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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;
- 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 the 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 broker 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.
Supporting Your Clients After a Disaster: Mortgage Relief Guidance
As a broker, your role extends beyond transactions—clients may reach out to you for guidance after a natural disaster. While you should never advise outside your expertise, you can provide valuable support by directing clients to trusted resources for assistance.
Here are some key resources for homeowners impacted by disasters:
- HUD and USDA Disaster Relief
For clients with government-backed loans, HUD and USDA offer disaster assistance options, including temporary housing solutions and rebuilding support. Visit HUD’s Disaster Relief Resources for more information. - Fannie Mae
- Fannie Mae reminds homeowners, renters, and servicers about available disaster relief options, including forbearance and loan modification programs. For details, visit their newsroom release.
- Homeowners can access specific guidance and tools through Fannie Mae’s Disaster Assistance page.
- Freddie Mac
Freddie Mac provides disaster assistance such as payment forbearance, late fee waivers, and foreclosure relief for affected borrowers. Clients can explore these options on the Freddie Mac Hurricane Relief page. - General Disaster Assistance
Direct clients to disasterassistance.gov, a one-stop shop for federal disaster aid, including housing assistance and financial recovery programs.
Encourage your clients who are having financial difficulty to contact their mortgage servicer, as servicers are their primary point of contact for initiating relief options. They also may need to talk to an attorney. Recommending these resources may help clients navigate these challenging times.
Inside the Hearing Room: A Closer Look
Part Four of an in-depth Five-Part series on the Complaint and Disciplinary Process in Regulatory Affairs. See Part One “Navigating Complaints: A How-To Guide” from the August 2024 eBulletin, Part Two “The Road Ahead: After the Investigation” from the September 2024 eBulletin, and Part Three “Beneath the Surface: The Pre-Hearing Process” from the October 2024 eBulletin.
In Part Four, we take a close look at what happens when a disciplinary case goes to a hearing before the Commission.
Administrative hearings before the Commission are formal in nature and are conducted according to Article 3A of Chapter 150B of the North Carolina General Statutes, also known as the Administrative Procedures Act. The North Carolina Rules of Evidence and the Commission’s Local Rules also apply to contested hearings, although the Rules of Evidence are more loosely applied than in civil or criminal court settings.
A hearing before the Commission resembles what you might see at a trial in a local courthouse. Present in the hearing room are the Commission members, the Respondent and any attorney for the Respondent, the Commission staff attorney, witnesses, and the court reporter. The Respondent is the real estate broker, either an individual or a firm, accused of violating real estate license law and/or Commission rules. The hearing room and the proceedings are open to the public.
The Commission staff attorney prosecutes the allegations and has the burden of proving the case by a preponderance of the evidence. This legal standard requires the staff attorney to prove that it is more likely true than not that the Respondent violated the License Law or rules. There may be evidence on both sides, and the Commission members determine the weight given to each piece of evidence.
In a hearing, a quorum of the Commission members sit as both judge and jury. The members present for the hearing are considered the hearing panel. They evaluate the evidence impartially and make a decision. One member of the hearing panel, usually the Chair of the Commission, is designated to preside over the hearing and make decisions regarding the admissibility of evidence.
A court reporter is also present in the hearing room. The court reporter swears in witnesses, documents the testimony of witnesses and arguments of the parties, and produces an official transcript of the proceedings.
A contested hearing begins with the opportunity for each party to make an opening statement. An opening statement is not considered evidence and is not an argument but is an opportunity to introduce the case, forecast the admissible evidence, and present a theory of the case to the hearing panel.
Following the opening statements, each party may present evidence. This may include the testimony of witnesses, the introduction of documents, and other material deemed relevant. The Commission staff attorney, who has the burden of proof, presents evidence first. Once the staff attorney has presented all of their evidence, the Respondent may present evidence.
After all of the evidence has been presented, each party has the opportunity to make closing arguments. Like the opening statement, the closing argument is not evidence but is an opportunity for each party to summarize the evidence that has been presented and attempt to argue, or persuade, the hearing panel to come to a particular outcome.
After closing arguments, the Commission retires to their deliberation room where, in private, they discuss the case and determine whether the allegations have been proven more likely than not. If the Commission decides that it is more likely than not that the Respondent has violated the law, the Commission will also decide what disciplinary sanction to impose. The Commission may impose a reprimand, a suspension of the Respondent’s license, some or all of which may be stayed on conditions, or even a revocation of a license. A revocation can be without the right to apply for reinstatement for a period of time, or it may be permanent. Following deliberations, the Commission typically returns to the hearing room to announce its decision. Occasionally, they take additional time and announce the decision within thirty days of the conclusion of the hearing. A written order issued by the Commission shortly thereafter formally documents the Commission’s decision regarding the matters at issue during the hearing and is sent to the Respondent.
