Wendell Bullard of Durham and Jeffery J. Malarney of Manteo have been appointed to the North Carolina Real Estate Commission by Governor Roy Cooper, it was announced by Miriam J Baer, Executive Director.
Bullard is Managing Broker at Bullard Properties, LLC, in Durham and has over 22 years of experience in the real estate industry including affiliations with Prudential Carolinas Realty, and Realty Executives Triangle Southpointe (Co-Owner).
He is past president of the Durham Regional Association of REALTORS® and the North Carolina Association of REALTORS® and past REALTOR® of the Year in both organizations.
One of several founding members for charter high schools in Charlotte and Raleigh, Bullard is past treasurer for Commonwealth and Stewart Creek High Schools and past board president of Central Wake Charter High School in Raleigh.
He is a graduate of North Carolina Central University with a BS in marketing and a United States Air Force Security Specialists veteran.
Malarney, a former member of the Real Estate Commission, serves as General Counsel for Twiddy & Company, a North Carolina Vacation Rental Management Firm, and is a principal of the Law Offices of Jeff Malarney, PLLC. He is also a licensed real estate broker and property insurance agent.
A Commander (ret.) of the United States Navy Judge Advocate Corps, he is a former Special Assistant United States Attorney, past president of the North Carolina Vacation Rental Manager’s Association, and past chairman of the Outer Banks Chamber of Commerce.
Malarney holds a JD from Wake Forest University School of Law and BA (cum laude) in Economics and Management from Albion College.
This article came from the October 2018-Vol49-2 edition of the bulletin.
By Jean A. Wolinski-Hobbs, Auditor/Investigator
The Real Estate Commission has three rules governing how brokers handle and account for trust monies – A.0116, .0117, and .0118. Additionally, the ncrec.gov website has a number of videos available on trust account handling. Familiarize yourself with these rules to avoid the following common mistakes.
A variation on the same theme is depositing trust monies into an operating account and then transferring them into the trust account. Well, DON’T! All trust monies must be deposited into a trust account and all clients and invoices need to be paid out from the trust account. The only time it is acceptable to move money from a trust account into an operating account is when you are disbursing your earned commission or are reimbursing yourself for invoices that were paid by you from your operating account in advance and on behalf of the client.
If the bank account into which you deposit client monies is not identified as a trust or escrow account, then it will not be treated as such by the IRS or courts, meaning they can attach or freeze the monies. The FDIC may also deny insurance coverage for each individual customer whose money is deposited into an account not properly designated.
Well, DON’T! Ensure that incoming funds clear prior to paying the client or any invoices on behalf of the client. Failure to do so can cause a deficit in the account if the funds do not clear.
Well, DON’T! This also causes a deficit in the account. Instead, make sure that service charges are covered by depositing enough of your own money to cover them and keep a ledger to keep track of those personal funds.
Well DON’T! To do so is commingling. Also, don’t use a money market account if it requires a large balance of personal funds in order to avoid service fees – that is also commingling. Money market accounts are acceptable if there is a large enough balance of customer funds, such as a security deposit trust account holding a substantial number of deposits.
Well, DON’T! Trust accounts must be custodial and if the owner of the funds has access to make their own deposits or withdrawals, then it is no longer a custodial account.
Well, DON’T! Homeowner’s associations must each have their own individual trust account. If you manage ten (10) homeowner’s associations, then you must maintain at least ten (10) trust accounts.
Well, DON’T! Embezzlement happens even with trusted bookkeepers or long-time employees and is made easier when one person is in charge of everything. Simple steps can help ensure that trust money is safeguarded. For example, the person who receives cash should not be the same person who reconciles the trust account. Cash receipts should be verified at the end of each day and logged by the broker-in-charge or another person in a supervisory role. And, the bookkeeper should not be the person initially receiving the bank statement. The broker-in-charge should verify the items in the bank statement against the journal and also check cash receipts against deposits on a monthly basis, prior to the reconciliation. A bookkeeper who never takes vacations or is obsessed with getting the mail is not a good thing, it is a RED FLAG.
