Weston’s Law Revised

In July 2021, 7-year old Weston Androw of Canton, Ohio became trapped between an elevator car and elevator shaft in the vacation home his family rented on North Carolina’s Outer Banks. EMS workers were able to free Weston from the elevator but were not successful in resuscitating the young boy. Weston’s tragic death spurred action by lawmakers to enact a new law regarding safety requirements for elevators in short-term rental properties. On July 8, 2022, Governor Cooper signed House Bill 619, also known as Weston’s law, which is designed to prevent future injuries and deaths resulting from gaps in certain residential elevators.

The law applies to elevators in private residences, cottages or similar accommodations that are rented for 15 or more calendar days per year. Similar to the North Carolina Elevator Safety Act, the law defines an elevator as any hoisting and lowering mechanism, with a car or platform, which moves in guides and serves two or more floors of a building or structure.

Weston’s Law allows for a maximum gap of 4 inches between the hoistway face of the landing door and the car door of an elevator. Additionally, the law mandates minimum force requirements for elevator doors and gates. All elevator designs must be able to withstand 75 pounds of applied force. When this amount of force is applied, the doors and gates must not deflect (bend or curve) more than ¾ of an inch, become permanently deformed, or be displaced from the guide or tracks.

If elevator doors or gates do not currently comply with the aforementioned safety requirements, the landlord of the rental property cannot allow for the elevator to be operated until the safety conditions are met. 

If the gap between the car door and landing door is greater than 4 inches, then the landlord must install a permanent door space guard or door baffle of at least 31.75 inches in height. This addition must be able to withstand 75 pounds of force applied horizontally using a 4-inch diameter sphere.  

Once the landlord installs a door, door space guard, door baffle or gate in compliance with these safety requirements, the landlord must provide the Commissioner of Insurance with either a statement signed by a professional elevator installer certifying installation or a receipt for purchase of the item that was installed, a statement signed by the landlord stating the date of installation, and photographs which depict the door, door space guard, door baffle or gate that was installed pursuant to the law.

Weston’s Law went into effect October 1, 2022. Property managers should advise their landlord-clients to implement measures that comply with the safety requirements. Any person who violates the landlord’s attempt to prevent use of an elevator until it meets these requirements may be charged with a Class 2 misdemeanor criminal offense. Property managers handling short-term rentals should take reasonable steps to ensure that any elevators comply with the new law and refrain from representing any landlord who has failed to comply but is continuing to allow the elevator to be used.

Diversity, Equity, and Inclusion Updates

Social justice, biases (often times implicit), and discrimination have been hot topics throughout the real estate market over the last few years. As the North Carolina Real Estate Commission works to bring awareness and enhance the principles of diversity, equity, and inclusion in real estate brokerage it requires all hands on deck.

The Commission is open to, and welcomes, all feedback on new DEI initiatives and ways to successfully implement them. Additionally, if you have witnessed or been subjected to racism or discriminatory behavior in any real estate related activities it is important that you provide this information to the Commission. To provide feedback or information on your experiences with racism or discrimination in real estate related activities contact the Commission’s DEI Officer here.

The January 2023 Commission meeting will be in Wilmington!

The North Carolina Real Estate Commission is pleased to announce that it will be holding its January 18-19, 2023, business meeting and hearings in Wilmington, North Carolina. You are cordially invited to join the Commission members for coffee on Wednesday, January 18^th at 8:30, before the meeting begins, and to stay or attend the meeting at any time throughout the day. The business meeting is expected to begin Wednesday at 9:00 and to last until mid-afternoon.

The meeting will be held at:

EMBASSY SUITES WILMINGTON RIVERFRONT – SALON I

9 ESTELL LEE PLACE, WILMINGTON

The Commission members welcome the opportunity to meet you and hear your thoughts. While not required, we will appreciate your RSVP by January 11^th to exec@ncrec.gov for planning purposes. We look forward to seeing you in Wilmington!

Staff Appearances

Fred Moreno, Chief Deputy Legal Counsel, spoke at the North Carolina Vacation Rental Managers Association meeting on December 6.

Nick Smith, Auditor/Investigator, spoke at the LOTSAR meeting on December 8.

Disciplinary Actions

PAUL DAVID TILLEY (HERTFORD) – Following a hearing, the Commission permanently revoked the broker license of Tilley effective November 9, 2022.  The Commission found that Tilley failed to provide and review the Working with Real Estate Agents Disclosure with prospective buyers and sellers, failed to enter into written listing agreements before providing brokerage services, and forged client signatures on an agency disclosure, on agency agreements, and on agency termination agreements. The Commission further found that Tilley failed to provide the broker-in-charge with whom Tilley was affiliated with copies of written agency agreements and agency disclosures and that Tilley failed to report a criminal conviction within 60 days of judgment.

