Rule Changes To General Assembly

Proposed amendments to the Commission’s rules have been approved by the Rules Review Commission, the legislature’s independent review board and final step before submission to the General Assembly. If the Assembly makes no objection, the rules will go into effect July 1, 2003.  The proposed rule changes include:

A .0107 – Amend to permit a vacation rental manager to maintain accounts payable ledgers containing specifically defined data in lieu of subsidiary ledger sheets.

A .0113 – Amend to clarify that licensees must report disciplinary actions taken against them by any governmental agency as well as criminal convictions, within 60 days.

A .0302 – Amend to prevent an individual who has applied for licensure as a real estate salesperson from applying for licensure as a real estate broker during the pendency of the salesperson license application.

A .0502 – Amend to place upon the principal broker of a firm several new responsibilities, which include the duty to secure and preserve the transaction and trust account records of the firm whenever there is a change of Broker-in-Charge and the duty to notify the Commission if these accounts are out-of-balance or have not been properly reconciled.

E .0203 – Amend to require that video tapes provided by update course instructor applicants be made within the previous year.

Contact the Commission’s rule-making coordinator, Pamela Millward, for further information or for copies of the full text of these proposed rules.

This article came from the February 2003-Vol33-3 edition of the bulletin.

Reapplying For Exam Made Simpler, Faster

Beginning January 1, 2003, the Real Estate Commission and its examination services provider, Psychological Services, Inc. (PSI), implemented new simplified reapplication and examination rescheduling procedures for license applicants who are unsuccessful on their license examinations (or who fail to take the examination within their 90-day examination eligibility period).

These new procedures allow unsuccessful examination candidates to electronically refile their applications the day after failing an examination and to simultaneously schedule an examination retake, typically within 2-4 days.

Prior to January 1, 2003, a license applicant who was unsuccessful on his/her license examination was required to file another complete paper license application and application fee with the Commission and wait to receive a notice of examination eligibility before the applicant could contact PSI to schedule and retake the license examination.

Due to the large volume of paper applications from first-time applicants that the Commission also has to process, it had become common for a repeat applicant who promptly filed another paper application with the Commission to have to wait two weeks or more before receiving a notice authorizing him/her to schedule an examination retake with PSI.

This article came from the February 2003-Vol33-3 edition of the bulletin.

People

Bart H. Allen has assumed the position of Auditor/Investigator in the Auditing and Investigations Division.  He performs field investigations of licensees and audits real estate companies.  Prior to joining the Commission, Mr. Allen was a Realtor with Allen Tate Co. in Charlotte, N.C.  Mr. Allen has also worked in the accounting department of Belk Store Services and in Commercial Banking with Bank of America.

M. Spier Holloman has assumed the position of Auditor/Investigator in the Auditing and Investigations Division. She will investigate consumer complaints against licensees, audit trust accounts and assist the instructors of the Trust Account
Courses. Prior to joining the Commission, Ms. Holloman worked in real estate sales and rentals. She also served on the Grievance and Professional Standards committees for her local board.

This article came from the February 2003-Vol33-3 edition of the bulletin.

No Listing, No Sign, No Sale, No Service

By Janet R. Thoren
Deputy Legal Counsel

Q:  The owner of a commercial subdivision has asked me to place my “for sale” sign at the entrance. Can I do so, even though I do not have a written listing agreement with him?

A:  No. Advertising another’s property for sale or rent requires not only permission of the owner but also a written agreement outlining the services you will provide.

Q:  I have a written listing agreement but it has expired. Nevertheless, the owner tells me I can leave my sign up and she will pay me a commission if the property is sold through me. Can I continue to offer the property for sale under this arrangement?

A:  No. Although the owner has verbally permitted you to continue to advertise and offer the property for sale, you may not do so without a valid written agreement for brokerage services with the owner.

Q:  I realize that I cannot offer property for sale without a written agency agreement. But can I offer it for rent?

A:  No. Since September 1, 2002, Commission rules now require brokers to have written agreements for brokerage services before they can offer property for rent.

Q:  I received a letter from a property owner that states “I give you and your firm permission to place a sign on my property and advertise it for sale. Although I do not know if I am ready to sell, if you want to work on it for me, go ahead and I’ll look at any offers you bring.” Based upon this letter, can I proceed in offering to sell the property?

A:  No. Although the letter gives you the owner’s permission to conduct brokerage services on his behalf, it does not contain the following elements required by Commission rule: A definite time period for the agency agreement, termination without prior notice at the expiration of the period, and specific non-discrimination language.

Q:  Is there a standard listing agreement that I must use?

A:  Although standard listing forms are available, many brokers are now offering limited services to sellers which are not contemplated by these forms. However, you are reminded that the agreement you use must be in writing and comply with Commission rules. It is also prudent to include in the agreement terms governing the fee you expect for your services and when the fee is earned.

This article came from the February 2003-Vol33-3 edition of the bulletin.

New Q&A Publication on Earnest Money Deposits, Licensing Booklet Divided

Questions and Answers on: Earnest Money Deposits, a new Commission publication, examines issues arising from the payment of earnest money deposits prior to closing a residential real estate sales transaction. The brochure is available for $.25 a copy.

In addition, an existing publication has been divided into two separate booklets.

Real Estate Licensing in North Carolina evolved from the old publication of the same name but with an exclusive focus on the licensing process. It contains the license application form and is free of charge.

North Carolina Real Estate License Law and Commission Rules (also including Trust Account Guidelines and Comments on the Law and Rules) is the remainder of the content that was originally in the licensing publication. This booklet sells for $3.

All Commission publications may be ordered online at the Commission website, www.ncrec.state.nc.us, or by mailing or faxing the appropriate publications order form found on pages 6 and 7 as well as online. The text for all publications is available on the website as well, free of charge.

