Three North Carolina brokers received scholarships from the Commission at its July meeting for academic excellence in real estate courses.
Anne Wilson Hult, Swansboro, received the Blanton Little Memorial Scholarship from then Commission Chair Cindy S. Chandler and then Vice Chair (now Chair) George Bell.
Michael William Stearns, Charlotte (left), received the Phillip T. Fisher Scholarship, which was presented by Fisher, Commission Executive Director from 1981 to 2010.
Zoltan Desi, Etowah, not present, received the Joe Schweidler Memorial Scholarship. Little and Schweidler were former Secretary-Treasurers.
Winners received reimbursement of course tuition fees. Desi and Hult were selected by the North Carolina Association of REALTORS® for achievement in the Graduate Realtor® Institute (GRI) program. Stearns was selected by the North Carolina chapter of the Council of Real Estate Specialists for achievement in the Certified Residential Specialists (CRS) program.
This article came from the October 2016-Vol47-2 edition of the bulletin.
The North Carolina Real Estate Commission monitors applicant performance on the license examination and regularly reports this information to schools and instructors. In particular, the Commission uses information about the performance of applicants who are taking the license examination for the first time in order to assure that quality instruction is being provided in prelicensing courses by schools and instructors. The most recent performance record for each school can be found on the Commission’s website at https://www.ncrec.gov/Pdfs/Schools/LicExamPerfRep.pdf.
The overall examination performance for all first-time candidates taking the comprehensive real estate examination for the license year July 1, 2015 – June 30, 2016 was 54%. The Commission congratulates each of the following schools and instructors for achieving an outstanding examination performance record of 80% or higher during the most recent annual reporting period. The Commission recognizes that to have students perform at such a level on the license examination requires a combination of high quality instruction and high course completion standards.
School
Alamance Community College, Graham; Lenoir Community College, Kinston; Pitt Community College, Greenville; Carteret Community College, Morehead City; Gaston College, Dallas; Weichert, Realtors-Mark Thomas Properties Real Estate School, Durham; Terry Farr Real Estate School, Fayetteville; Cape Fear Community College, Castle Hayne; Sandhills Community College, Pinehurst.
Instructors
Kandyce Ellis, Michelle Fordham, Larry Lee, Elizabeth O’Neal, James Weese, Christine Darden, Violet Harrington, Jo Ann LaVecchia, Ben Wirtz, Leslie Hughes, Laurel Pettys, Christopher Bartlett, Allan Nanney, Jr.
This article came from the October 2016-Vol47-2 edition of the bulletin.
ALL AMERICAN ASSOCIATES REALTY LLC (Hubert) – By Consent, the Commission permanently revoked the firm license of All American Associates Realty effective July 20, 2016. The Commission found that All American Associates Realty failed to provide monthly statements and receipts justifying expenses to property owners; that All American Associates Realty failed to deposit and maintain security deposits and rental proceeds in a trust account; that All American Associates Realty failed to maintain trust account records in compliance with Commission Rules; that All American Associates Realty failed to respond to letters of inquiry sent by Commission staff; and that All American Associates Realty failed to provide transaction records to Commission staff for inspection.
TRACY LEE ANDERSON (North Wilkesboro) – By Consent, the Commission suspended the broker license of Mr. Anderson for a period of 24 months effective June 22, 2016. Three months of the suspension will be active with the remainder stayed for 21 months. The Commission found that Mr. Anderson timely reported his January 2015 North Carolina felony conviction of Possession of Marijuana; that Mr. Anderson received thirty-six (36) months of supervised probation, was ordered to complete 40 hours of community service and was required to undergo a substance abuse assessment; that Mr. Anderson timely reported his February 2016 Texas felony convictions of Possession of Marijuana and Possession of a Controlled Substance, which stemmed from the same incident above; that Mr. Anderson received a forty-eight (48) month term of community supervision on a deferred judgment and was ordered to pay $5,000 in fines and costs; and that Mr. Anderson currently does not have any pending criminal charges.
RANDY A. BARNES (Wilson) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Barnes effective June 22, 2016. The Commission dismissed without prejudice allegations that Mr. Barnes violated provisions of the Real Estate License Law and Commission rules. Mr. Barnes neither admitted nor denied misconduct.
VICTOR ALAIN BARREIRO (Durham) – By Consent, the Commission suspended the broker license of Mr. Barreiro for a period of 12 months effective July 1, 2016. The Commission then stayed the suspension for a probationary period ending July 1, 2017. The Commission found that Mr. Barreiro on July 30, 2013, was convicted of Reckless Driving to Endanger; that on March 5, 2015, Mr. Barreiro pleaded guilty to Misdemeanor Domestic Violence Protective Order Violation; and that Mr. Barreiro failed to disclose both the conviction and the guilty plea to the Commission within 60 days.