Well, DON’T! If you “touch” the money, then you must have a trust account and the money must go through your trust account. If the check is written to the client, do not accept it. The only time it is acceptable for a broker to deliver monies to a client is when the payment is subject to a specific exception such as a due diligence check or check payable to a designated escrow agent.
Well, DON’T! Just because there is $50,000 in the trust account does not mean that you can pay for a new water heater costing $1000 for client Smith if only $200 of the $50,000 belongs to client Smith. To do so means you are using other clients’ money to pay for client Smith’s water heater and causing a deficit in client Smith’s ledger. No client should ever have a negative balance on their ledger.
Well, DON’T! If a tenant owes a $15 late fee but has not paid that amount, do not pay yourself or the client the late fee. Disbursements on rentals must be calculated upon the amount actually paid for that month.
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If this sounds confusing, you are not alone. Come to one of our monthly trust account courses and learn the rules in detail. Bring along anyone who also handles trust accounts for your firm. As a broker-in-charge, at a minimum you will learn what you need to know to adequately supervise your bookkeeper and what you or your software program needs to be able to produce in the way of reports in order to be compliant. As a bonus, it qualifies as an elective continuing education course.
This article came from the October 2018-Vol49-2 edition of the bulletin.
By Elizabeth W. Penney, Information Officer
Brokers know that most sellers of residential property are required by law to give the buyer two disclosure forms: the Residential Property and Owners’ Association Statement (RPOADS) and the Mineral and Oil and Gas Rights Mandatory Disclosure Statement (MOGS).
The four-page RPOADS form should be given prior to an offer to purchase. The seller has the option of answering each question “yes’, “no,” or “no representation.” Thus, while it is a mandatory disclosure form, it does not actually mandate any disclosure because of the “no representation” option. Sellers who choose to answer the questions “yes” or “no” should do so honestly, based on their actual knowledge as a seller can be held accountable in a court of law for the truth and accuracy of the representations made.
Sellers and brokers should understand that regardless of the seller’s decision to disclose issues and defects concerning the property, a broker must disclose any material facts to a prospective buyer. If a home inspection reveals a significant defect and the seller refuses to repair, that defect becomes a material fact which the agent has discovered and must disclose affirmatively to prospective buyers.
If the seller originally answered any of the relevant questions “no”, then the broker should also advise the seller-client to amend the RPOADS once a defect becomes known to avoid charges of misrepresentation and fraud. If the seller decides not to disclose, the seller still has the option of “no representation” but, again, the broker still must disclose the known material fact separately from the RPOADS.
Failure to provide the RPOADS can have consequences. The statement should be provided to a prospective buyer prior to the buyer making an offer. A seller or listing agent who fails to present a completed statement prior to an offer being extended opens the door to the possibility of the buyer rescinding the contract within either three days of contract formation or three days from receipt of the statement, whichever occurs first. It is the listing agent’s duty to inform seller-clients of their rights and obligations regarding the completion and distribution of this mandatory form.
Additionally, sellers of residential property are now required by law to give the buyer the single-page MOGS form prior to the Offer to Purchase. The seller has the option to mark “no representation” only as to the severance of mineral or oil and gas rights by a previous owner.
It is important to note that the fact the property is investment property and has not been owner-occupied does not negate the obligation of the seller to provide a disclosure statement to prospective buyers. When in doubt as to whether the RPOADS or MOGS must be given in a certain transaction, sellers should contact the Commission or err on the side of caution and provide the Statement.
Exemptions to Providing RPOADS/MOGS Disclosure Forms
North Carolina state law (General Statute Chapter 47E) requires that the RPOADS/MOGS be given in all transfers of residential one-to-four unit dwellings by sale, exchange, installment land sales contract or option to purchase, subject to a few very narrow exceptions in NCGS § 47E-2 as shown below:
NCGS § 47E-2 (a)… [RPOADS/MOGS exemptions]
(1) Transfers pursuant to court order, including transfers ordered by a court in administration of an estate, transfers pursuant to a writ of execution, transfers by foreclosure sale, transfers by a trustee in bankruptcy, transfers by eminent domain, and transfers resulting from a decree for specific performance.
