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Disciplinary Actions

YECENIA BANEGAS (JOHNSTON COUNTY) – By Consent, the Commission suspended the broker license of Ms. Banegas for a period of 2 years effective January 10, 2022. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Banegas bought and renovated a residential property and relied on unlicensed contractors’ advice in failing to obtain necessary permits. Ms. Banegas listed the property without disclosing that she had not obtained permits or hired licensed professionals to do renovations including relocating a wall, and connecting an HVAC system to a room. Ms. Banegas also failed to discover and disclose serious termite damage in the crawlspace. The Commission noted that Ms. Banegas had refunded the buyer their fees and deposits after they terminated the contract.

DANIELLE SEANTE GADDY (FAYETTEVILLE) – By Consent, the Commission suspended the broker license of Ms. Gaddy for a period of 18 months effective January 1, 2021. The Commission then stayed the suspension in its entirety. The Commission found that, as qualifying broker/broker in charge of a firm, Ms. Gaddy failed to complete required annual continuing education (CE) which resulted in her license being “inactive” from October 8, 2020, through November 6, 2020 and the firm’s license being “inactive” from October 8, 2020, through October 29, 2020. Despite this, Ms. Gaddy continued to enter into agency agreements and represent clients in submitting offers to purchase. Ms. Gaddy failed to notify the Commission within ten (10) days of the firm being administratively dissolved by the NC Secretary of State. Ms. Gaddy has since had the firm reinstated. In a transaction where Ms. Gaddy acted as the listing agent, the Commission found that she showed the subject property, with her seller-client’s approval, to a potential buyer three days prior to marketing the property in the MLS. Ms. Gaddy also added the phrase “not the procuring cause” in the selling agent section of an offer to purchase contract submitted by the buyer’s agent. The property ultimately went under contract with a different buyer.

JOHN LIGHT (KILL DEVIL HILLS) – The Commission accepted the voluntary surrender of the broker license of Mr. Light for a period of 1 year effective December 15, 2021. The Commission dismissed without prejudice allegations that Mr. Light violated provisions of the Real Estate License Law and Commission rules. Mr. Light neither admitted nor denied misconduct.

GEBA RENEA MCDANIEL (WINSTON-SALEM) – By Consent, the Commission suspended the broker license of Ms. McDaniel for a period of 2 years effective December 30, 2021. The Commission then stayed the suspension in its entirety. The Commission found that Ms. McDaniel was the broker-in-charge and qualifying broker of a property management firm which allowed an unlicensed broker, and his unlicensed firm, to conduct brokerage activities. Ms. McDaniel failed to notify the Commission within ten (10) days of her firm’s administrative dissolution by the NC Secretary of State. Ms. McDaniel’s management agreement with the property owner failed to contain all provisions as required by Commission rules. Ms. McDaniel, acting as a buyer agent, referred various clients to a credit repair/restoration company to assist with raising their credit rating and failed to disclose that this company was owned and run by her husband.

DEBORAH STALL PORTH (CHARLOTTE) – By Consent, the Commission suspended the broker license of Ms. Porth for a period of 2 years effective January 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Porth was qualifying broker/broker in charge of a Firm, whose company policy was to run a background check on every prospective tenant 18 years of age and older. In 2019, the Firm leased a property to three adult brothers without collecting the listed tenant security deposit or prorated rent, and after obtaining a background check for only one applicant rather than each tenant. The “overall recommendation” in the background report was to DECLINE that applicant. The tenants were late with their rent or did not pay rent while they were living in the property, did not vacate when their lease expired in October 2020, and were evicted in January 2021 still owing rent. The Commission noted that Ms. Porth personally paid the owner the missing tenant security deposit funds. Ms. Porth also failed to timely account for or disburse a tenant security deposit to a tenant despite re-renting the property within three weeks of the tenant’s vacating, and failed to maintain trust account records in compliance with Commission rules.

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.

