Bulletin Search
Self-Dealing vs. Fiduciary
Brokers must act as fiduciaries for their principals while conducting real estate transactions. A “fiduciary” is a person who acts for another in a relationship of trust and who is obligated to act in the other’s best interests, placing the other’s interests before any self-interest.
Video Link: https://youtu.be/cvVHrtHdbNU
Commission Presentations
November 2024 Presentations
Sarah Dixon, Associate Legal Counsel II, spoke at OWN Real Estate on November 7th.
Bruce Rinne, Information Officer, spoke at Allen Tate REALTORS® on November 8th.
December 2024 Presentations
*These presentations are subject to change due to the availability of Commission members and/or staff.*
Bruce Rinne, Information Officer, will speak at Lifestyle International Realty on December 3rd.
Bruce Rinne, Information Officer, will speak at BHHS Carolinas Realty on December 4th.
Miriam Baer, Executive Director, will speak at Land of the Sky Association of REALTORS® on December 18th.
Diversity, Equity, and Inclusion Article
December 3rd is International Day of Persons with Disabilities.
This international observance, promoted by the United Nations since 1992, is a day aimed at raising awareness and promoting the rights and well-being of persons with disabilities. While there are laws, such as the Americans with Disabilities Act and the Fair Housing Act, which prohibit discrimination against those with a disability, as a real estate professional you should work to create an inclusive environment for the consumers and communities you serve.
With over 32% of North Carolinians identifying as having a disability, according to the Centers for Disease Control and Prevention’s Disability and Health Data System, the Commission hopes that you would consider ways to better serve those with disabilities.
Linked below are resources to help educate you on the rights of those with disabilities as well as resources to help you navigate successfully serving those with disabilities.
Americans With Disabilities Act (ADA)
Civil Rights Division | The Fair Housing Act
Disability Main | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
Disability Overview | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
Disability — Fair Housing Project
Fair-Housing-and-Disability-Brochure-10-8-2018.pdf
Home Ownership Matters – How REALTORS® Can Help Disabled Homebuyers
5 Tips For Working With Clients Who Have Disabilities – NC REALTORS®
Reminder: December is HERE! Have you reinstated your license?
Brokers with an expired license are required to cease all brokerage activities from the date of license expiration, i.e., July 1. But the good news for those who didn’t mean to allow their license to expire is that they have until December 31st to reinstate their license without additional education requirements. The bad news? December 31 is coming up fast. If the license isn’t reinstated by then, it will be too late to reinstate without additional steps.
What steps must a broker take to reinstate an expired license? That answer depends on how long the license has been expired.
To reinstate a license expired for less than 6 months:
- Go to the Commission’s homepage (www.ncrec.gov);
- Click on Reinstate your License;
- Enter your license number and PIN (last 4 of your SSN unless you have changed it);
- Answer required questions; and
- Pay $90 reinstatement fee.
NOTE: Following expiration, a broker’s license is reinstated on inactive status. To regain active status, a License Activation / Affiliation form (REC 2.08) also must be submitted.
To reinstate a license expired for 6 months but no more than 2 years
- Successfully complete one 30-hour Postlicensing course (course must be completed within 6 months prior to submitting reinstatement application); and
- Submit a reinstatement application with the $90 application fee and all required documentation, including criminal background report;
-OR-
- Submit a reinstatement application with the $90 application fee and all required documentation, including criminal background report; and
- Pass the National and State sections of license exam.
NOTE: Following expiration, a broker’s license is reinstated on inactive status. To regain active status, a License Activation / Affiliation form (REC 2.08) also must be submitted.
To reinstate a license expired for more than 2 years:
- complete the 75-hour NC Broker Prelicensing course [is this Successfully supposed to be a link? It might be helpful?] ;
- Submit a license application with the $100 original application fee and all required documentation, including criminal background report; and
- Pass the National and State sections of license exam.
NOTE: When a license has been expired for more than two years and is reinstated, brokers are licensed as a provisional broker and are subject to the 90-hour Postlicensing education program. To gain active status, a License Activation/Affiliation form (REC 2.08) also must be submitted.`
For more information, review Commission Rule 58A .0505 or visit the “Reinstate your License” page on the Commission’s website. You may also contact the Commission’s Education & Licensing Division at ls@ncrec.gov or 919-875-3700.
Reminder to Instructors: Reinstate your license today!
Per Commission Rule 58H .0306, Commission approval of instructors expires annually on June 30th. If you are a Commission-approved instructor who failed to renew their instructor approval by June 30, 2024, you have a limited amount of time to reinstate that approval. Similar to expired brokers, instructors have 6 months to reinstate their approval. Therefore, if you want to remain a Commission-approved instructor, then you have until December 31, 2024, to reinstate your instructor approval. If you are unsure of your status as an instructor, log in to the Instructor Dashboard and click on “View My Record.”