(2) Transfers to a beneficiary from the grantor or his successor in interest in a deed of trust, or to a mortgagee from the mortgagor or his successor in interest in a mortgage, if the indebtedness is in default; transfers by a trustee under a deed of trust or a mortgagee under a mortgage, if the indebtedness is in default; transfers by a trustee under a deed of trust or a mortgagee under a mortgage pursuant to a foreclosure sale, or transfers by a beneficiary under a deed of trust, who has acquired the real property at a sale conducted pursuant to a foreclosure sale under a deed of trust.
(3) Transfers by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust.
(4) Transfers from one or more co owners solely to one or more other co owners.
(5) Transfers made solely to a spouse or a person or persons in the lineal line of consanguinity of one or more transferors.
(6) Transfers between spouses resulting from a decree of divorce or a distribution pursuant to Chapter 50 of the General Statutes or comparable provision of another state.
(7) Transfers made by virtue of the record owner’s failure to pay any federal, State, or local taxes.
(8) Transfers to or from the State or any political subdivision of the State.
NCGS § 47E-2 (b)… [Additional RPOADS exemptions]
(1) Transfers involving the first sale of a dwelling never inhabited.
(2) Lease with option to purchase contracts where the lessee occupies or intends to occupy the dwelling.
(3) Transfers between parties when both parties agree not to complete [the RPOADS].
This article came from the October 2018-Vol49-2 edition of the bulletin.
By Corean E. Hamlin, Director of Education and Licensing
Since July 1, 2014, Commission rule 58A .0503 has required brokers to renew their licenses on the Commission’s website or by calling the Commission’s office. Despite the rule, the Commission has attempted to accommodate brokers who preferred to pay their renewal fees by check.
Effective July 1, 2018, there is no longer an option to renew by phone has been removed. In addition, checks will no longer be accepted by mail. Going forward, brokers will renew their licenses on the Commission’s website between May 15 and June 30 each year. Brokers who wish to reinstate their licenses within the first six months of license expiration will also be required to do so electronically.
The Commission eliminated the option to renew by phone for the security of broker information. Entering payment information on a secure website affords better protection than communicating such information over the phone.
The decision to stop accepting checks resulted from two law changes requiring certain information to be gathered during the renewal process.
First, as required by the NC state legislature in NCGS § 143-765, all applicants for occupational licenses, including license renewal, must disclose any investigations for employee misclassification. All applicants must certify that they have read and understand a Public Notice Statement from the Employee Classification Section of the State Industrial Commission (http://www.ic.nc.gov/121317ECSPublicNotice.pdf) and must disclose any investigations for employee misclassification. If an applicant does not provide the certification and disclosure, the NC Real Estate Commission is not permitted to process the application or renew the license. The certification and disclosure have been added into the online renewal program.
Second, Commission rule 58A .0503 now requires Brokers-in-Charge to disclose information regarding trust account(s) and criminal convictions or disciplinary actions. These questions, too, have been added to the online renewal program.
If you have been in the practice of renewing by phone or sending checks by mail for your renewal fee, please be aware that these options will not be available in 2019. Online renewal will be required. Detailed instructions will be provided on the Commission’s website and in the Bulletin to assist you during the renewal period. Also, Commission Staff will be happy to answer your questions regarding the process by phone (919.875.3700) or in person at the Commission office.
This article came from the October 2018-Vol49-2 edition of the bulletin.
Rachel E. Rogers of Fayetteville, a second year law student at Campbell University, is the recipient of the Allan R Dameron Legal Internship Award. Rogers received the award at the Commission’s June meeting.
The award is given annually in memory of and tribute to former Commission Chairman Allan R. Dameron for his dedicated service to protect the interests of consumers.
This article came from the October 2018-Vol49-2 edition of the bulletin.
Three North Carolina brokers recently received scholarships from the Commission for academic excellence in real estate courses.