CONNIE B BYRD (RAEFORD) – By Consent, the Commission suspended the broker license of Byrd for a period of 12 months, effective December 10, 2022. The Commission then stayed the suspension in its entirety. The Commission found that Byrd acted as a property manager and maintained a rent trust account and a security deposit trust account. Byrd improperly commingled funds, maintained no records beyond the bank statements themselves and had excess overages in each account. Byrd allowed her property management firm license to expire. Byrd affiliated with a new firm and broker-in-charge but could not provide transaction documents related to property management in the new firm name.  

TIFFANY MARIE BALANDA (Fayetteville) – By Consent, the Commission reprimanded Balanda, effective December 15, 2022. The Commission found that prior to licensure, Balanda participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

TIFFANY KATHRYN BOYD (Clayton) – By Consent, the Commission reprimanded Boyd, effective December 15, 2022. The Commission found that prior to licensure, Boyd participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

ELIZABETH GROGAN (Granite Falls) – By Consent, the Commission reprimanded Grogan, effective December 15, 2022. The Commission found that prior to licensure, Grogan participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

DESERAE NICHOLE HARRIS (Moyock) – By Consent, the Commission reprimanded Harris, effective December 15, 2022. The Commission found that prior to licensure, Harris participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

LAKEISHA GAIL MILLER (Jacksonville) – By Consent, the Commission reprimanded Miller, effective December 15, 2022. The Commission found that prior to licensure, Miller participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

EMMA NICHOLS (Mount Airy) – By Consent, the Commission reprimanded Nichols, effective December 15, 2022. The Commission found that prior to licensure, Nichols participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

VICTORIA GREEN SMITH (Fayetteville) – By Consent, the Commission reprimanded Smith, effective December 15, 2022. The Commission found that prior to licensure, Smith participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

ALEXIS MARGARET SYPNIEWSKI (Jacksonville) – By Consent, the Commission reprimanded Sypniewski, effective December 15, 2022. The Commission found that prior to licensure, Sypniewski participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

ERIN DENISE ULRICH (Rolesville) – By Consent, the Commission reprimanded Ulrich, effective December 15, 2022. The Commission found that prior to licensure, Ulrich participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

ANNA PATRICK WOMACK (Linden) – By Consent, the Commission reprimanded Womack, effective December 15, 2022. The Commission found that prior to licensure, Womack participated in a social media exam study group that actively shared confidential exam information or encouraged others to gather exam information.

TURNKEY VACATION RENTALS INC (ASHEVILLE) – By Consent, the Commission permanently revoked the license of Turnkey Vacation Rentals Inc. effective December 15, 2022. The Commission found that Turnkey Vacation Rentals Inc. managed a vacation rental property where the tenant cancelled due to a Stay at Home order issued during the Covid-19 Pandemic. Turnkey Vacation Rentals Inc. failed to issue a refund to the tenant despite re-renting the subject property after her cancellation. A review of Turnkey Vacation Rentals Inc’s lease agreements found that they failed to comply with all provisions of the NC Vacation Rental Act. A review of Turnkey Vacation Rentals Inc’s management agreements found that they lacked a definite termination date as well as the required anti-discrimination provision. Turnkey Vacation Rentals Inc. could not provide Commission staff with accounting records sufficient to perform an audit of its trust accounts as these monies are controlled by the out-of-state parent company employees and involve accounts from multiple states.

WILLIAM NATHANIEL THOMPSON (ASHEVILLE) – By Consent, the Commission suspended the broker license of Thompson for a period of 18 months, effective December 15, 2022. The Commission then stayed the suspension in its entirety and prohibited Thompson from acting as a broker-in-charge for a period of three years. The Commission found that Thompson acted as the broker-in-charge of a Firm, whose policy disallowed refunds to tenants who cancelled after a specified period, even if new tenants for the subject property were found for the same rental period. A review of Firm’s lease agreements found that they failed to comply with all provisions of the NC Vacation Rental Act. A review of Firm’s management agreements found that they lacked a definite termination date as well as the required anti-discrimination provision. Thompson could not provide Commission staff with accounting records sufficient to perform an audit of Firm’s trust accounts as these monies are controlled by the out-of-state parent company employees and involve accounts from multiple states.

