming up with new strategies to attract the seller to their offer over others. One such strategy that has recently evolved in NC is a no due diligence period offer, in which the buyer offers a substantial due diligence fee and earnest money deposit, but does not require a period of time to investigate the property to change their mind and get their earnest money back. Calls have come in asking if this is allowed. Buyers and sellers can agree to any legal terms that they wish in a contract. It is recommended to consult an attorney about the risks of this type of offer, and to understand the potential losses of both the due diligence fee and earnest money if the buyer later changes their mind.
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 13th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.
Wire Fraud Series
Last week the final wire fraud seminar was held in Asheville. These courses were designed by the Commission, the NC State Bar and Investors Title, to debunk myths about wire fraud, teach prevention tactics, discuss liability and reporting to authorities, and review recovery data. If you were unable to attend one of these courses and would like information or resources on wire fraud, visit these links to assist you in wire fraud prevention and/or recovery.
C.Y.B.E.R. – Overview of how to assess wire fraud risk and establish policies for prevention.
S.I.M.P.L.E. – Seller and notary identity verification methods and red flags.
W.I.R.E. – Process and worksheet to verify wires.
F.A.S.T. – Step by step plan and worksheet to take quick action if wire fraud is discovered.
Do you know what a CoBRA flood zone means?
A CoBRA zone is an area designated by the Coastal Barriers Resources Act. Properties located in CoBRA zones are not able to obtain federal flood insurance, or federal funds for mortgage products. It is important to research properties before placing an offer to make sure that they qualify for federal funding if needed. Failure to do so could result in the loss of due diligence fees, if the inability to obtain funding/insurance is discovered after entering into a contract to purchase a property. See page 410 (9-19) of this document from fema.gov for more details about CoBRA zones.
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 August 16th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.
Commission Meeting News
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 July 19, 2023
Pending Cases: The Commission entered into consent agreements to suspend 17 licenses, 1 instructor approval, and 1 education provider approval, accepted the permanent voluntary surrender of 1 instructor approval, reprimanded 4 licenses, extended the time to satisfy conditions involving 1 licensee, closed cases without action against 3 licensees, left cases pending involving 6 licensees, denied 1 license following a hearing, continued cases involving 3 licensees, and ordered hearings in cases involving 14 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: 10, total approved: 3, total approved with conditions: 2, 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
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.
BIC Span of Control: The Director of Regulatory Affairs reviewed the report on the BIC Focus Groups and surveys and asked Commission members to consider what actions and next steps they might like to pursue relating to the span of control of brokers in charge. The report will be reviewed at the August meeting and staff will seek the Commission members’ feedback on each of the topics listed.
Residential Property and Owners’ Association Disclosure Statement: Staff reported that the Residential Property and Owners’ Association Disclosure Statement rule changes were approved at the Rules Review Commission on June 15, and effective on July 1, 2023. The public comment period for the RPOADS form is open until August 1, 2023. The comments received during this period will be presented to the Commission at the August 16, 2023, meeting.
Commission Commendations: Mr. Fox commended Mr. Malarney and Mr. Lindsey on their elections as Chair and Vice-Chair of the Commission. He also commended Ms. Mallette on her nomination to the North Carolina Business Court and Mr. Black for his work as Chair of the Commission this year.
Renewals: The Director of Education & Licensing reported that as of July 1, 2023, 90% of brokers, and 89% of firms renewed their licenses, which is slightly below previous years. A total of 3,235 licensees were marked inactive due to a CE deficiency, and 13, 757 licenses expired due to the failure to renew. Further, he stated that 1,015 BICs lost their BIC status. Out of approximately 129,000 licensees, only 126 licenses were affected by an inactive BIC, 12 licensees were affected by a BIC who failed to complete CE, and 62 licensees were affected by an expired BIC.
