BEECH MOUNTAIN VACATION RENTALS, INC (BEECH MOUNTAIN) – The Commission accepted the permanent voluntary surrender of the firm license of Beech Mountain Vacation Rentals, Inc., effective April 20, 2022. The Commission dismissed without prejudice allegations that Beech Mountain Vacation Rentals, Inc. violated provisions of the Real Estate License Law and Commission rules. Beech Mountain Vacation Rentals, Inc. neither admitted nor denied misconduct.
MARGARET ANNE DUNN (CHARLOTTE) – By Consent, the Commission reprimanded the broker license of Ms. Dunn, effective April 1, 2022. The Commission found that in June 2019, Ms. Dunn acted as a buyer agent for a client who purchased a residential property that included a mobile home. Ms. Dunn obtained and reviewed a copy of the septic permit during the due diligence period but failed to notice or discuss with her buyer-client that the septic permit specified three bedrooms while the subject property was listed as having four bedrooms.
JORDAN BLAKE ISRAEL (ARDEN) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Israel, effective April 20, 2022. The Commission dismissed without prejudice allegations that Mr. Israel violated provisions of the Real Estate License Law and Commission rules. Mr. Israel neither admitted nor denied misconduct.
TRISTAN BISHOP PAN (RALEIGH) – By Consent, the Commission revoked the broker license of Mr. Pan effective April 20, 2022. The Commission found that in September, 2020, Mr. Pan was indicted by the United States Attorney, Eastern District of North Carolina, Western Division, in Case No. 5:20-CR-436-1B0(4) on 6 counts involving wire fraud, bank fraud, making false statements to a financial institution, and devising a scheme to defraud and obtain money and property by defrauding a financial institution, the details of which are set forth in the indictment. On or about March 15, 2022, Mr. Pan pled guilty to 1 count of wire fraud in violation of 18 USC § 1343 and the remaining counts were dismissed. Mr. Pan was sentenced to be committed to federal prison for 1-20 months, after which he will be placed on supervised release for 1-3 years on condition, including that he pay restitution, cooperate in the collection of DNA as directed, and forfeit certain assets.
PREMIER TRIAD VENTURES LLC (GREENSBORO) – By Consent, the Commission reprimanded the firm license of Premier Triad Ventures LLC, effective April 20, 2022. The Commission found that from November 2019 through July 2021, the Firm, due to inadequate policy and practice, allowed for entities not properly licensed with the Commission to receive compensation for real estate brokerage activities.
HAMPTON H RUTLEDGE (FAYETTEVILLE) – Following a hearing, the Commission suspended the broker license of Mr. Rutledge for three years effective September 15, 2021. The Commission then stayed the suspension effective March 15, 2022, following Mr. Rutledge’s completion of certain continuing education and postlicensing courses. The Commission found that Mr. Rutledge, as qualifying broker of a firm doing property management, failed to ensure that the firm’s broker-in-charge maintained the firm’s trust accounts and the records pertaining thereto in compliance with Commission rules, and that the firm’s Chief Financial Officer converted trust monies to his own use, leading to a shortage in both the rent and security deposit trust accounts of at least $435,000. The Commission further found that the firm charged a number of landlord-clients an unexplained $250 fee and failed to timely refund the fee after promising to do so.
TOLL BROTHERS REAL ESTATE INC (RALEIGH) – By Consent, the Commission suspended the firm license of Toll Brothers Real Estate for a period of 2 years, effective March 15, 2022. The Commission then stayed the suspension effective March 15, 2022. The Commission found the Firm was involved in selling to five buyers, lots and new construction homes in a subdivision that its affiliate had developed. The lots were located on a street which appeared to be a cul-de-sac and the Firm’s MLS listing directed potential buyers to turn “into the cul-de-sac” to get to the listed lots. In fact, the adjacent parcel had a right-of-way to connect a private drive to the cul-de-sac. In the purchase agreement documents, the Firm and its affiliate expressly encouraged buyers to examine surrounding properties and referred them to the municipal records that included the re-zoning and the right-of-way described above. The buyers, in contracting to purchase, signed documentation noting that they were “aware that some home sites are located near undeveloped property that is adjacent to the Community that could be developed in the future.”
KARINA VISHNYA (HICKORY) – The Commission accepted the voluntary surrender of the broker license of Ms. Vishnya for a period of five years, effective April 20, 2022. The Commission dismissed without prejudice allegations that Ms. Vishnya violated provisions of the Real Estate License Law and Commission rules. Ms. Vishnya neither admitted nor denied misconduct.
Sheryl Graham, Consumer Protection Officer, spoke at the HTR Southern Properties office meeting on April 5.
Janet Thoren, Director of Regulatory Affairs, spoke at the Lantern Realty and Development LLC meeting on April 13.
Bruce Rinne, Information Officer, spoke at the United Real Estate-Queen City meeting on April 26.