The recipients, each of whom received $400 for tuition, are Michael J. Shelton, Winston-Salem, the Joe Schweidler Memorial Scholarship Award; Melinda G. Pope, Liberty, the Blanton Little Memorial Scholarship Award; and Mike G. Montpetit, Cary, the Phillip T. Fisher Scholarship Award.
Shelton and Pope were selected by the North Carolina Association of REALTORS® for achievement in the Graduate REALTORS® Institute (GRI) program. Montpetit was selected by the North Carolina Chapter of the Council of Residential Specialists for achievement in the Certified Residential Specialists (CRS) program. Little and Schweidler were former Secretary-Treasurers of the North Carolina Real Estate Licensing Board. Fisher was Executive Director of the Real Estate Commission from 1981 to 2010.
This article came from the October 2018-Vol49-2 edition of the bulletin.
By Charlie Moody, Legal Counsel
North Carolina law has long required individuals, partnerships, LLCs, and corporations that engage in business under an assumed name to file a certificate with the register of deeds in the county in which that person or entity does business.
Similarly, Commission Rule 58A .0103(c) requires a broker or firm to file such a certificate in compliance with GS 66-71.4 AND notify the Commission in writing of the use of such assumed name.
What is an “Assumed Business Name”? For example, when an individual broker/sole proprietor named Alex advertises as Robinson Realty, Alex is not using an assumed name because Robinson Realty includes the broker’s surname.
If Alex Robinson instead advertises brokerage services (with business cards, ads, etc.) under the name “Luxury Homes 4U Realty,” Alex is now using an assumed business name and must comply with the statute and Commission rule.
Similarly, a licensed firm has a corporate name under which it is registered to do business with the Secretary of State but may choose to advertise under one or several assumed names. “Team One Property Management” and “Team One Realty” might be two assumed names (or “trade names”) used by ABC Corporation for branding purposes. Both assumed business names must be filed with the State and the Commission must be notified of their use to assist consumers in finding the actual entity/broker with whom they are dealing.
On December 1, 2017, the legislature repealed Chapter 66, Article 14 and enacted Article 14A, the “Assumed Business Names Act.” This change modernized the assumed business name process to make it easier to register, find, and maintain assumed name information. The new Act altered the requirements for the assumed business name certificate and created the means by which a single registration in the office of one Register of Deeds can be made effective for multiple counties.
Filers will need to identify which counties they will be doing business in or check the box for “All 100 counties.” The certificates are then recorded and indexed in identified counties and scanned certificate images are transmitted by the Register of Deeds to the NC Secretary of State for entry into a single, statewide searchable database maintained by the Secretary at http://www.sosnc.gov/abn/search. The Secretary assigns an identification number to each assumed business name that is recorded, and to which any future amendments or withdrawals must refer.
Certificates filed before December 1, 2017 are still valid, at least for now. The Act allows for a five-year transitional period during which individuals and entities with pre-existing assumed business names can re-file a certificate to preserve the effectiveness of the name designation. Filers have until December 1, 2022 to re-file a certificate for a pre-existing assumed name. Remember also that filers of assumed business names must update the filings within 60 days of the information changing.
Compliant blank certificate forms are available from registers of deeds or may be downloaded from https://edpnc.com/start-or-grow-a-business/start-a-business/business-forms/.
Go to the Secretary of State website to find additional information about when, how and why to file an Assumed Business Name: https://www.sosnc.gov/divisions/business_registration/assumed_business_names.
This article came from the October 2018-Vol49-2 edition of the bulletin.
Stephen L. Fussell, Chief Consumer Protection Officer
The term, “As Is,” means that a seller has decided in advance of soliciting offers that he or she will not make any repairs to the listed property. Disclosing this decision to prospective buyers puts them on notice that the seller will not make any repairs regardless of the results of inspections. However, it should not discourage prospective buyers from ordering inspections as doing so is a prudent means for determining the true condition of a property. One misconception is that when a seller notes “As Is” on a property, the buyer has no right to inspect. The NC Realtors Standard Form Offer to Purchase and Contract (No. 2-T) specifically gives the buyer the right to conduct their due diligence and order relevant inspections.