Education Provider and Instructor License Examination Performance: The Director of Education & Licensing provided a report on the Education Provider and Instructor License Examination Performance. He indicated that 3,017 people tested on the NC licensing exam and first-time test takers had a 67.5% yearly pass rate. Sixty-four education providers offered the prelicensing course and only 3 fell below the 40% minimal competency threshold. Additionally, there were 147 instructors who taught prelicensing and only 6 instructors went below the 40% minimal competency rule. The Director commended the education providers for working to improve their delivery of education. Ms. Chandler asked that the Commission discuss the feasibility of allowing instructors to take a licensing exam periodically in order to determine the instructor’s competency level, noting that some instructors may be presenting incorrect information.
Year-End CE Student Survey: The Director of Education & Licensing provided a report on the year-end CE student survey noting that 13,244 surveys were returned over the course of the year. According to the survey results, there has been a transition of some courses from Zoom back to in-person. He noted that the survey respondents indicated that the overall performance of instructors and the perceived quality and value of the course remains very high. There were also improvements reported in student engagement and instructor delivery. In addition, the report included the most frequent comments on CE courses and the Update course.
Report on License Numbers: As of July 1, 2023, there are 115,911 brokers and firms licensed by the Commission, as follows:
Active Brokers 79,298
Active Provisional Brokers 4,373
Brokers-in-Charge 17,223
BIC-Eligible Brokers 6,178
Inactive Brokers 21,133
Inactive Provisional Brokers 5,546
Firms 15,285
Limited Nonresident Commercial Brokers 195
Next Commission Meeting: The next Commission meeting will be held at 9:00 a.m., Wednesday, August 16, 2023, in the Commission’s office in Raleigh and is open to the public. It also can be viewed via Zoom online video.
NCREC is proud of our own award winners at the National REEA Conference.
Commission Member Cindy Chandler and Legal Education Officer Kizzy Crawford-Heath received high honors at the National Real Estate Educators Association conference last month in Las Vegas. The 2023 Classroom Education Program of the Year Award was bestowed on Chandler, DREI, for her work on the commercial version of the Commission’s mandatory Update course. The 2023 Rising Star Award, was bestowed upon Crawford-Heath, DREI, for her contributions at REEA conferences and the DREI summit.
HOA/POA Lawsuit Concerns?
The existence of a lawsuit involving a Homeowner’s or Property owner’s association (HOA/POA) that affects the subject property is a material fact that must be discovered and disclosed by licensed real estate brokers in NC. If you are considering a property that is subject to an association, you should ask the association directly if there are any lawsuits that could affect the property. You may also ask the licensed brokers involved in the transaction, if any, to assist you with gathering that information. Depending on the outcome of a lawsuit, assessments could be levied against the property owners to cover the legal expenses incurred.
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 August 16th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.
Update Instructor Seminar
Last month we held our first two In-person Update Instructor Seminars for the 23/24 license year in Raleigh and Charlotte. They were a great success! This course is for NCREC approved instructors only. There is no fee for the course, and no CE or Instructor credit will be awarded. There are 5 remaining sessions scheduled both in-person and by zoom, view and register for them here.
Small Claims Court Process
Buyers often ask how they can pursue a seller if they believe they are entitled to a refund of earnest money or due diligence fees paid. For an amount less than $10,000, the claim can usually be handled before a magistrate in small claims court. In NC, depending on the county, the maximum amount that can be claimed in small claims court is between $5,000 to $10,000. If your claim is greater than the small claims amount but less than $25,000, the case needs to be filed in district court. If greater than $25,000, your case must be filed in superior court. The plaintiff will need 3 copies of their complaint, 3 copies of the Magistrate Summons, and a filing fee of $96.00 to file a case in small claims court, although local requirements may vary. More information and forms can be found on the NC Judicial Branch 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 this month is July 19th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.
Commission Meeting News
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 June 14, 2023
Pending Cases: The Commission entered into consent agreements to suspend 9 licenses, accepted the permanent voluntary surrender of 1 education provider approval, accepted the permanent voluntary surrender of 1 license, closed cases without action against 2 licensees, left cases pending involving 1 licensee, approved 1 license following a hearing, granted approval to seek injunctive relief if needed against 2 individuals, 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 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: 9, total approved: 4, total approved with conditions: 3, continued: 1, 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
Legislative Report: Staff 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.