We currently have opportunities available for the following positions:

Auditor – Audit trust account records of real estate brokers state-wide and investigate consumer complaints. Application deadline February 11, 2022.

Click here for more information.

But the Seller Breached! When Should Due Diligence Fees be Refunded?

In today’s hot market, due diligence fees have become a significant consideration for both buyers and sellers. The commonly used NC REALTORS©/NC Bar Association Offer to Purchase and Contract (Form 2T) incorporates a due diligence period for which the buyer may pay a negotiated fee. Some brokers are encouraging their buyer clients to offer considerable amounts in due diligence fees to make their offer more competitive, and some buyers do so even against their broker’s advice. 

First, it’s important to note that the parties are not required by law or by the Commission to either use the form provided to brokers by their trade association or to include a due diligence fee as part of their contract. The parties are always free to have their own attorney draft a contract for their transaction or to choose not to offer a due diligence fee. Brokers should be careful to not imply otherwise.

The Commission has seen a major increase in complaints from buyers insisting they are owed a due diligence fee refund because a home inspection discovered an issue with the property which was not disclosed prior to going under contract. If a buyer is offering thousands of dollars in due diligence fees to secure a contract, they need to be fully aware that the fee is generally not refundable, even if the inspection reveals material defects in the property. The rights of a buyer during the due diligence period are the same whether they have paid $0, $100, or $100,000 in due diligence fees.   

Brokers should never lose sight of the goal: doing what is best for the client rather than getting a bad contract in place. A good broker will always be sure to take the time to clearly explain the risks to the buyer in paying any amount of due diligence money. A broker’s fiduciary duties to their client include loyalty, obedience, accountability, disclosure, and skill, care and diligence.  When a buyer has hired a broker for their expertise and assistance in making what frequently amounts to the largest purchase they’ll ever make, then the expectation is that the broker will be looking out for their best interests. 

A broker’s best practices include being well versed regarding the terms of a contract and educating their client on all of the ins and outs of due diligence, including the risks involved and when a fee is refundable.

The Due Diligence Period is designed to allow the buyer:

  1. a period of time to inspect the property and determine if they wish to accept it in its current condition
  2. the opportunity to request repairs and negotiate the repairs and costs with the seller,
  3. access to the property for any and all inspections, surveys, appraisals, etc. and
  4. the right to terminate the contract unilaterally prior to the end of the due diligence period for any or no reason.

It’s a common misconception that a seller has ‘breached the contract’ by failing to agree to pay the cost of repairs or for not disclosing a defect in the property. While the buyer may seek to negotiate repairs, the contract does not obligate the seller to make any repairs. The seller’s obligations under the contract Form 2T are in Paragraph 8 and only relate to repairs to the extent that the seller has agreed to perform them. Specifically, the contract requires the seller to:

  1. provide evidence of clear title and a General Warranty Deed and payoff of all existing liens with an affidavit regarding payment,
  2. pay ad valorem taxes, pro-rated property taxes and any late listing fees, confirmed special assessments, Owner’s Association fees and certain charges payable by seller, and any agreed-upon buyer’s expenses,
  3. provide access to the property for the buyer including working utilities,
  4. remove the seller’s personal property, garbage and debris, and
  5. perform all repairs that have already been negotiated and agreed upon by the parties.

If the seller fails to perform those obligations, thereby breaching the contract, then the buyer may be entitled to a refund of their due diligence fee along with any earnest money, and costs incurred performing their due diligence (see paragraph 23 for the remedies). 

The contract makes no guarantee as to the condition of the property and, under paragraph 4(d), states that the property is being sold in its current condition. Brokers should make buyers aware that the Residential Property and Owners Association Disclosure Statement is not a guarantee of the property condition. A seller’s answer of “no” or “no representation” on the disclosure statement does not mean that there are no problems or defects in the property, only that the seller is either unaware of a problem or has chosen to make no representation. A deliberate misrepresentation by a broker may result in disciplinary action. Similarly, a deliberate misrepresentation by an unlicensed seller could result in civil liability if a buyer chose to pursue a private civil suit. However, the Commission has no authority to award such damages. The bottom line? Brokers should advise their buyer clients early and often that they should not expect a refund of any due diligence fee they pay even if they are dissatisfied with the condition of the property. Brokers should do everything they can to ensure that their buyer-clients are well-informed and offer an amount of due diligence fee that they are prepared to lose.

