They Did What?! 

Prior to listing their property, the Seller completed the Residential Property and Owners’ Association and Disclosure Statement (RPOADS) and Mineral and Oil and Gas Rights Disclosure Statement (MOG). The Seller marked “No Representation” for their responses on the RPOADS.

Buyer and Seller went under contract using the NCAR/NCBA Standard 2-T Offer to Purchase and Contract. During the Due Diligence Period, Buyer discovered an issue that the Seller chose not to repair, nor did the seller offer concessions. Buyer terminated the contract and requested the return of the non-refundable Due Diligence Fee (DDF). The buyer agent (BA) threatened to file a complaint against the listing agent (LA) with the Commission if the Seller did not refund the DDF based on the seller’s lack of disclosure. The repair issue in question may or may not have been something the LA should or could have reasonably known existed.

In North Carolina, a broker should consider the following points:

• a broker is responsible for discovery and disclosure of material facts;
• while brokers have an affirmative duty to discover and disclose material facts, brokers are not expected to be experts on everything about a property;
• buyer agents should fully prepare their client prior to submitting an offer about the fact that once paid, the DDF is rarely refundable;
• disputes leading to complaints between brokers should be separate from contract negotiations;
• weaponizing the filing of complaints or lawsuits against another broker to have them strongarm their client would be a breach of fiduciary duties and possibly the REALTOR® Code of Ethics.

If you have any questions or need further clarity, you may email Regulatory Affairs at regulatoryaffairs@ncrec.gov.

Is a Federal BOI Filing Required for a NC Brokerage Entity?

The federal Corporate Transparency Act (CTA) was passed in 2021 and included significant reforms to prevent money laundering, combat terrorist funding and reduce corruption and tax fraud. Part of the CTA was the creation of an e-filing system that would require certain types of U.S. and foreign entities to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

The mandatory report is called a Beneficial Ownership Interest Report (BOIR). Most LLCs, corporations and other legal entities are required under the new law to file the BOI Report with FinCen or face potential substantial penalties.

The law is currently the subject of legal challenges. Filing deadlines have been imposed, temporarily halted, and reinstated. The North Carolina Real Estate Commission recommends that brokerage entities in North Carolina who have not already filed promptly seek out specific legal advice as to how the law applies to them and any filing deadline to which the brokerage firm may be subject.   More information is available at https://www.scotusblog.com/case-files/cases/garland-v-texas-top-cop-shop/.