February is Black History Month

February is Black History Month, where we honor and celebrate the history and legacy of African Americans in real estate and in our nation. We recognize the history of unfair housing practices in America, as well as the ongoing work to be done to end housing discrimination and to assure that all Americans have equal access to housing opportunities. We celebrate the increased diversity of our profession and the immense contributions of minority real estate brokers across our state.

New NCREC Licensee Facebook Group Now Live!

Join our new NCREC Licensee Group on Facebook to stay up to date on the most recent licensee questions, and important broker-specific information and updates from the NCREC.

Click the link to join: https://www.facebook.com/groups/1225190201719795

Disciplinary Actions

KELLIE DEANNE SANFORD (JACKSONVILLE) – By Consent, the Commission suspended the broker license of Sanford for a period of 6 months, effective July 1, 2022. The Commission found that in February 2021, Sanford purchased subject property in the name of a partnership they formed with their spouse. Sanford listed subject property for sale in June 2021. They advertised the property as containing a water line and septic on site. Sanford failed to disclose the broken water line or the existence of a temporary, above ground water line that was approximately 150 feet in length, installed by Sanford’s spouse.

Employment Opportunities Available

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. Click here for more info.

The First Outreach Commission Meeting of 2023 Was a Success

The Commission held its January 2023 meeting in Wilmington, NC as the first location for the new year, as part of its outreach initiative. The Commission welcomed local brokers, the public, representatives of the Cape Fear Realtors®, and State representatives as well. If you missed it or other meetings you can view them here.

Current Stats: Monthly Licensee Count as of January 1, 2023

Tech Corner: Security Procedures

Are you using an electronic service provider for electronic signatures and to store and retain your documents?

Have you evaluated whether your documents are secure?

The Commission does not recommend any electronic service provider over another. Most importantly, the electronic service provider selected by a brokerage must satisfy minimum legal requirements under the Uniform Electronic Transactions Act (UETA).

Brokers should ensure they secure the confidential information from clients or customers upon receipt and while conveying (e.g. phone, email, text, etc.) their information to others. Brokers should take reasonable steps to determine if the electronic service provider has features and security procedures within the system that will protect the integrity of their clients’ information.

According to G.S. 66-312(15), the UETA defines security procedures as:

…a procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record. The term includes a procedure that requires the use of algorithms or other codes, identifying words or numbers, encryption, or callback or other acknowledgement procedures.

There are a multitude of resources available to ensure your compliance with the Uniform Electronic Transactions Act.  You can access additional information regarding security procedures for electronic service providers here.

If you have any further questions or comments, please contact the Commission at 919.875.3700 or educ@ncrec.gov.

What Do You Know about Wire Fraud?

Do you know the latest scams used by hackers to conduct wire fraud? Have you or a client been a victim of wire fraud? Would you like to learn more about wire fraud and how to prevent it?

The North Carolina Real Estate Commission, North Carolina Bar Association and Investors Title Insurance Company are collaborating to present a Wire Fraud Conference for attorneys, brokers, and other interested persons in North Carolina this year.

The Wire Fraud Conference will address:

• common myths about wire fraud,
• wire fraud prevention tactics, and
• the liability of brokers and attorneys when wire fraud has occurred.

Brokers will receive four (4) hours of continuing education elective credit if they successfully attend the conference.

If you would like to attend the Wire Fraud Conference, please click here for additional information and conference session dates.

The first session for the Wire Fraud Conference will begin on March 2, 2023. Brokers may register for any session; however, early bird registration ends three (3) weeks prior to any session date.

Would you like to register now? Click here.

Do Free Real Estate Continuing Education Courses Violate RESPA?

Has a settlement service provider offered to “sponsor” your continuing education course? Was the course free of charge?

The Real Estate Settlement and Procedures Act (RESPA), regulates federally related mortgage loans on residential real property. RESPA, specifically Section 8(a), prohibits current or futurereferral sources from receiving kickbacks, unearned fees, or “things of value” from settlement service providers.

Question: What is a settlement service?

Answer: A settlement service is any service provided in connection with a real estate settlement for which the buyer or seller will pay. The services include, but are not limited to:

• title searches, examinations, or insurance,
• property surveys,
• services rendered by an attorney,
• origination of a federally related mortgage loan (loan applications, loan processing, and the underwriting and funding of loans)
• pest and fungus inspections, and
• home inspections.

Question: What is considered a “thing of value?”

Answer:  A “thing of value” is any payment, advance, funds, loan, service, or other consideration with more than nominal value.

Therefore, if a settlement service provider offers real estate continuing education courses free of charge to a broker, the settlement service provider and the broker who attends the course may be in violation of RESPA. Additionally, if a service provider pays the continuing education course fee for the broker directly to an education provider or reimburses the broker for the course fee, the settlement service provider and the broker are still violating RESPA because the free continuing education course is a “thing of value.”

The Consumer Financial Protection Bureau published a set of frequently asked questions (FAQs) discussing RESPA Section 8 and its application to Marketing Services Agreements, Gifts and Promotional Activities. You can view the FAQs here.

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.