Disciplinary Actions

YECENIA BANEGAS (JOHNSTON COUNTY) – By Consent, the Commission suspended the broker license of Ms. Banegas for a period of 2 years effective January 10, 2022. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Banegas bought and renovated a residential property and relied on unlicensed contractors’ advice in failing to obtain necessary permits. Ms. Banegas listed the property without disclosing that she had not obtained permits or hired licensed professionals to do renovations including relocating a wall, and connecting an HVAC system to a room. Ms. Banegas also failed to discover and disclose serious termite damage in the crawlspace. The Commission noted that Ms. Banegas had refunded the buyer their fees and deposits after they terminated the contract.

DANIELLE SEANTE GADDY (FAYETTEVILLE) – By Consent, the Commission suspended the broker license of Ms. Gaddy for a period of 18 months effective January 1, 2021. The Commission then stayed the suspension in its entirety. The Commission found that, as qualifying broker/broker in charge of a firm, Ms. Gaddy failed to complete required annual continuing education (CE) which resulted in her license being “inactive” from October 8, 2020, through November 6, 2020 and the firm’s license being “inactive” from October 8, 2020, through October 29, 2020. Despite this, Ms. Gaddy continued to enter into agency agreements and represent clients in submitting offers to purchase. Ms. Gaddy failed to notify the Commission within ten (10) days of the firm being administratively dissolved by the NC Secretary of State. Ms. Gaddy has since had the firm reinstated. In a transaction where Ms. Gaddy acted as the listing agent, the Commission found that she showed the subject property, with her seller-client’s approval, to a potential buyer three days prior to marketing the property in the MLS. Ms. Gaddy also added the phrase “not the procuring cause” in the selling agent section of an offer to purchase contract submitted by the buyer’s agent. The property ultimately went under contract with a different buyer.

JOHN LIGHT (KILL DEVIL HILLS) – The Commission accepted the voluntary surrender of the broker license of Mr. Light for a period of 1 year effective December 15, 2021. The Commission dismissed without prejudice allegations that Mr. Light violated provisions of the Real Estate License Law and Commission rules. Mr. Light neither admitted nor denied misconduct.

GEBA RENEA MCDANIEL (WINSTON-SALEM) – By Consent, the Commission suspended the broker license of Ms. McDaniel for a period of 2 years effective December 30, 2021. The Commission then stayed the suspension in its entirety. The Commission found that Ms. McDaniel was the broker-in-charge and qualifying broker of a property management firm which allowed an unlicensed broker, and his unlicensed firm, to conduct brokerage activities. Ms. McDaniel failed to notify the Commission within ten (10) days of her firm’s administrative dissolution by the NC Secretary of State. Ms. McDaniel’s management agreement with the property owner failed to contain all provisions as required by Commission rules. Ms. McDaniel, acting as a buyer agent, referred various clients to a credit repair/restoration company to assist with raising their credit rating and failed to disclose that this company was owned and run by her husband.

DEBORAH STALL PORTH (CHARLOTTE) – By Consent, the Commission suspended the broker license of Ms. Porth for a period of 2 years effective January 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Porth was qualifying broker/broker in charge of a Firm, whose company policy was to run a background check on every prospective tenant 18 years of age and older. In 2019, the Firm leased a property to three adult brothers without collecting the listed tenant security deposit or prorated rent, and after obtaining a background check for only one applicant rather than each tenant. The “overall recommendation” in the background report was to DECLINE that applicant. The tenants were late with their rent or did not pay rent while they were living in the property, did not vacate when their lease expired in October 2020, and were evicted in January 2021 still owing rent. The Commission noted that Ms. Porth personally paid the owner the missing tenant security deposit funds. Ms. Porth also failed to timely account for or disburse a tenant security deposit to a tenant despite re-renting the property within three weeks of the tenant’s vacating, and failed to maintain trust account records in compliance with Commission rules.