RALPH JOSEPH TORTORA (WAKE FOREST) – By Consent, the Commission suspended the broker license of Tortora for a period of 9 months, effective December 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found that in June 2021, Tortora, acting as listing agent for a property, advertised in MLS that a roof was 11+ years old and mistakenly checked a drop down data entry box indicating the roof had a 30-year warranty. A buyer offered to purchase the property as-is with no repairs and no due diligence period. In fact, the seller had not disclosed and Tortora did not confirm a roof warranty, and the buyer’s home inspection noted hail damage and needed roof repairs. The buyer was informed of the error and requested the seller make a claim on their home insurance which the seller declined. The buyer proceeded with the purchase.

DAVID H WEYBRIGHT (Nags Head) – By Consent, the Commission suspended the broker license of Weybright for a period of 12 months, effective December 6, 2022. The Commission then stayed the suspension in its entirety. The Commission found from a random audit that Weybright, acting as the broker-in-charge of a Firm, maintained two separate trust accounts whose monies were being “netted” and treated as one entire account, causing accounting issues. Furthermore, bank accounts were being reconciled to the property ledger trial balance rather than to the journal and deposit tickets lacked the information necessary to provide a clear audit trail. Numerous property ledgers noted deficit spending, disbursement records failed to identify the property or owner to whom it related, and a shortage was discovered. No clients or members of the public were negatively impacted, however, and Weybright has now corrected his accounting systems and practices. The trust accounts are now fully funded and in compliance with Commission rules.

KEES HOSPITALITY SERVICES LLC (Nags Head) – By Consent, the Commission suspended the broker license of Keys Hospitality Services LLC for a period of 12 months, effective December 6, 2022. The Commission then stayed the suspension in its entirety. The Commission found from a random audit of Kees Hospitality Services, LLC’s trust accounts that there were two separate trust accounts whose monies were being “netted” and treated as one entire account, causing accounting issues. Furthermore, bank accounts were being reconciled to the property ledger trial balance rather than to the journal and deposit tickets lacked the information necessary to provide a clear audit trail. Numerous property ledgers noted deficit spending, disbursement records failed to identify the property or owner to whom it relates, and a shortage was discovered. No clients or members of the public were negatively impacted, however, and Kees Hospitality Services, LLC has now corrected its accounting systems and practices. The trust accounts are now fully funded and in compliance with Commission rules.

KIMBERLY R SMITH (Charlotte) – By Consent, the Commission suspended the broker license of Goodwin for a period of 1 month, effective November 1, 2022. The Commission found that in June 2021, Smith acted as a listing agent for a property in Charlotte. Smith advertised the property in MLS as having “New HVAC” when, in fact, the HVAC was 18 years old and had only been refurbished. Smith failed to discover and accurately disclose this fact but instead relied on the seller’s statement. The buyers discovered the actual age at walk through and closed with a $3,000 credit.

LINDA HAMILTON HARDIN (GREENSBORO) – By Consent, the Commission reprimanded Hardin, effective September 30, 2022. The Commission found that in October 2021, Hardin acted as listing agent for a subject property. In the MLS, Hardin advertised that several appliances would convey with the property and the dishwasher, range, refrigerator, and water heater were “new.”  Hardin did not verify the age of the appliances or the water heater. The actual ages for the appliances and water heater were between 5-8 years old.

BOXWELL INC. (Fayetteville) – By Consent, the Commission suspended the broker license of Boxwell Inc. for a period of 18 months, effective December 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found that when it listed a property for sale, the Firm became aware of issues with the subject property’s roof after a buyer terminated due to discovering these issues during their home inspection. Boxwell Inc. then re-listed the subject property and failed to disclose the roof issues to the second buyer at the time their offer was made. Boxwell Inc. also engaged in property management. An audit of their trust accounts revealed a failure to perform 3-way reconciliations, funds being expended from owner accounts to pay for repairs in excess of funds available, which caused deficit spending, and a shortage. Boxwell Inc. was cooperative with Commission staff during the investigation and has brought their accounts into compliance.

DREW E BOXWELL (Fayetteville) – By Consent, the Commission suspended the broker license of Drew Boxwell for a period of 18 months, effective December 15, 2022. The Commission then stayed the suspension in its entirety and prohibited him from acting as a broker-in-charge for a period of one year. The Commission found that when a provisional broker, being supervised by Boxwell, listed a property for sale, they became aware of issues with the subject property’s roof after a buyer terminated due to discovering these issues during their home inspection. Boxwell’s firm then re-listed the subject property and failed to disclose the roof issues to the second buyer at the time their offer was made. Boxwell’s firm also engaged in property management. An audit of the trust accounts revealed a failure to perform 3-way reconciliations, funds being expended from owner accounts to pay for repairs in excess of funds available, which caused deficit spending, and a shortage. Boxwell was cooperative with Commission staff during the investigation and has brought the accounts into compliance.

