Pending Cases: The Commission entered into consent agreements to suspend 6 licenses, accepted the voluntary surrender of 2 licenses, continued hearings to a later date for a case involving 1 licensee, closed cases without action against 1 licensee, left cases pending involving 6 licenses, revoked 2 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 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: 9; total approved: 8.
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.
Rule 21 NCAC 58A .0114: The Commission thanked licensees and the public for their interest in the Commission’s rulemaking and their comments on the proposed rules. Staff reviewed the recommendations on Rule 21 NCAC 58A .0114, which if adopted would be effective July 1. The Commission then voted to adopt the changes as presented.
Draft Residential Property and Owners’ Association Disclosure Statement: Staff reviewed a draft revision of the Residential Property and Owners’ Association Disclosure Statement (RPOADS), noting that the form is divided into categories to clarify disclosure topics for the seller and the buyer. After review, the Commission voted to publish the draft RPOADS with the following revisions:
LaRose v. NCREC: 23 REC 00687: The Director of the North Carolina Real Estate Commission reported that the case, LaRose v. NCREC; 23 REC 00687, was dismissed by the Office of Administrative Hearings based upon lack of subject matter jurisdiction as well as other substantive grounds.
Renewals: The Director of Education & Licensing reported that licensees must renew by June 30, 2023 in order to maintain a license. They also reported on the comprehensive planning for renewals, including advance electronic notices and reminders in the Commission’s social media and the Bulletin. On the first day of renewals, License Services renewed 11,929 brokers, and 2,086 firm licenses, while taking 1,116 phone calls. By the second day, 19,202 brokers renewed along with 3,346 firms. A total of 17% of brokers have been renewed and 20% of firms. Commission member Chandler asked that staff revisit the possibility through rulemaking that an Education Provider would not be required to renew when they do not offer classes directly to students but still want to control their course content.
May 3 Education Town Hall: The Director of Education & Licensing reported on the May 3 Education Town Hall noting that 65 educators attended. There were questions about renewals, Prelicensing, Postlicensing, and CE approval. The next Town Hall is on August 7, 2023.
2023-2025 North Carolina Real Estate Manual: Staff presented the Commission members with the newest addition of the North Carolina Real Estate Manual. They thanked the Commission Chair Mel Black for his contribution on chapter five.
Report on License Numbers: As of May 1, 2023, there are 128,798 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, June 14, 2023, in the Commission’s office in Raleigh and is open to the public. It also can be viewed via Zoom online video.
Renewal is Open
The renewal portal for real estate licenses is now open at NCREC. All broker, firm and LNCL licenses must be renewed no later than 11:59 PM on June 30th. On the home page of the Commission’s website, choose the Licensing tab and scroll down to Licensee Login or Firm Login to renew. Once you have logged in, click the link “Renew Your License” and follow the instructions.
Cemetery and Grave Disclosures
Consumers and brokers have contacted NCREC with questions about required disclosures concerning graves on properties. Graves on private property, including graves with only urns, may have an easement so that future family descendants can visit them. There are rights that family members may have to enter the property to visit the gravesite, with or without the consent of the property owner. Graves should be on a survey and marked by GIS in the county. Graves can be removed, but it is a difficult process and county ordinances must be followed. For these reasons, graves are a material fact that an NC broker should discover and disclose to any interested party to the transaction. View North Carolina GS Chapter 65 for more information on NC laws regarding cemeteries.
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 May 17th here at the Commission building. A Zoom link will be available at ncrec.gov on the day of the meeting.
Pending Cases: The Commission entered into consent agreements to suspend 11 licenses, accepted the voluntary surrender of 3 licenses, voted to extend to a later date cases involving 2 licenses, closed cases without action against 9 licensees, left cases pending involving 9 licenses, revoked 1 license, and ordered hearings in cases involving 21 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: 10; 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 | |||
March 2023 | April 2022 through March 2023 | March 2023 | April 2022 through March 2023 | |
# Tested | 598 | 5955 | 15 | 242 |
% Pass both sections | 51% | 49% | N/A | N/A |
% Pass National section | 79% | 78% | N/A | N/A |
% Pass State section | 60% | 55% | 20% | 40% |
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.