Current Stats: Monthly Licensee Count as of January 1, 2022

When is the deadline for Continuing Education?

Do you know which CE courses you need to take? Did you know you can search for available CE courses on the Commission’s website?

CE Requirement

Rule 58A .1702 dictates that, to maintain an active license, a broker must take eight (8) hours of CE each year.

*A BIC or BIC-eligible Broker who takes the General Update course and an elective will maintain an Active license but will lose his/her BIC Eligible status and BIC designation.

Not sure which Update course you need to take?  Login to your license record on the Commission’s website to check your license status before registering for a course.

CE Course Search

CE Update and elective courses are offered in variety of formats.  Update courses are offered in person and via synchronous distance learning (aka, “live online” instruction using Zoom or similar technologies).  Elective courses are also offered via distance courses (self-paced online courses).

To search for in-person and “live-online” CE Update and elective courses:

  1. go to www.ncrec.gov;
  2. click on the Education menu;
  3. click on Search CE Course Schedules; and
  4. click on Search Providers.

To search for providers that offer self-paced, online CE elective courses:

  1. go to www.ncrec.gov;
  2. click on the Education menu; and
  3. click on List of Distance CE Providers.

For more information, contact the Education and Licensing Division at LS@ncrec.gov or 919.875.3700.

Nomination deadline for 2022 Outlaw Award is January 14

The Commission is soliciting nominations for the 2022 Larry A. Outlaw Excellence in Education Award until Friday, January 14, 2022.

Click here to download the nomination form, which includes detailed information about selection criteria and the nomination process.

Questions and nominations should be directed to outlawaward@ncrec.gov.

Disciplinary Actions

ADVANTAGE REALTY GROUP INC (MEBANE) – By Consent, the Commission suspended the broker license of Advantage Realty Group Inc. for a period of 24 months, effective December 15, 2021. The Commission then stayed the suspension in its entirety. Commission staff performed a spot audit on Advantage Realty Group Inc.’s trust accounts, which revealed that monthly reconciliations were not being performed, not all of the accounts were designated “trust” or “escrow”, an overage existed in the security deposit account, and property ledgers and trial balances were not being maintained. A field audit was then performed and the auditor also discovered deficit spending, a shortage, and a failure to prepare a trial balance. Furthermore, the Commission found that Advantage Realty Group Inc.’s owner, who is also a licensed broker, was primarily engaged in trust account dealings while the broker-in-charge had little to no involvement with maintaining the accounts. Advantage Realty Group Inc. has since engaged a consultant who has assisted in bringing its trust accounts into compliance with Commission rules

LINWOOD W BOLLES (CHARLOTTE) – By Consent, the Commission reprimanded Mr. Linwood, effective December 20, 2021. The Commission found that Mr. Linwood, acting as a buyer agent, submitted a written offer on a commercial property on behalf of his buyer-client with a November 30, 2020 closing date. The sellers signed the offer but changed the closing date. Mr. Linwood failed to have his buyer-client initial or otherwise accept the counter-offer, although the parties continued as if the contract were in effect. The buyer began the loan process and, after learning a loan could not be obtained in time for a November 30 close date, notified Mr. Linwood and asked for advice on what he should do. Mr. Linwood failed to advise his client on his right to terminate the contract until after the end of the Examination Period, The seller retained the $3000 earnest money deposit (EMD) after the buyer terminated. Mr. Linwood has personally refunded his client’s EMD.

