Charlie Moody serves as Legal Counsel and Assistant Director of the Regulatory Affairs Division. A native of New York, New York, Charlie graduated from Duke University with a degree in Public Policy. She then attended the UNC-Chapel Hill School of Law, receiving her J.D. degree in 1998.
Following graduation from law school, Charlie entered private practice in Atlanta where she specialized in general business litigation. Charlie then returned to North Carolina in 2003, and in February 2006, joined the Commission’s legal staff. Charlie’s duties at the Commission include the prosecution and settlement of disciplinary cases, participation in NC Association of REALTORS® and NC Bar Association Forms Committees, and oversight of the time share registration program.
Charlie has three human children: a college senior, a college freshman, and a high school freshman. She also has three non-human children who include an elderly sheltie, a teen standard poodle and a cranky black cat.
ALI KHALESEH DEHGHAN (Eastern NC) – By Consent, the Commission suspended the broker license of Mr. Dehghan for a period of 2 years effective February 12, 2020. The Commission then stayed the suspension adding that the stayed suspension shall be terminated at such time as Mr. Dehghan is no longer on supervised probation. The Commission found that in December 2018, Mr. Dehghan was indicted in the US District Court, Eastern Division of NC, for knowingly possessing a firearm in violation of 18 UC 922(g)(5)(A) and 924. Mr. Dehghan pleaded guilty and was ordered to serve 6 months in prison, given credit for time served, and placed on supervised probation for 3 years.
PAUL EMANUEL JONES (Wilmington) – By Consent, the Commission reprimanded Mr. Jones effective February 12, 2020. The Commission found that in June 2019, Mr. Jones while attending a GENUP course, was disruptive to the point of being removed from the class.
KIMBERLY ANNE SARNO (Carthage) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Sarno effective February 12, 2020. The Commission dismissed without prejudice allegations that Ms. Sarno violated provisions of the Real Estate License Law and Commission rules. Ms. Sarno neither admitted nor denied misconduct.
WILLIAM B CHALK JR. (Morehead City) – By Consent, the Commission reprimanded Mr. Chalk Jr. effective March 10, 2020. The Commission found that Mr. Chalk served as the broker-in-charge for a firm and that on or about December 2017, a Property Management Agreement was executed by the owner of the residential property, and an unlicensed employee, who handled all aspects of the management of the subject property, despite not being licensed. The firm deducted repair expenses from the owner’s proceeds, despite the lease requiring the tenant to be responsible for those repairs. The Lease Addendum, created by the unlicensed employee, required the tenant to make extensive repairs to the subject property in exchange for a reduced monthly rental payment.
CHALK & GIBBS INC. (Morehead City) – By Consent, the Commission reprimanded Chalk & Gibbs Inc. effective March 10, 2020. The Commission found that on or about December 2017, a Property Management Agreement was executed by the owner of the residential property, and an unlicensed employee, who handled all aspects of the management of the subject property, despite not being licensed. The firm deducted repair expenses from the owner’s proceeds, despite the lease requiring the tenant to be responsible for those repairs. The Lease Addendum, created by the unlicensed employee, required the tenant to make extensive repairs to the subject property in exchange for a reduced monthly rental payment.
Q MAXWELL ERNEST GILLAND (Charlotte) – By Consent, the Commission reprimanded the broker license of Mr. Gilland effective February 1, 2020. The Commission found that in 2017, Mr. Gilland, a provisional broker, referred a seller-client to his firm after learning confidential information about the seller-client. Subsequently, Mr. Gilland represented a buyer-client in a transaction with the firm’s seller-client. Mr. Gilland promised his buyer-client $5,000 to help the transaction close and issued a check for $5,000, but stopped payment on the check and failed to ever pay his buyer-client.
STACY SECHREST PRANGER (High Point) – By Consent, the Commission reprimanded Ms. Pranger effective February 10, 2020 on certain conditions. The Commission found that Ms. Pranger, a broker-in-charge, failed to maintain her firm’s trust account records in compliance with Commission rules including failure to perform reconciliations, failure to do trial balances, failure to include required information on checks and deposits, and failure to accurately input expenses and deposits. Ms. Pranger also charged for services when fees were not clearly listed in the property management agreement. The Commission notes that Ms. Pranger and her firm are now in substantial compliance with Commission rules.
GATE CITY PROPERTY MANAGEMENT LLC (High Point) – By Consent, the Commission reprimanded Gate City Property Management LLC effective February 10, 2020, on certain conditions. The Commission found that the firm failed to maintain its trust account records in compliance with Commission rules including failure to perform reconciliations, failure to do trial balances, failure to include required information on checks and deposits, and failure to accurately input expenses and deposits. The firm also charged for services when fees were not clearly listed in the property management agreement. The Commission notes that the firm is now in substantial compliance with Commission rules.