A Respondent has the right to seek judicial review of a final agency decision. The process and requirements to seek this review, often referred to as an “appeal,” are outlined in Article 4 of Chapter 150B of the North Carolina General Statutes. Petitions for Judicial Review are heard in the Superior Court Division.
Next month, we conclude our series of the disciplinary process with a look at what happens during compliance review.
Disciplinary Actions
TERESA A BROOKS (BURLINGTON) – By Consent, the Commission suspended the broker license of Brooks for a period of 3 months, effective September 9, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that in December 2021, Brooks, acting as broker-in-charge, approved a new listing for a provisional broker. The provisional broker knew the property was partially destroyed by fire, and the owner performed renovations without obtaining permits. The provisional broker disclosed the unpermitted work in the MLS but failed to disclose the fire. A buyer went under contract and their home inspection revealed issues. The buyer shared the inspection report with the provisional broker and subsequently terminated the contract due to the issues. The provisional broker relisted the property but failed to disclose the material facts found in the home inspection report. A second buyer discovered no certificate of occupancy had been obtained for the property. Brooks failed to supervise the provisional broker during the transaction to ensure compliance with the License Law and Commission rules and failed to review advertisements for accuracy and compliance.
BURLINGTON MARKET CENTER LLC (BURLINGTON) – By Consent, the Commission suspended the firm license for a period of 3 months, effective September 9, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that the Firm listed a property for sale and had knowledge of, but failed to disclose, a fire or subsequent renovations performed by the owner without proper permitting. The lack of permits was originally disclosed in the MLS, but not the fire. The first buyer went under contract and obtained a home inspection which revealed numerous issues. The buyer shared the inspection report with the firm but subsequently terminated the contract due to the issues. The firm relisted the subject property but failed to disclose the materials facts found by the home inspection to a subsequent buyer.
KAREN B CLEGHORN (BANNER ELK) – By Consent, the Commission suspended the broker license of Cleghorn for a period of 12 months, effective October 1, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Cleghorn, acting as a listing agent, had a property go under contract with five different prospective buyers before it was ultimately sold. Cleghorn was informed by the agent for Buyer 3 that the contract was terminated due to multiple issues identified in an inspection report which recommended further investigation by an engineer. This report was provided to Cleghorn. The seller made several repairs to the subject property but did not make any structural repairs and thereafter stated in the RPOADS that they were not aware of any material issues or defects in the subject property. Cleghorn advertised that the property “was inspected recently and everything that came up has been corrected and an engineer signed off on everything.” A subsequent inspection revealed material defects in the property, some of which were previously identified in the inspection report for Buyer 3. Buyer 4 terminated the contract but refused to provide a copy of their inspection report to Cleghorn. The property was relisted ‘as is’ with updated disclosure statements from the Seller and was sold to Buyer 5. Cleghorn negligently failed to fully investigate or independently verify the extent of all repairs undertaken by the Seller after the termination of contract by Buyer 3 and before relisting the property.
LEONARD N EUDY (SALISBURY) – The Commission accepted the two-year voluntary surrender of the real estate license of Eudy, effective October 16, 2024. The Commission dismissed without prejudice allegations that Eudy violated provisions of the Real Estate License Law and Commission Rules. Eudy denied any misconduct.
ZYGMUNT C GROMADZKI (RALEIGH) – The Commission accepted the permanent voluntary surrender of the real estate license of Gromadzki, effective October 15, 2024. The Commission dismissed without prejudice allegations that Gromadzki violated provisions of the Real Estate License Law and Commission Rules. Gromadzki neither admitted nor denied misconduct.
JAMES DUANE HOLLAND (BURLINGTON) – By Consent, the Commission suspended the broker license of Holland for a period of 3 months, effective September 9, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Holland represented a buyer who purchased a property. During the due diligence period, the listing agent discovered there was no certificate of occupancy for the subject property and disclosed this to Holland. Holland notified his buyer that the property did not have a current certificate of occupancy but failed to fully disclose the importance of the issue. The buyer has been unable to obtain a certificate of occupancy.
TAMMY LYNN IDLER (RALEIGH) – By Consent, the Commission suspended the broker license of Idler for a period of 12 months, effective October 1, 2024. The Commission then stayed the suspension following a 1 month active period upon certain conditions. The Commission found that in 2022, Idler represented the seller of a property but failed to disclose that work done on the property was not properly permitted by the seller and that a general contractor did not conduct the renovations as required by law.
GILBERT JENKINS, JR. (EURE) – By Consent, the Commission reprimanded Jenkins Jr. effective October 31, 2024. The Commission found that Jenkins Jr. represented a buyer in purchasing a property but failed to fully explain to his client the problems with the property having unpermitted heating, ventilation, and air conditioning systems.
STELLA ANN MAYO (FAIRFIELD) – The Commission accepted the two-year voluntary surrender of the real estate license of Mayo, effective September 30, 2024. The Commission dismissed without prejudice allegations that Mayo violated provisions of the Real Estate License Law and Commission Rules. Mayo neither admitted nor denied misconduct.