Tech Corner: Electronic Signatures

Does Your Use of Electronic Signatures Comply with License Law & Commission Rules?

• Do you know what is an electronic record or electronic signature?
• Are you retaining the electronic record and signatures pursuant to License Law and Commission rules?
• How can you document the necessary requirements?

The law that governs the use of electronic records and electronic signatures is called North Carolina’s Uniform Electronic Transactions Act (hereafter referenced as “UETA”) and can be found in NCGS § 66-311 et. seq. UETA has a few exceptions, but it applies to electronic records and electronic signatures in the conduct of a transaction including a real estate transaction.

According to G.S. 66-314, UETA applies to any electronic record or electronic signature created, generated, sent, communicated, received or stored on or after October 1, 2000. This law further makes the use of electronic records and signatures legal so long as the parties agreed to use electronic means.

Question: What is considered an electronic record?

Answer: An electronic record is any information on a tangible medium that is created, generated, sent, communicated, received, or stored by electronic means.

Question: What is considered an electronic signature?

Answer: The UETA defines an electronic signature as a:

• sound, symbol or process,
• attached to, or logically associated with a record,
• executed or adopted by a person with the intent to sign the record.

Further, the UETA requires all three elements to be present to constitute a valid electronic signature.

Question: How long does an electronic record need to be retained according to the UETA?

Answer: The UETA does not specify the minimum amount of time electronic records must be retained. However, it states that record retention requirements imposed by other laws will be satisfied by retaining an electronic record that (1) accurately reflects the information set forth in the record at the time it was generated as an electronic document, and (2) remains accessible for later reference.

Question: Does the Commission require brokers to retain electronic records?

Answer: Yes. License Law and Commission rules require brokers to retain all records related to a transaction regardless of the format of the original record(e.g. hard-copy or electronic) The Commission does not require any specific format of record retention so long as the records are legible and available upon request. A broker is required to retain all records for a least three years following:

• the conclusion of the transaction, or
• termination of the broker’s agency relationship, and
• disbursement of all trust monies related to that transaction held by the broker, whichever occurs last.

Therefore, brokers must ensure that they retain all of their electronic records using the management software of their preference pursuant to the record retention requirements under Commission Rule 58A .0108.

Question: Is obtaining an electronic signature satisfactory to prove the document was reviewed with the client and explained by the broker?

Answer: Not necessarily. Most electronic signature tools such as DotLoop or Docusign simply indicate where the client needs to place signatures or initials, but Commission Rule 58A .0104, for example, requires that a broker provide AND REVIEW the Working With Real Estate Agents Disclosure. Agency principles require the review and explanation of all documents signed by the client. Brokers should also retain accompanying emails and notes that indicate they met these obligations, not just proof that the client signed the document. If you have any further questions or comments, please contact the Commission at 919-875-3700 or educ@ncrec.gov.

Reminder: Have you completed your Postlicensing Education?

Are you a provisional broker? If so, have you completed your 90-hours of Postlicensing education?

A provisional broker must complete all 90 hours of Postlicensing education within 18 months of their initial licensure date pursuant to Commission Rule 58A .1902(b). The initial licensure date is determined by the date the license is issued, whether or not the provisional broker ever activated it. Further, a provisional broker must complete all 3 Postlicensing courses by the deadline to remain eligible for an active NC real estate license.

Postlicensing courses must be completed (including successfully passing the end-of-course examination) within 180 days of enrollment. If a provisional broker purchases a Postlicensing education package (e.g. 3 courses from an Education Provider), the provisional broker should take the end-of-course examination after completing each course. If provisional brokers delay taking the examinations until the completion of all 3 courses, they run the risk of their 180-day courses expiring before all 3 exams can be scheduled or passed.

If all 3 Post courses have not been successfully completed within 18 months of initial licensure, the provisional broker’s license will be placed on inactive status until they have completed the requirements for reactivation of their license. Further, Commission rules do not allow for an extension of time for any reason to complete Postlicensing education.

Do you need to schedule your Postlicensing courses? A list of Education Providers who offer self-paced, distance, in-person, synchronous, or blended delivery Postlicensing courses can be found on the Commission’s website by clicking here. If you have further questions or comments, please contact the Education and Licensing Division at 919.875.3700 or email educ@ncrce.gov.

Current Stats: Monthly Licensee Count as of December 1, 2022