GREGORY A FAULCON (Charlotte) – By Consent, the Commission reprimanded Mr. Faulcon effective April 1, 2020. The Commission found that in April 2018, Mr. Faulcon listed a HUD foreclosure property and represented the property in the MLS as a three-bedroom mobile home. Mr. Faulcon did not obtain or review a copy of the septic permit, which indicated that the septic system was designed for two bedrooms. A buyer purchased the property with the understanding that it was a three-bedroom mobile home. Mr. Faulcon has since paid the buyer the cost to upgrade to a three bedroom system.
FAULCON & ASSOCIATES REAL ESTATE LLC (Charlotte) – By Consent, the Commission reprimanded Faulcon & Associates Real Estate LLC effective April 1, 2020. The Commission found that in April 2018, Faulcon & Associates Real Estate LLC listed a HUD foreclosure property and represented the property in the MLS as a three-bedroom mobile home. The firm did not obtain or review a copy of the septic permit, which indicated that the septic system was designed for two bedrooms. A buyer purchased the property with the understanding that it was a three-bedroom mobile home. The buyer later discovered the misrepresentation when selling the property when his listing agent obtained the septic permit as part of the listing process. The firm has since paid the buyer the cost to upgrade to a three bedroom system.
Melissa Vuotto has been named Paralegal Supervisor in the Regulatory Affairs Division.
A Regulatory Affairs Case Study
By Danielle M. Alston, Consumer Protection Auditor
The complaining witness in this case was a seller whose home was listed by an agent. The Respondents were a provisional broker acting as a buyer agent and her Broker-in-Charge (BIC).
The Buyer Agent scheduled a showing of the subject property and the Seller approved it. Shortly after the showing, the Seller contacted the Buyer Agent very upset, alleging that the buyers had taken some prescription medications that were “well hidden” in the Seller’s master bathroom.
During the investigation, the Buyer Agent stated she was contacted by a woman through social media expressing her interest in seeing the property with her husband. The Buyer Agent stated that she met the couple at the property as opposed to her normal practice of meeting prospective buyers at her office or a public place prior to showing the home. She explained that the opportunity of getting a badly-needed client outweighed her usual, more cautious approach. Upon arriving at the property, the Buyer Agent said she reviewed the “Working With Real Estate Agents” brochure with the couple, who stated that they would sign it after the showing was complete. The Buyer Agent did not check the buyers IDs or even get their names.
When she was showing the first-floor master bedroom, the buyer-wife indicated that she needed to use the bathroom. The Buyer Agent planned to wait for the wife to exit the bathroom, but the husband began walking out of the master bedroom while asking questions, so the Buyer Agent followed him to answer his questions. The husband inquired about the upstairs, so the Buyer Agent showed the upstairs to him while his wife was still in the bathroom. By the time the Buyer Agent came back downstairs with the husband, the wife was in the kitchen and the Buyer Agent heard a cabinet door close. The Buyer Agent indicated that she was not concerned as buyers typically inspect cabinets.
The Buyer Agent indicated that she attempted to ask the couple several follow-up questions as they began to leave. The wife wrote down a contact number at the request of the Respondent Broker and then left without signing the “Working With Real Estate Agents” disclosure. The contact number allegedly provided by the buyers was not a valid number.
Later, the Seller called the police and reported the theft of her prescription medication. An officer explained to the Seller that this was a somewhat common scam for two people to pose as interested buyers in order to steal things from a home. The officer also contacted the Buyer Agent that night for her version of the incident.
The evidence in this case tended to show that the unidentified potential buyers were responsible for the Seller’s missing medications. However, the Commission cautioned that Buyer Agent about her conduct, including her failure to identify the prospective buyers before taking them into the Seller’s home.
A few months later, the Buyer Agent changed firms and the Commission subsequently received a call from the Buyer Agent’s new BIC, who explained that she was notified that the Buyer Agent had recently tested positive for opioids. The Commission staff began a new investigation to obtain more information.
The Buyer Agent’s new BIC provided a list of the Buyer Agent’s showings to the Commission staff. Commission staff also received a call from a family member of the Buyer Agent, who explained that the Buyer Agent had been in a medically-assisted drug treatment program for almost two years and that the Buyer Agent had recently tested positive for drugs not prescribed through the treatment program. The family member provided photos of prescription bottles for other individuals found in the Buyer Agent’s home. The Commission also received a video in which the Buyer Agent admitted that she scheduled and conducted false showings to gain access to listed homes in order to steal prescription drugs for her own use. Following the conclusion of the investigation, the Buyer Agent entered into a Consent Order with the Commission in which she voluntarily agreed to surrender her broker license.
This case illustrates the importance of listing agents advising their seller-clients to remove or lock up all prescription medications, cash, jewelry, collections, firearms, and other valuables that can be taken during showings. Sellers who wish to use interior cameras for detection and deterrence of theft should be advised that they cannot use cameras with audio and cannot place a camera in any room/area in which there is a reasonable expectation of privacy, such as a bathroom.