Annual Rulemaking: Staff reported that the proposed rule changes that the Commission voted to adopt at its April 19, 2023, meeting were approved by the Rules Review Commission on May 18, 2023, and are posted on the Commission’s website. The rules are effective July 1, 2023.
Renewals: The Director of Education & Licensing reported that 72% of brokers and firms had renewed as of June 14, 2023. They stated that since May 15, License Services staff have answered over 16,400 phone calls. Further, as of June 14, 3,246 brokers were CE-deficient because they did not meet the June 10 deadline. Based on past data, the Director of Education & Licensing is expecting approximately 750 brokers to remedy their CE deficiencies.
Update Course Development: The Director of Education & Licensing and the Legal Education Officer reported that the 2023-2024 Update course is complete. The student manual and the slide presentations have both been shortened in response to feedback from education providers. The first Update Instructor Seminar was taught on Tuesday, June 13, 2023, to 80 instructors at the McKimmon Center at NC State University.
Report on License Numbers: As of June 1, 2023, there are 129,601 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, July 19, 2023, in the Commission’s office in Raleigh and is open to the public. It also can be viewed via Zoom online video.
Renewal Update – Last Chance!
All broker and firm licenses must be renewed by June 30th. Provisional brokers, brokers, BIC’s, firms, limited nonresident commercial brokers, all licenses must be renewed by 6/30. Failure to renew will cause your license to expire. If a license expires, all brokerage activity must cease. No actions that require a real estate license are allowed (including referrals). If you allow your license to expire, and wish to practice real estate in the future, you will have to reinstate and reactivate your license. This will require several steps, which get more involved the longer you wait. Brokers can check their renewal status by logging in under the licensing tab on our website, and get answers to the most frequently asked questions in this month’s eBulletin article.
Do I need a real estate license to co-host an Airbnb?
We receive calls daily asking if co-hosting property on Airbnb requires a real estate license. If you are performing cleaning, maintenance, recommending restaurants or local attractions, these type of activities do not require a license. If you are handling funds of others, negotiating lease terms, or collecting rent or deposits, these activities require a real estate license. Be careful of the terminology you use. Do not call your fees a ‘commission’ or a ‘management fee’ as this implies that you have a license that enables you to receive those fees. Instead, you should consider using terms such as ‘service’ or ‘maintenance’ fees or something comparable, to prevent confusion about the services you are providing. View GS 93A-2(a) for a definition of a real estate broker and a list of activities requiring a real estate license.
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 July 19th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.
All renewals due by 6/30.
All broker and firm licenses must be renewed by June 30th. Brokers can check their renewal status by logging in under the licensing tab on our website, and get answers to the most frequently asked questions in this month’s eBulletin article.
Questions about estates?
We receive many calls with questions about estates. It is possible for a licensed broker to list a property for sale on behalf of an executor or administrator of an estate. However, everyone involved must follow NC law regarding probate of an estate. Advice from a probate attorney is recommended for both the broker and executor or heir. View this link for details on estates and the probate process.
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 tomorrow here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.
Only 10 days for Continuing Education
The continuing education (CE) deadline is quickly approaching. All GenUp/BICUp and Elective courses must be completed by June 10th to remain actively licensed on July 1st. Visit the Education tab on our website ncrec.gov, and select Search CE Course Schedule. Enter your preferred search parameters to find available classes near you.
Bedrooms, Occupancy Limits and Square Footage
Recently we have received calls with questions about the definition of a bedroom, e.g., if it has to have a closet, door or even 4 walls. One consideration for the bedroom question is what the sewer or septic occupancy will allow. City/county sewer and private septic systems have limits on occupancy based on what the system has been designed to handle, and you cannot advertise more bedrooms than the occupancy limit. Similarly there have been calls about square footage, and what counts and what does not for valuation purposes. See this Bulletin article for details on the difference between NCREC Residential Square Footage Guidelines vs. ANSI Standard to help answer this question.
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 June 14th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.