Miriam Baer, ExecutiveDirector of NC Real Estate Commission, spoke at the Pointe Realty Group sales meeting on April 27.
Janet Thoren, Director of Regulatory Affairs, spoke at the Outer Banks Association of REALTORS General Membership meeting on April 28.
Are you interested in joining the staff of the North Carolina Real Estate Commission? From time to time, employment opportunities become available. They are posted on the Commission’s website under the “About Us” tab.
We currently have available the following position:
Director of Education and Licensing is currently available at the Commission’s office in Raleigh. A summary of the position and other employment opportunities are available on the Commission’s website. – Application deadline May 12, 2022.
Click here for more information.
The Commission’s auditors visit brokers-in-charge throughout the state to perform spot audits of trust accounts. This case is an example of why brokers-in-charge are now required by Rule A.0110 to take the Basic Trust Account Course within 120 days of assuming responsibility for a trust account (but no more than every three years). In the spot audit of a real estate firm that performed both sales and long term property management, the auditor found multiple areas of concern. Unfortunately, the broker-in-charge had been making mistakes in their trust account recordkeeping for so long that it was impossible to determine exactly how much of the money in the trust account belonged to which owner. Being able to identify exactly whose money is in the bank is a primary reason for the trust accounting rules – A.0116, A.0117, and A.0118.
The Ledger Problem:
The first problem the broker-in-charge had was that the software used for the property management accounting created ledgers where rent was treated like an accounts receivable, meaning that at the beginning of the month the rent populated as being due from the tenant. This is perfectly fine for tenant ledgers and tracking outstanding balances. However, Rule A .0117(c)(4) also requires that property or owner ledgers be maintained, and this firm did not have either. Property or owner ledgers should show the exact amount of money on hand, at any given time, for a particular property or owner. The problem with ledgers that populate an amount due is that, if the tenant does not pay their rent for that month or multiple months, there is a balance on the ledger that is an outstanding amount owed by the tenant when the ledger should indicate the amount of money on hand for the owner.
Sometimes when ledgers do not exist or are unclear, auditors use owner statements as a substitute, which is what we attempted to do on this audit. In this case, many owner statements had negative balances. Negative balance owner statements indicate that the expenses exceeded the income for that particular owner. When more money is spent on a property than the owner has in the trust account, it usually means that another owner/client has just paid those expenses. This is one form of deficit spending.
The Journal Problem:
Deposits and withdrawals on the ledgers and owner statements should be traceable to a journal. A journal is a check register where all deposits and withdrawals in a trust account are recorded. In this case, a journal was maintained but individual entries were not recorded. Instead, one amount was entered for all deposits on one day and another lump sum entry was made for all the withdrawals. There was no way to trace deposits or withdrawals on the journal to the ledgers or to confirm that all the journal entries were being posted.
The Reconciliation Problem:
In addition, there was no way to reconcile to the journal, which meant that the required three-way reconciliations were not being performed. The bank statements were not being reconciled against the journal because there was no way to confirm that the journal was accurate. The journal was not reconciled against the trial balance because no trial balance was maintained.
A trial balance is the sum of all of the ledgers at a set cutoff date, usually the same date as the bank statement. If a property management firm represents fifty owners, then every month the balance of each of those fifty owner ledgers should be totaled. This total should match, exactly, the reconciled bank balance and journal balance. In this case, since there were no owner or property ledgers, a trial balance could not be produced.
The Shortage Problem:
A true trial balance could not be created from the owner statements because of all the negative balances. Using the owner statements, even with the negative balances, it showed that the property management trust account had a significant shortage.
As seen in this case, failure to maintain trust account records properly at any stage in the process can have a domino effect. The auditor found other more minor infractions in addition to the major problems. The firm was given an opportunity to correct the deficiencies but they were unsuccessful in bringing the trust account into compliance and, therefore, received a disciplinary sanction. Trust account problems and shortages do not necessarily stem from theft or evil intent. A shortage can result if the broker-in-charge is not taking the necessary steps to maintain records. If any of the above sounds familiar (or unfamiliar) and you maintain a trust account, then take the trust account course and start to work on fixing your trust account records. It is only a matter of time before an auditor from the Commission will be knocking on your door.
Be sure to renew your license between May 15 and June 30, even if you haven’t completed CE. If you do not renew by June 30, your license will expire.
Following are the most frequently-asked questions regarding license renewal. The answers to all of these questions, as well as step-by-step renewal instructions, are also provided in the Commission’s Renewal Video, which is posted in the Video Library.
When do I renew?
The annual period for renewal of your real estate license begins at midnight on May 15 and continues until 11:59 pm on June 30.
How do I renew?
How much is the renewal fee?
The renewal fee is $45.00. You may pay by Visa, MasterCard, Discover, American Express, or PayPal.
Will I get a receipt?