NATASHA N EYADA AVOMBA (FAYETTVILLE) – By Consent, the Commission reprimanded Ms. Eyada Avomba, effective December 15, 2021. The Commission found that Ms. Eyada Avomba acted as a buyer agent during a showing. She viewed the subject property while her buyer-client was present on video. At the property owner’s request, the MLS listing stated in agent remarks: “Due to Covid & the safe welfare of all parties: please insure gloves, shoe covers and mask must be worn at all times while showing. Gloves and Shoe Covers will be provided at entrance and must be worn along with your personal mask.” The listing agent displayed a sign outside of the subject property as a reminder along with gloves and shoe covers. Video cameras were equipped in the subject property, which showed the Ms. Eyada Avomba in the property with a minor child and without shoe covers or gloves. Ms. Eyada Avomba admitted to initially having her mask in her hand. The listing agent called the Ms. Eyada Avomba and requested that she put on her mask and the owner spoke with the Ms. Eyada Avomba over the intercom system to request compliance. Ms. Eyada Avomba left the subject property with her mask on.

LINDA F HAGOOD (MEBANE) – By Consent, the Commission suspended the broker license of Ms. Hagood for a period of 24 months, effective December 15, 2021. The Commission then stayed the suspension in its entirety. The Commission staff performed a spot audit on Ms. Hagood Firm’s trust accounts, which revealed that monthly reconciliations were not being performed, not all of the accounts were designated “trust” or “escrow”, an overage existed in the security deposit account, and that property ledgers and trial balances were not being maintained. A field audit was then performed and the auditor also discovered deficit spending, a shortage, and a failure to prepare a trial balance. Furthermore, the Commission found that Ms. Hagood was primarily engaged in trust account dealings while the Firm’s broker-in-charge had little to no involvement with maintaining the accounts. Ms. Hagood has since engaged a consultant who has assisted in bringing the Firm’s trust accounts into compliance with Commission rules.

LIVIN’ FREE LLC (FAYETTEVILLE) – Following a hearing, the Commission permanently revoked the firm license of Livin Free LLC (dba Strother Property Management), effective September 1, 2021. The Commission had previously summarily suspended Livin’ Free LLC’s licensee effective May 19, 2021. The Commission found that Livin’ Free LLC failed to maintain its trust accounts and the records pertaining thereto in compliance with Commission rules, and that Livin’ Free LLC’s Chief Financial Officer converted trust monies to his own use, leading to a shortage in both the rent and security deposit trust accounts of at least $435,000. The Commission further found that Livin’ Free LLC charged a number of landlord-clients an unexplained $250 fee and failed to timely refund the fee after promising to do so.

DEBRA GREENSLADE MOONEY (TROUTMAN) – By Consent, the Commission suspended the broker license of Ms. Mooney for a period of 2 months, effective October 15, 2021. The Commission found that Ms. Mooney acted as a buyer agent for a client who was purchasing property long distance. Ms. Mooney failed to disclose to her buyer-client that the agent remarks on the property’s MLS listing noted that a minimum country club membership was required for any owner in the subdivision. Ms. Mooney sent covenants and rules to her client but falsely communicated that a membership was not required. Ms. Mooney further falsely communicated that the available boat slip would accommodate a 30 ft. boat when the Association rules limit boats to 26 ft.

LARRY EDWARD PAGE JR (FAYETTEVILLE) – Following a hearing, the Commission suspended the broker license of Mr. Page for three years, following the previously ordered summary suspension of Mr. Page’s license, effective May 19, 2021.  The Commission then stayed the suspension effective October 18, 2021. The Commission found that Mr. Page, as broker-in-charge of a firm doing property management, failed to maintain the firm’s trust accounts and the records pertaining thereto in compliance with Commission rules, and that the firm’s Chief Financial Officer converted trust monies to his own use, leading to a shortage in both the rent and security deposit trust accounts of at least $435,000. The Commission further found that the firm charged a number of landlord-clients an unexplained $250 fee and failed to timely refund the fee after promising to do so.