There is no State law or Commission rule compelling sellers to make repairs. Moreover, Section 4(c) of the NC Realtors Contract 2-T reads in part, “Buyer acknowledges and understands that unless the parties agree otherwise, THE PROPERTY IS BEING SOLD IN ITS CURRENT CONDITION.” With that said, many sellers are willing to make at least some repairs as a means of facilitating a sale. If every seller refused to make repairs, then many transactions would fail to close for that reason. NC Realtors created the Due Diligence Request and Agreement (“DDRA”) form (No. 310-T) for buyers and sellers to identify the repairs they agree upon. Once all parties sign this form, the seller then has an obligation to make the repairs listed on the form.
Another common misconception is that selling a property “As Is” gives a seller and/or a listing agent the opportunity to conceal material facts about the property. While a seller can always answer “No Representation” to any question on the Residential Property and Owners’ Association Disclosure Statement (“RPOADS”), a seller who answers “No” to a question when the truthful answer is “Yes,” may face civil liability for his/her misrepresentation.
Real estate brokers, including those brokers who are selling their own properties, must always disclose material facts. A listing agent has the duty to discover and disclose material facts. The Commission holds brokers responsible for the information they know or reasonably should know about or relating to a property. Therefore, even if a seller fails to disclose a material defect on an RPOADS, the listing agent must disclose it to prospective buyers or their agents prior to the formation of sales contracts. If a seller indicates he/she does not want a listing agent to disclose a material fact, then the listing agent should decline to list the seller’s property.
This article came from the October 2018-Vol49-2 edition of the bulletin.
By Charlie Moody, Legal Counsel
On August 15, 2018, the US Department of Justice indicted a Minnesota real estate broker, his wife, and their real estate firm on multiple counts of mail and wire fraud.
Broker Jeffrey Detloff managed and sold foreclosed properties on behalf of institutional clients and worked with his wife, Lori, an accountant.
The couple are alleged to have carried out a multi-year scheme to defraud corporate and institutional clients including Fannie Mae and Freddie Mac by collecting kickbacks from independent contractors for repairs.
The couple allegedly created and submitted sham bids to create a false appearance of competitive bidding for projects, and awarded contracts only to contractors who were willing to pay a kickback.
The couple faces up to 30 years in jail and a fine of up to $1 million. The fine may be increased up to twice the gain derived from the crime or the loss suffered by the victims. One housing repair contractor has already pled guilty in connection with the investigation.
This article came from the October 2018-Vol49-2 edition of the bulletin.
ALICIA DAWN ALTMAN (Sunset Beach) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Altman effective July 18, 2018. The Commission dismissed without prejudice allegations that Ms. Altman violated provisions of the Real Estate License Law and Commission rules. Ms. Altman neither admitted nor denied misconduct.
ROBERT LORENZO ARRIAGA (Cary) – By Consent, the Commission suspended the broker license of Mr. Arriaga for a period of 36 months effective December 1, 2017. Six months of the suspension were active with the remainder stayed for a probationary period from June 1, 2018 to December 1, 2020. The Commission also prohibited Mr. Arriaga from acting as a broker-in-charge, engaging in property management, and accepting or holding trust monies belonging to others for a period of five years. The Commission found that Mr. Arriaga, the qualifying broker and broker-in-charge of a property management firm, received compensation for a maintenance referral without disclosuring to his principal, improperly applied the tenant security deposit to various expenses, failed to provide the tenant with an accounting, and failed to provide documents requested by the Commission. A Commission review of his tenant security deposit account found that cancelled checks and deposit tickets lacked the required identifying information and were not properly retained funds, were used for Mr. Arriaga’s personal benefit, a journal and separate ledger sheets were not maintained, an audit trail was lacking, and a shortage was present. A review of his rental deposits account found that it contained an overage and that some owners were being overpaid, causing deficit spending.