Yes. A printable confirmation of renewal will appear on your screen when the process is complete.
Will the Commission mail me a new pocket card?
No. A link to download your new digital pocket card will appear on your screen when the process is complete. You may print a copy of the pocket card if you prefer to have a paper copy.
I haven’t completed CE, yet. Can I still renew?
Yes. Be sure to renew your license by June 30, even if you do not complete your continuing education by June 10. If you don’t renew, your license will expire.
Can I pay my renewal fee by check?
No. Per Commission Rule 58A .0503, you must renew online.
Can I call the Commission office and pay by phone?
No. Per Commission Rule 58A .0503, you must renew online.
Can I go to the Commission office and pay in person?
If you come to the Commission office, you may renew and pay online, using a computer in our lobby. No cash or checks will be accepted, even in person.
What will happen if I don’t renew by June 30?
If you do not renew your license online by 11:59 pm on June 30, your license will expire. To reinstate an expired license, you must pay a $90 fee between July 1 and December 31. Failure to reinstate the former license by December 31 will result in your having to submit a new application, including application fee and criminal background report. You will also be required to take additional education and/or pass the state license examination. https://www.ncrec.gov/Licensing/Reinstatement
NOTE: If you are a BIC or BIC Eligible and your license expires or changes to inactive status on July 1, you will automatically lose BIC Eligible status and, in turn, BIC designation (if applicable). If that happens, and you wish to regain BIC Eligible status, you must (1) return the license to active status; (2) meet the experience requirements for BIC designation; (3) take the 12-hour Broker-in-Charge Course before re-designation; and (4) complete and submit the Request for BIC Eligible Status and/or Designation form (REC 2.25). Do NOT take the 12- hour BIC Course before your license is on active status! Refer to Rule 58A. 0110 for detailed instructions regarding regaining BIC Eligible status and BIC designation.
Questions about the renewal process?
Email us at LS@ncrec.gov or call us at 919.875.3700.
To lawfully engage in brokerage activity and receive any income for brokerage, an individual must have a CURRENT real estate broker license on ACTIVE status at the time they provide brokerage services.
A broker who timely renews their license during May 15-June 30 has a current license for the subsequent year. All licenses expire on June 30 each year unless they are renewed by that date.
What is an “active” license?
Key Points: Active License Status
Key Points: Inactive License Status
Are BICs responsible for ensuring their affiliated brokers have an active, current license?
Yes. Commission Rule 58A .0110 requires designated BICs to assure that each affiliated broker has a current, active license to engage in brokerage activities. In order to appropriately supervise affiliated brokers and adhere to Commission rules, a BIC should use the Broker-in-Charge Login to examine the license record of all affiliated brokers and remind them of their obligation to renew their license and complete continuing education each year.
How does a broker reactivate an inactive license?
Pursuant to 58A .1703, the requirements for reactivating an inactive license depend upon the length of inactivity AND whether or not the broker has a continuing education deficiency. The reactivation requirements are as follows:
Can a broker practice brokerage after reactivating their license?
Although a broker may have completed the required steps to reactivate an inactive license, they may not engage in brokerage activity without first submitting the License Activation and Broker Affiliation form (REC 2.08) to notify the Commission of the broker’s desire for ACTIVE status and of the office with which they will be affiliated and doing business.
REMEMBER: A broker may use the Licensee Login to analyze their license record and determine if they have completed their continuing education. A BIC may also review the license record of affiliated brokers by logging into their Broker-in-Charge Login. Do you have additional questions about ACTIVE versus INACTIVE license status? Contact the Education and Licensing Division at LS@ncrec.gov or 919.875.3700, x772.
The North Carolina Real Estate Commission was excited to welcome real estate instructors and various education providers to its 2022 Spring Educators Conference on Tuesday, March 29, 2022. This year’s event was conducted via Zoom technology, and highlighted the theme, Wizard of Oz.
The registration for this virtual conference was limited to 150 participants. However, the entire day’s presentations were recorded and will be available for viewing in early April. Thus, even those who could not attend the live virtual event will benefit from the information shared.
Wendell Bullard, Commission Chair, opened the conference at 8:30 with a welcome to all the attendees. After the welcome, the day-long event featured the following presentations by Commission staff members.
The conference culminated with the presentation of the 2022 Larry A. Outlaw Excellence in Education Award to Dana Rhodes by Commission Chair Bullard. The Commission established the Larry A. Outlaw Excellence in Education Award in 2016 to honor the Commission’s late former Director of the Education and Licensing Division. As this year’s recipient of the Larry Outlaw award, Mr. Rhodes demonstrated ongoing excellence in outstanding contributions to real estate education in North Carolina.
The conference concluded with a final wrap-up/Q&A session moderated by Ms. Hamlin. The Commission thanks North Carolina’s real estate education community for its continued interest and support, and congratulates Mr. Rhodes on his award.