This article came from the February 2003-Vol33-3 edition of the bulletin.

License Law Amendment Shortens Fee-Only Reinstatement Period

A recent amendment to the Real Estate License Law has shortened the period of time within which, by merely paying a fee, you may reinstate an expired license.  Now, if you fail to renew your license by June 30 of any year, you only have until the following December 31 (i.e., six months) to reinstate it merely by paying the prescribed fee.

The new reinstatement fee is $55 regardless of how long your license has been expired (whether one day, one year, three years, etc.).

If you fail to reinstate your license within this six-month period, the Commission may consider you as never having been licensed and, therefore, subject you to the requirements for original licensure–including the license examination. Accordingly, the Commission has adopted the following guidelines:

If your license has been expired for more than six months but not more than three years, you must either (1) pass the current license examination; or (2) complete the 67-hour Salesperson Prelicense Course within one year before applying to reinstate a salesperson license (or the 60-hour Broker Prelicense Course to reinstate a broker license); or (3) possess an active real estate license in another state (a broker license to reinstate a North Carolina broker license).

If your license has been expired for more than three years, you must satisfy all prelicense education and examination requirements unless you hold a real estate license in another state (a broker license to reinstate a North Carolina broker license).

Most persons who allow their licenses to expire simply forget to renew them on time.  Others think that licenses on inactive status do not require renewal each year. And still others change real estate firms and/or their residence addresses without notifying the Commission.  If you place your license on inactive status, you must renew it each year and pay the renewal fee to preserve the right to activate it later (after making up any continuing education deficit).  Also, be careful to notify the Commission promptly of any business or residence address change so you will receive your renewal notice. Otherwise, you may find yourself having to repeat a prelicense course and/or retake the license examination.

This article came from the February 2003-Vol33-3 edition of the bulletin.

How to Order Publications

Changes to the process of ordering publications and the implementation of new charges for certain Commission publications became effective October 1 as follows:

–To place an order, you are now able to do so on the Commission website, www.ncrec.state.nc.us, with either Visa or MasterCard.

–For mail or fax orders, the Publications Order Form (see pages 6 and 7 and the website) has been divided into two separate forms in the Bulletin. The form for publications with charges includes Working With Real Estate Agents, Questions and Answers on: Home Inspections, Questions and Answers on: Earnest Money Deposits, Residential Square Footage Guidelines and a new booklet containing the NC Real Estate Law, Commission rules and Trust Account Guidelines. Credit card ordering is now permitted when using this form, which is to be mailed to the address shown on it for fulfillment. The other form is for publications that are free of charge and should continue to be sent to the Commission.

The Commission cannot accept telephone orders.

This article came from the February 2003-Vol33-3 edition of the bulletin.

License Applicants Must File Report Of Criminal Records

License applicants are now required to submit a criminal record report with their license application in order for the Real Estate Commission to have more complete and accurate information about their’ criminal history.

The Commission is responsible for determining that each license applicant possesses the honesty, truthfulness, integrity and general moral character necessary to protect the public interest and promote public confidence in the real estate brokerage business.  Probably the single most important factor considered by the Commission with regard to an applicant’s character is his/her criminal record.  The Commission has always required applicants to voluntarily disclose all previous criminal convictions and any pending charges, and their criminal records have been checked when deemed appropriate. The new requirement will provide the Commission with the criminal records of all applicants.

Any applicant who has resided in North Carolina during the previous seven years must submit a statewide criminal record report that shows all criminal offenses or pending charges that have been recorded in North Carolina’s computerized statewide criminal record database.  An applicant who has resided in another state during the past seven years must submit a separate report for each out-of-state county in which he/she has lived during that period and that report must be based on a search of the appropriate county criminal records.  (Many other states do not yet have a statewide computerized criminal record reporting system.)  As in the past, applicants are still required to disclose all criminal convictions, regardless of when or where they occurred or whether they are included in the report submitted to the Commission.

Applicants are provided with a list of reporting services known to prepare reports satisfactory to the Commission.  The fees charged by these reporting services for a report range from $9 to $22 for a North Carolina statewide report and $5 to $50 for an out-of-state county report.

Although this requirement increases the  costs to applicants and is creating more work for the Commission, the Commission believes this is an important step that will help it better assure that the interests of real estate consumers are properly protected.

This article came from the February 2003-Vol33-3 edition of the bulletin.

Commission Receives Four Top Industry Awards

As what one speaker described as “the North Carolina Awards Show,” the Real Estate Commission won top honors in four separate categories at the Annual Conference of the Association of Real Estate License Law Officials (ARELLO). The Commission received ARELLO’s “Investigator of the Year” award, “Communication Excellence Award” for its Real Estate Bulletin newsletter, and two education awards recognizing its Broker-in-Charge and Trust Account courses.

Shown are (left to right) Auditor/Investigator Robin Tanner, Publications Officer Robert Forshaw, Commission Vice Chairman William Lackey, Legal Education Officer Patricia Moylan, Commission Chairman Allan Dameron and Director of Audits and Investigations Emmet Wood.

This article came from the February 2003-Vol33-3 edition of the bulletin.

Commission Welcomes Chilean Representative

The Real Estate Commission was recently honored by a visit from Rene Aranguiz Lezaeta, Director of Camara Nacional de Servicios Inmobiliarios Ag, Chile’s preeminent real estate trade association.

Mr. Aranguiz met with the Commission’s senior staff to discuss North Carolina’s real estate licensing and regulatory program, and the Commission learned about efforts to establish a similar program in Chile.

The very informative meeting was arranged by Raleigh real estate broker Jose M. Serrano.

This article came from the February 2003-Vol33-3 edition of the bulletin.