In order to reinstate your instructor approval, you must first complete 6 hours of instructor development education (if you have not already). For a list of options to complete this requirement, please review our Guidelines for Instructional Educational Requirement (Form REC 3.78). Once you have completed the required education, you will then need to log in to the Instructor Dashboard, click on the blue Reinstate button in the center of the page, complete the form, and click Submit.
If we do not receive your renewal application by December 31st, you will no longer be able to reinstate your instructor approval. After December 31st, you will need to go through original instructor approval process including successfully passing the New Instructor Seminar.
Case Study: Competency
FACTS: A broker has practiced residential sales for 10 years. Recently, one of their former clients asked them to act as a property manager for several of their residential properties. The broker is reluctant to act as a property manager because they do not have any experience and/or education in this specialty area of brokerage. However, after much contemplation, the broker and their former client execute a property management agreement.
ISSUE: Is the broker permitted under License Law and Commission Rules to perform property management services? Is the broker competent to act as a property manager?
ANALYSIS: Yes and Maybe. In North Carolina, there is only one type of real estate license for individuals, the broker license. North Carolina’s 75-hour Prelicensing Course educates students on the basic principles of real estate. An individual who has successfully completed that course and who has passed the NC Real Estate License Examination is deemed to have minimal competency to engage in any type of brokerage in North Carolina. Although brokers possess minimal competency, before engaging in any particular type of transaction, brokers should evaluate whether additional knowledge or skills are necessary to adequately represent their clients.
Prior to brokers engaging in any area of brokerage (e.g. residential sales, property management, commercial sales, vacation rental management, historic properties, lakefront properties, and foreclosures, etc.) they should speak with their BIC and evaluate their competency by using the “competence road map.” Essentially, brokers should ask themselves the following questions: (1) Am I authorized by my BIC to engage in this type of transaction, and (2) Do I have the necessary education and training in this type of transaction? If not, can my BIC mentor me or help me find a good mentor?
In the scenario above, the broker should speak with their BIC first to obtain permission to perform property management services. Before granting permission, the BIC should determine whether they are knowledgeable enough in the specialty area of brokerage – in this case, property management – to supervise the transaction. BICs should authorize affiliated brokers to practice only in the areas of brokerage that the BIC can adequately supervise pursuant to Rule 58A .0110.
If the broker does obtain the BIC’s permission, then the broker and the BIC should evaluate the broker’s knowledge and skills to ensure the broker is competent to perform brokerage services and adhere to their fiduciary duties with their client, either on their own, or with guidance from the BIC.
Here, the broker should consider taking additional property management courses prior to conducting these transactions. Brokers can also take continuing education courses that are also dedicated to property management and look for certification and/or accreditation programs for property management specialists.
Remember, although a broker possesses the minimal competency to engage in specialty areas of brokerage upon obtaining a North Carolina real estate license, an inexperienced will be held to the same standard as a broker who practices property management transactions regularly in the industry. Therefore, a BIC and the affiliated broker should evaluate the necessary education and experience to conduct a specialty transaction to ensure competency.
RESOURCES:
N.C.G.S. § 93A-6(a)(8), and 93A-6(a)(10)
License Law and Commission Rules: 58A .0110
Articles: 2019-2020 Update Course Section, “Competence of Licensees”
New HUD Guidance: Guidance on the Application of the Fair Housing Act to the Screening of Applicants for Rental Housing.
In April of 2024, HUD’s Office of Fair Housing and Equal Opportunity released new guidance on the Fair Housing Act’s application to tenant screening practices. The guidance outlines how housing providers and tenant screening companies can evaluate applicants for rental housing in a nondiscriminatory way. Additionally, HUD recommends some best practices for complying with the Fair Housing Act.
This guidance may assist applicants with understanding their rights and identifying instances in which they may have been denied housing unlawfully.
You can read HUD’s guidance here.
Sharing with the Educators at NCREEA Fall Conference
Len Elder, Director of Education and Licensing, with members of the Education staff, attended the virtual 2024 NC Real Estate Educator Association (NCREEA) Fall Conference. The all-day event included sessions on how educators can assist brokers understand and comply with changes to agency and compensation forms in light of the pending NAR settlement.
Mr. Elder and his staff led a townhall-type session to clarify that the proposed changes to standard REALTOR® forms and best practices are not in conflict with NC License Law and Commission rules which set the minimum requirements for real estate brokerage in North Carolina. Clarification was made that compliance changes proposed by NC REALTORS® do not require any state law or Commission rule changes.
Discussion was also lively regarding agency practices such as subagency, co-brokerage fees, and brokers allowing third parties to show property or hold open houses for the brokers’ clients. Caution was strongly advised in the use of third parties, some of which do not hold active NC broker licenses, and even if licensed, may not have the necessary authority.