A Regulatory Affairs Case Study
By Rob Patchett
As fiduciaries, brokers are required to place their clients’ interests above their own interests. This also means that brokers are prohibited from engaging in self-dealing. In one case, a broker went to great lengths to attempt to purchase a condominium from her client at well below market value.
Respondent Broker was the qualifying broker and broker-in-charge of her solo firm. Her husband’s lease on a condominium was approaching its termination and the owner contacted Respondent Broker and her husband to see if they would purchase the condo at the end of the tenancy. Respondent Broker and her husband decided not to purchase the condominium, but Respondent Broker offered to list the condo for the owner. Respondent Broker represented to the owner-seller she knew investors who were interested in purchasing a condominium. The owner-seller and Respondent Broker executed a six-month exclusive listing agreement with a 5% commission at a list price of $226,000.
After several weeks, Respondent Broker informed her seller-client that the potential investors were not interested in making an offer on the condominium, but her husband had renewed interest in purchasing the condominium. The seller-client spoke directly to Respondent Broker’s husband who offered $215,000 to purchase the condominium; the seller rejected his offer. At this time, Respondent Broker had never publically advertised the condominium for sale.
Suspicious, the seller spoke to another broker about the sale of his condominium. This broker was shocked to hear the list price was so low. He informed the seller that his condominium should be listed between $250,000 and $270,000 based upon recent sales. After learning this information, the seller-client emailed Respondent Broker asking to terminate the listing agreement. The broker refused to terminate the agreement.
A few weeks later, Respondent Broker emailed her seller-client a letter purportedly from Respondent Broker’s attorney. The letter demanded the seller-client accept the husband’s offer because it was a “full-price” offer. The seller-client was given two options for accepting the offer. He could sell the condominium to the husband for $215,000 and not pay Respondent Broker a commission or sell the condominium for $226,000 and pay a 5% commission. The letter was unsigned and contained several factual and typographical errors. During the course of the Commission’s investigation, the Commission’s Consumer Protection Officer confirmed that the attorney did not draft, sign, or send the letter to the seller. Evidence tends to indicate that either Respondent Broker or her husband drafted the letter purporting to be an attorney.
The seller-client rejected all of the husband’s offers. Respondent Broker then demanded her seller-client pay her commission for bringing a “ready, willing, and able buyer” that he rejected. The seller-client declined to pay Respondent Broker’s commission. Several months later, the seller-client sold his condominium for $269,000.
In this case, Respondent Broker’s only concern was for her personal gain. She attempted to buy her client’s condominium below market value by misrepresenting the fair market value to her client. She also attempted to force her seller-client into selling by sending a fictitious attorney demand letter. Finally, she attempted to collect a commission by claiming she brought a legitimate “ready, willing, and able buyer” to her seller-client. Following the investigation, the broker surrendered her license and that of her firm.
Brokers owe fiduciary duties to their clients. These fiduciary duties prohibit brokers from self-dealing. Commission rule 58A .0104(p) specifically requires listing brokers to disclose in writing conflicts of interest, transfer or terminate listing agreements, and notify the seller-client that they may terminate the listing agreement prior to entering into a contract for a property that the listing broker or firm is listing. Furthermore, North Carolina General Statute 93A-6(a)(8) and (10) gives the Commission authority to discipline brokers who are unworthy or incompetent to act as real estate brokers in a manner as to endanger the interest of the public and for conduct which constitutes improper, fraudulent, or dishonest dealing, respectively.
This article from the February eBulletin is republished here to remind brokers of the new Postlicensing Education requirement effective July 1, 2020.
Beginning July 1, 2020, Rule 58A .1902 will require a Provisional Broker to complete all three 30-hour Postlicensing courses within 18 months of initial licensure in order to maintain active license status.
If you were licensed anytime during 2018, you must complete all your Postlicensing courses by July 1, 2020. If you have been licensed in 2019, you will have at least 18 months from your date of licensure to complete the courses.
Example #1: Licensed on February 1, 2018
Example #2: Licensed on March 17, 2019
Additional information about this important change is provided in the General Update (GENUP) and Broker-in-Charge (BICUP) courses throughout the year. Also, if you are a provisional broker, be on the lookout for email communications from the Commission about the changing education deadlines.
If you have further questions regarding this rule change, please contact the Education and Licensing Division at 919.875.3700.
Have you created an LLC, corporation, partnership, or other type of business entity for your brokerage business or compensation? If so, you need to apply for a firm license.
To complete a firm license application, you must:
*Commission Rule 58A .0502 dictates that a firm must have one principal who holds a broker license on active status in good standing; that broker must serve as the qualifying broker (QB). The QB is responsible for:
To apply for a firm license, go to www.ncrec.gov and click on Apply for a Firm License.
If you have further questions about the firm licensing process, contact the Education and Licensing Division at 919.875.3700.