BONNIE J PRIDE (MEBANE) – By Consent, the Commission suspended the broker license of Ms. Pride for a period of 24 months, effective December 15, 2021. The Commission then stayed the suspension in its entirety. While Ms. Pride was acting as the broker-in-charge and qualifying broker of a Firm, the Commission staff performed a spot audit on Firm’s trust accounts, which revealed that monthly reconciliations were not being performed, not all of the accounts were designated “trust” or “escrow”, an overage existed in the security deposit account, and that property ledgers and trial balances were not being maintained. A field audit was then performed and the auditor also discovered deficit spending, a shortage, and a failure to prepare a trial balance. Furthermore, the Commission found that the Firm’s owner, who is also a licensed broker, was primarily engaged in trust account dealings while Ms. Pride had little to no involvement with maintaining the accounts. Ms. Pride has since engaged a consultant who has assisted in bringing the Firm’s trust accounts into compliance with Commission rules.

LARRY E ROGERS (FRANKLIN) – By Consent, the Commission suspended the broker license of Mr. Rogers for a period of 12 months, effective December 15, 2021. The Commission then stayed the suspension in its entirety. The Commission found that while Mr. Rogers was the broker-in-charge of a Firm, two of the Firm’s brokers had their licenses on “inactive” status from October 19, 2020, through March 5, 2021, and September 30, 2020, through December 8, 2020, respectively. The Commission sent multiple notices to Mr. Rogers regarding the status of the licenses for these brokers. During this time, the two brokers continued to engage in brokerage activity such as signing agency agreements, having their names included in advertised listings, and representing clients in purchase transactions.

JUSTICE TRACE STAMEY (FRANKLIN) – By Consent, the Commission suspended the broker license of Mr. Stamey for a period of 12 months, effective December 15, 2021. The Commission then stayed the suspension in its entirety. The Commission found that Mr. Stamey’s broker license went on “inactive” status, due to his failure to take required Continuing Education, on October 19, 2020. Mr. Stamey’s broker license remained “inactive” until March 5, 2021. The Commission sent multiple notices to Mr. Stamey regarding his broker license status. During this time, Mr. Stamey continued to engage in brokerage activity such as signing agency agreements, having his name included in advertised listings, and representing clients in purchase transactions.

TT & L LLC (FRANKLIN) – By Consent, the Commission suspended the broker license of TT & L LLC for a period of 12 months, effective December 15, 2021. The Commission then stayed the suspension in its entirety. The Commission found that two of TT & L LLC’s brokers had their licenses on “inactive” status from October 19, 2020, through March 5, 2021, and September 30, 2020, through December 8, 2020, respectively. The Commission sent multiple notices to TT & L LLC regarding the status of the licenses for these brokers. During this time, the two brokers continued to engage in brokerage activity such as signing agency agreements, having their names included in advertised listings, and representing clients in purchase transactions.

Staff Appearances

Miriam Baer, Executive Director of NC Real Estate Commission, spoke at the Coldwell Banker HPW Midtown Office meeting on December 14.

Emergency Video Notarization Law Expires on December 31, 2021

At the onset of the pandemic, the North Carolina General Assembly passed a law allowing remote notarization and oaths by live video (e.g., Facetime, WebEx, Zoom). After several extensions, the law is set to expire at 12:01 a.m. on December 31, 2021.

The General Assembly has been considering House Bill 776, which would permanently allow remote electronic notarization. However, as of this writing, House Bill 776 has not passed.  Therefore, the statutory authorization for remote notarization will expire on December 31, 2021.

If the authorization is not extended beyond 12:01 a.m. on December 31, 2021, then ALL notarial acts, traditional and electronic, will revert to the original law requiring in-person, physical presence by the principal or principals.  There remains a chance that the emergency provision or permanent authorization will be revived once the legislature returns in January but we are unable to predict the outcome.

Brokers should be aware of this change when discussing and planning for transactions with customers and clients.