WAYNE T. BARBOUR (Dunn) – By Consent, the Commission suspended the broker license of Mr. Barbour for a period of three months effective November 1, 2018. The Commission then stayed the suspension on certain conditions. The Commission found that Mr. Barbour as Qualifying Broker and Broker-in-Charge of a licensed real estate firm in and around October 2016, acted as buyer agent in a transaction with a provisional broker serving as the exclusive listing agent. Mr. Barbour submitted an offer to purchase on behalf of the buyer without first entering into a written agency agreement or presenting a Working With Real Estate Agents brochure. Neither Mr. Barbour nor his firm had permission from the buyer to act as dual agent. The subject property’s heated square footage was also negligently misrepresentated in the MLS.
WILLIAM F. BELLAMY (North Myrtle Beach, South Carolina) – By Consent, the Commission suspended the broker license of Mr. Bellamy for a period of six months effective November 1, 2018. The Commission then stayed the suspension for a probationary period through May 1, 2019. The Commission found that Mr. Bellamy entered into a listing agreement for a property and failed to obtain a buyer agency agreement, but purported to act as dual agent for the transaction without authorization from the seller or buyer to perform dual agency.
VALERIA MARIA CARRIZO WYDA (Asheville) – By Consent, the Commission reprimanded Ms. Carrizo Wyda effective September 25, 2018. The Commission found that Ms. Carrizo Wyda was the listing agent for a property and received reports noting limited accessibility of the crawl space and issues with the property’s foundation. Although Ms. Carrizo Wyda disclosed this information to some subsequent interested buyers, this information was not disclosed to the buyer who went under contract. This buyer later terminated the contract after discovering these issues.
SABRINA HORTENSE CHARLESTON-MILES (Raleigh) – Following a hearing, the Commission permanently revoked the license of Ms. Charleston-Miles, effective July 31, 2018. The Commission found that Ms. Charleston-Miles acted as a dual agent in transactions when she was not authorized to do so, advertised real property for sale without having an executed listing agreement, failed to provide and review a copy of the publication “Working with Real Estate Agents” with prospective buyers or sellers at first substantial contact, failed to ensure that her buyer clients submitted all due diligence fees and earnest money deposits in accordance with the purchase contract, failed to notify Commission staff of her updated contact information, failed to timely communicate with other agents involved in transactions, required “cash only” offers on a property she listed for sale without her seller client’s consent, failed to properly and timely deliver a copy of an executed listing agreement pursuant to a court order, failed to communicate with Commission staff during the investigation, and misrepresented to the Commission that she was represented by an attorney whom she, in fact, had not retained.
COMPASS REAL ESTATE GROUP LLC (Huntersville) – By Consent, the Commission permanently revoked the firm license of Compass Real Estate Group effective September 5, 2018. The Commission found the firm’s trust accounts were not labeled “trust” or “escrow”, entrusted funds were commingled and converted to the personal use of the broker, deficit spending, failure to perform monthly reconciliations, lack of a trial balance, lack of required documentation, and a shortage. The investigation also discovered that Compass Real Estate Group was administratively dissolved by the NC Secretary of State from January 14, 2016 through June 16, 2016, and that it failed to notify the Commission.
CROWN REALTY INC. (Fayetteville) – By Consent, the Commission permanently revoked the firm license of Crown Realty Inc., effective August 29, 2018. The Commission found that Crown Realty, a property management firm, failed to maintain trust account records in compliance with Commission rules. Crown Realty deposited rent proceeds into its operating account and issued 32 non-sufficient funds checks to owner-clients from its operating account, causing the owner-clients to incur bank service fees. An audit showed a trust account shortage of at least $14,663.
DEBORAH L. DOSS (Thomasville) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Doss effective August 15, 2018. The Commission dismissed without prejudice allegations that Ms. Doss violated provisions of the Real Estate License Law and Commission rules. Ms. Doss neither admitted nor denied misconduct.
ELLIS BARBOUR & SONS, INC. (Dunn) – By Consent, the Commission suspended the firm license of Ellis Barbour & Sons for a period of three months effective November 1, 2018. The Commission then stayed the suspension on certain conditions. The Commission found that Ellis Barbour & Sons, in and around October 2016, acted as dual agent for a transaction with a provisional broker serving as the exclusive listing agent and the BIC as the buyer agent. An offer to purchase was submitted without the firm first entering into a written agency agreement or presenting a Working With Real Estate Agents brochure. Ellis Barbour & Sons did not have permission from the buyer to act as dual agent. The heated square footage was also negligently misrepresented in the MLS.