STEPHEN GRANT NILSON (GREENVILLE) – By Consent, the Commission reprimanded Nilson effective October 31, 2024. The Commission found that Nilson represented the seller of a property but failed to disclose in advertising that the heating, ventilation, and air conditioning system that was installed by a licensed contractor was unpermitted.
EMILY COBB RUSSELL (BURLINGTON) – By Consent, the Commission suspended the broker license of Russell for a period of 3 months, effective September 9, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Russell listed a property for sale and was made aware that it had been partially destroyed by a fire and the owner performed renovations without obtaining permits. Russell disclosed the lack of permits in the MLS but failed to make any inquiry as to the extent of damage or repairs. A buyer went under contract and obtained a home inspection, which revealed numerous issues. The buyer shared the inspection report with Russell, and subsequently terminated the contract due to the issues. Russell relisted the property and advertised that all requested repairs were made but failed to disclose the material facts found in the home inspection report to a subsequent buyer. The Commission noted that during the due diligence period, Russell learned there was no certificate of occupancy for the subject property and disclosed this to the buyer agent.
CHARLES JOHNATHAN ALAN SHORT (ASHEVILLE) – By Consent, the Commission suspended the broker license of Short for a period of 6 months, effective October 1, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Short was the qualifying broker and broker-in-charge of CJ & Jess Real Estate Group Inc. Short listed a property and on the Residential Property and Owners’ Association Disclosure Statement the seller indicated “No Representation” with regards to the water source. Short’s employee inserted the listing information into the Multiple Listing Service to be advertised and mistakenly identified the property as being on city water and city sewer. Short failed to verify the accuracy of the advertisement. A buyer purchased the property and later discovered it was on a septic system.
MCKAY MARQUIS STEIN (CAROLINA BEACH) – By Consent, the Commission suspended the broker license of Stein for a period of 6 months, effective October 1, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Stein timely reported a guilty plea conviction for Misdemeanor Assault on a Government Official. The conviction stemmed from an incident where, while intoxicated, Stein spat on or at an officer investigating a situation. Pursuant to his conviction, Stein was sentenced to a 1 year term of probation with conditions, including no alcohol consumption or possession.
STELLAR BEACH REALTY & RENTALS LLC (OCEAN ISLE BEACH) – The Commission accepted the permanent voluntary surrender of the real estate firm license, effective October 16, 2024. The Commission dismissed without prejudice allegations that the Firm violated provisions of the Real Estate License Law and Commission Rules. The Firm neither admitted nor denied misconduct.
SANDRA STEUER (JACKSONVILLE) – By Consent, the Commission reprimanded Steuer effective October 1, 2024. The Commission found that Steuer was broker-in-charge of a licensed real estate firm and maintained a trust account. Steuer failed to complete the basic trust accounting course as required. An audit of the trust account revealed a number of issues, including failure to designate the account as “trust” or “escrow,” incomplete property ledgers, and the lack of a journal. There was no clear audit trail or bank reconciliations. In two separate transactions, Steuer, while broker-in-charge, improperly acted as a designated dual agent with a provisional broker under her supervision acting as a designated dual agent for the other party.
GARETH BRYAN WILKINSON (ASHEVILLE) – By Consent, the Commission suspended the broker license of Wilkinson for a period of 12 months, effective October 1, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Wilkinson acted as a dual agent in a land transaction and knew the seller wished to retain a 0.53-acre parcel of the land. Wilkinson failed to ensure that the contract or deed excluded the 0.53-acre parcel as the seller had requested and the seller was unable to retain the parcel as planned. In addition, Wilkinson obtained the signature of one of the two buyers on the Working with Real Estate Agents disclosure (“WWREA”) and submitted an offer for the property for both buyers on the same day. Wilkinson did not mark any of the agency types on the WWREA, and Wilkinson did not obtain the signature of the second buyer on the WWREAD until after submission of the offer.
MICHAEL ROBERT WILSON (RALEIGH) – By Consent, the Commission reprimanded Wilson effective October 1, 2024. The Commission found that in 2022, Wilson represented a buyer but failed to notify his client that a general contractor was required by law to perform renovations to the property exceeding $40,000 and failed to verify that the proper permits had been obtained for the renovations.
DOMINIQUE NICHOLE WILFONG ZAMORA (JACKSONVILLE) – By Consent, the Commission suspended the broker license of Zamora for a period of 18 months, effective July 1, 2024. The Commission then stayed the suspension following a 3-month active period upon certain conditions. The Commission found that Zamora was the listing agent for the subject property. Previously, Zamora acted as the buyer’s agent for the same property where it was disclosed to her that the first floor of the property flooded during Hurricane Florence. Zamora failed to disclose the previous flooding to the buyer prior to closing.ooding to the buyer prior to closing.