Annual Rulemaking: Staffed reviewed the recommendations on proposed rules, which if adopted would be effective July 1, 2023. See the Commission’s homepage for more information about proposed rulemaking.
BIC Focus Groups: The Director of Regulatory Affairs reviewed a 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.
Educators Conference: The Director of Education & Licensing provided a report on the March 21 Spring Educators Conference noting that 335 people attended the conference. Stephanie Walker was awarded the 2023 Larry A. Outlaw Excellence in Education Award. The total conference cost is $6,121.74 against a budget of $36,000.00.
License Exam Statistics: The Director of Education & Licensing provided a report on the third-quarter license exam statistics noting that the monthly pass rate in March was 69%, pulling the yearly average pass rate up to 63%. Only eight instructors are currently performing under the 40% pass-rate threshold.
Real Estate Manual: The Director of Education & Licensing reported that Staff completed the 2023 edition of the Real Estate Manual, which is being printed and set for release in six weeks. The Director of Education & Licensing noted that there are some issues with the online manual, including that page numbers cannot be added to the book. Staff is researching options to improve the online delivery platform, including alternate providers.
Report on License Numbers: As of April 1, 2023, there are 127,978 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, May 17, 2023, in the Commission’s office in Raleigh and is open to the public. It also can be viewed via Zoom online video.
Interested in obtaining a real estate license?
Take a look at the syllabus for the Broker Prelicensing Course that is posted on our website. It is the basis for all NC Prelicensing courses and has recently been updated to reflect current laws, rules, and forms. Available education providers and course schedules are searchable under the Education tab on our website.
Solar Panel Loan Assumption
There have been several questions about solar panels in recent consumer calls. It is important to note that solar panels are typically attached to the property in a permanent manner and are generally considered to be a fixture that will remain with the home. If the parties use the standard residential contract form, it states: “ALL EXISTING FIXTURES ARE INCLUDED IN THE SALE AS PART OF THE PURCHASE PRICE, FREE OF LIENS, UNLESS EXCLUDED IN SUBPARAGRAPHS (d) OR (e)”. This means that if there is an existing lien on the solar panels, the seller should pay it off prior to or at the sale of the home, unless the parties agree otherwise in their contract. If a seller requires, as a condition of the sale, for the buyer to assume the seller’s responsibility for a solar panel lien, this is a material fact that should be disclosed to the buyer prior to their making an offer, including the lien amount they are to assume.
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 tomorrow is in Edenton at the Historic 1767 Chowan County Courthouse. A Zoom link will be available at ncrec.gov in the morning.
Educators Conference Review
The 2023 Spring Educators Conference – NCREC Trek, was held last month before a sold out crowd of over 300 instructors. Thank you to all who attended, for dedicating yourself to learning, improving and increasing the success of your students. Educators learned about licensing and education stats, benefits of course audits and SMART learning objectives, optimizing zoom waiting rooms and gamification through Flippity, the importance of following the syllabus and how to engage the unengaged. Congratulations to Stephanie Walker, this year’s recipient of the Larry A. Outlaw Excellence in Education Award. If you were unable to attend and need education credit, there is a brand new instructor development workshop (IDW) being released this month. Visit the Education tab on our website for more details. If you are a licensed instructor and have education questions or concerns, join us at our next Educators Town Hall Meeting 5/3/23 at 3pm.
Rental Fraud Concerns
Similar to our recent warnings about increases in wire fraud, seller fraud and deed fraud, consumers and brokers should also be aware of rental scams. Many rental fraud scams take place online or through social media targeting would-be renters, asking them to send money upfront for deposits before even viewing the property, and then disappearing once the money has been sent. View this recent consumer article on our website to learn how to spot red flags and avoid becoming a victim. If you are already a victim of a rental fraud scam you should contact the Attorney General’s office to report the scam, as well as local law enforcement.
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 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.
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.