PATRICIA GONZALEZ (Fayetteville)- Following a hearing, the Commission permanently revoked the broker license of Patricia Gonzalez effective August 7, 2018. The Commission found that Ms. Gonzalez practiced real estate after her broker license was suspended by the Commission in a prior case, that she failed to remit rental proceeds and a tenant security deposit to her client, and that she converted trust money to personal use.
ROBERT SANFORD GOSNELL JR. (Hendersonville) – By Consent, the Commission suspended the broker license of Mr. Gosnell for a period of 16 months effective May 9, 2018. The Commission then stayed the suspension for a probationary period from May 10, 2018 through September 10, 2019. The Commission found that Mr. Gosnell timely reported his August 31, 2017 conviction of Aggravated Level I DWI, served 120 days in jail, received 24 months of supervised probation and is currently in full compliance with all court ordered restrictions.
DAMIAN DAVID HALL (Tryon) – By Consent, the Commission suspended the broker license of Mr. Hall for a period of 18 months effective July 19, 2018. The Commission then stayed the suspension for a probationary period from July 19, 2018 through January 18, 2020. The Commission found that Mr. Hall failed to provide property management records to the Commission’s investigator. An audit of the firm’s records found that deposit slips were not designated as “trust” or “escrow”, agency agreements did not identify the broker’s license number, and security deposits were not deposited within three days of receipt. The firm continued to operate from July 2016 through June 2017 despite being issued a revenue suspension by the North Carolina Secretary of State. Mr. Hall is restricted from further property management.
HD REALTY LLC (Mount Holly) – The Commission accepted the permanent voluntary surrender of the firm license of HD Realty effective July 18, 2018. The Commission dismissed without prejudice allegations that HD Realty violated provisions of the Real Estate License Law and Commission rules. HD Realty neither admitted nor denied misconduct.
INTRACOASTAL REALTY CORPORATION (Wrightsville Beach) – By Consent, the Commission reprimanded Intracoastal Realty effective July 18, 2018. The Commission found that Intracoastal was notified that a waterproofing project was approved at an oceanfront condominium complex where the firm managed rental properties. A tenant reserved one of the condominiums for a month but the firm failed to notify the tenant that the project could affect her ability to use the condo’s balcony. The firm refunded a significant portion of the tenant’s rental amount.
HOLLY MARIE LAM (Mount Holly) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Lam effective July 18, 2018. The Commission dismissed without prejudice allegations that Ms. Lam violated provisions of the Real Estate License Law and Commission rules. Ms. Lam neither admitted nor denied misconduct.
LANEY REAL ESTATE (Wilmington) – By Consent, the Commission suspended the firm license of Laney Real Estate until September 1, 2018 on certain conditions including requiring the deposit of $77,432.19 into its tenant security deposit trust account and providing sufficient evidence to the Commission to demonstrate that the trust account was fully funded and balanced. The Commission found that in June 2018, a total of $77,432.19 was transferred from Laney Real Estate’s tenant security deposit trust account to pay a non-client legal order.
DAVID MAYO (Fayetteville) – By Consent, the Commission permanently revoked the broker license of Mr. Mayo effective August 29, 2018. The Commission found that Mr. Mayo, as broker-in-charge, failed to maintain trust account records in compliance with Commission rules. Instead of depositing rent proceeds into the trust account, Mr. Mayo deposited the rent proceeds into his operating account. Mr. Mayo issued 32 non-sufficient funds checks to owner-clients from his operating account, causing the owner-clients to incur bank service fees. An audit showed a trust account shortage of at least $14,663.
CAREY MARIE MCMULLEN (Wrightsville Beach) – By Consent, the Commission reprimanded Ms. McMullen effective July 18, 2018. The Commission found that Ms. McMullen, as broker-in-charge, of Intracoastal Realty Corporation, was notified that a waterproofing project was approved at an oceanfront condominium complex where the firm managed rental properties. A tenant reserved one of the condominiums for the month but the firm failed to notify the tenant that the project could affect her ability to use the condo’s balcony. The firm refunded a significant portion of the tenant’s rental amount.
HOWARD JOSE MORGAN (Greensboro) – By Consent, the Commission suspended the broker license of Mr. Morgan for a period of 18 months effective December 1, 2017. Four months of the suspension were active with the remainder stayed for a probationary period from April 1, 2018 to June 1, 2019. The Commission found that Mr. Morgan failed to maintain a journal and ledger, failed to perform monthly reconciliations, and used of unapproved financial software programs, which caused a lack of an audit trail and overages in the tenant security deposit account.
ROBERT EDWARD ROBBINS (Laurinburg) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Robbins effective May 9, 2018. The Commission dismissed, without prejudice, allegations that Mr. Robbins violated provisions of the Real Estate License Law and Commission rules. Mr. Robbins neither admitted nor denied misconduct.
WILLIAM FREDERICK SCHNEIDER (Charlotte) – By Consent, the Commission reprimanded Mr. Schneider effective June 15, 2018. The Commission found that Mr. Schneider, a broker-in-charge, entered into a residential lease with a tenant. Due to the lease terms and Mr. Schneider’s acceptance of a full month’s rent payment on the 15th, the tenant believed payments were due by the 15th of each month. Mr. Schneider mistakenly notified the tenant that she was in arrears with rent payments. Mr. Schneider caused further confusion at lease termination by referencing different lease termination dates, and charged rent against the tenant’s tenant security deposit for a period where the tenant should not have been responsible for rent.
JEAN I. SKELCY (Tryon) – By Consent, the Commission suspended the broker license of Ms. Skelcy for a period of 12 months effective June 1, 2018 and restricted her from further engagement in property management. The Commission then stayed the suspension for a probationary period from June 1, 2018 to May 31, 2019. The Commission found that Ms. Skelcy, a broker-in-charge, failed to provide all requested property management documents to the Commission and failed to designate “trust” or “escrow” on deposit slips, failed to identify the broker’s license number on agency agreements, and failed to deposit security deposits within three days of receipt. The firm also continued to operate from July 2016 through June 2017, despite being issued a revenue suspension by the NC Secretary of State.
TRINA C. STRICKLAND (Tabor City) – By Consent, the Commission suspended the broker license of Ms. Strickland for a period of six months effective November 1, 2018. The Commission then stayed the suspension effective November 1, 2018. The Commission found that Ms. Strickland acted as a dual agent in a sales transaction and attempted to use a standard form “Offer to Purchase and Contract”, “Buyer Possession Before Closing Agreement”, and “Additional Provisions Addendum” to broker a contract for deed transaction. Ms. Strickland managed the subject property without first executing a property management agreement and without having a signed lease agreement. Ms. Strickland, after collecting rent, did not deposit rental proceeds in a trust account before remitting the rental proceeds to the owner.
WFS PROPERTIES LLC (Charlotte) – By Consent, the Commission reprimanded WFS Properties effective June 15, 2018. The Commission found that in July 2015, WFS Properties entered into a residential lease with a tenant, and due to the lease terms and WFS Properties’ acceptance of a full month’s rent payment on the 15th, the tenant believed payments were due by the 15th of each month. WFS Properties notified the tenant that she had to pay on the 1st of each month and mistakenly notified her that she was in arrears. WFS Properties caused further confusion at lease termination by referencing different lease termination dates and charged rent against the tenant’s tenant security deposit for a period where the tenant should not have been responsible for rent.
BRYAN GREGORY YURKO (Raleigh) – By Consent, the Commission reprimanded Mr. Yurko effective November 1, 2018. The Commission found that in 2013, Mr. Yurko, acting as listing agent for a property serviced by a septic tank, advertised the home as having four bedrooms based on the seller’s representation, and failed to verify the septic permit. When listing the property in 2017, the buyer discovered that the home was permitted for only three bedrooms.
This article came from the October 2018-Vol49-2 edition of the bulletin.