WILBUR L. BECK, JR. (Fayetteville) – By Consent, the Commission suspended the broker license of Mr. Beck for a period of 18 months effective March 1, 2016. Three months and 13 days were active with the remainder stayed for a probationary period ending September 1, 2017. The Commission found that Mr. Beck conducted property management and real estate brokerage services through a sole proprietorship; that Mr. Beck was previously reprimanded by the Commission in other cases for failure to maintain records of all receipts and disbursements of others in such a manner as to create a clear audit trail; that in and around 2015, a trust account audit showed a shortage of at least $29,000 in Mr. Beck’s trust account; and that Mr. Beck failed to timely remit rental proceeds to his landlord-client and failed to maintain accurate records in accordance with Commission trust account rules. The Commission noted that Mr. Beck has since fully funded the shortage in the trust account to the satisfaction of the Commission and has agreed not to act as broker-in-charge or have signature authority of a trust account in the future.
SPENCER T. BENSCH (Matthews) – By Consent, the Commission suspended the broker license of Mr. Bensch for a period of 18 months effective September 1, 2016. Six months of the suspension are active with the remainder stayed. The Commission found that Mr. Bensch, in and around July 2015, and acting as an on-site real estate broker for a licensed builder, forged the builder’s initials on a page in the offer to purchase; then substituted the original page, which contained a range of construction completion dates with the forged page; and that Mr. Bensch stated that his purpose in substituting the forged page was to assist the buyer in school registration. The Commission noted that Mr. Bensch volunteered his commission to compensate the buyer for relocation costs due to the extended completion date and the buyer has been fully reimbursed.
BURCH PROPERTY MANAGEMENT LLC (Fayetteville) – By Consent, the Commission permanently revoked the firm license of Burch Property Management effective July 1, 2016. The Commission found that Burch Property Management, through its qualifying broker and broker-in-charge, failed to maintain trust account records in accordance with the Real Estate License Law and Commission rules, failed to safeguard trust money belonging to others, engaged in deficit spending from the trust account, failed to provide trust account documentation to Commission staff despite numerous requests, and failed to remit tenant security deposits in a timely manner.
CAROLINAS METRO REALTY LLC (Charlotte) – By Consent, the Commission reprimanded Carolinas Metro Realty effective July 1, 2016. The Commission found that in October 2014, a broker licensed in South Carolina, but not in North Carolina, affiliated with the firm and represented that she would obtain a North Carolina license by the end of 2014; that the broker was never licensed in North Carolina, yet, between October 2014 and May 2015, the unlicensed broker showed and leased rental properties in North Carolina; and that the firm received and held $27,932.50 in rental commissions for the broker in anticipation of licensure. The Commission noted once the firm was informed that the broker could not be paid the commissions even after licensure in North Carolina, it reimbursed the full amount.
PASQUALE CARUSO (Hubert) – By Consent, the Commission permanently revoked the broker license of Mr. Caruso effective July 20, 2016. The Commission found that Mr. Caruso failed to provide monthly statements and receipts justifying expenses to property owners; that Mr. Caruso failed to deposit and maintain security deposits and rental proceeds in a trust account; that Mr. Caruso failed to maintain trust account records in compliance with Commission Rules; that Mr. Caruso failed to respond to Letters of Inquiry sent by Commission staff; and that Mr. Caruso failed to provide transaction records to Commission staff for inspection.
COMPASS BUILDING & REALTY LLC (Mooresville) – The Commission accepted the permanent voluntary surrender of the firm license of Compass Building & Realty effective August 17, 2016. The Commission dismissed without prejudice allegations that Compass Building & Realty violated provisions of the Real Estate License Law and Commission rules. Compass Building and Realty neither admitted nor denied misconduct.
PATRICK S. CRAWFORD (Raleigh) – By Consent, the Commission suspended the license of Mr. Crawford for a period of 24 months effective October 1, 2016. The Commission then stayed the suspension for a probationary period from October 1, 2016 through September 30, 2018. The Commission found that Mr. Crawford, acting as the qualifying broker and broker-in-charge of a real estate brokerage firm, managed an occupied residential building (“the property”) and also acted as co-listing agent during its sale; that in September 2014, during the due diligence period, a water test was performed on the well which tested positive for coliform bacteria and the buyer requested copies of current leases for the tenants of the property; that some of the tenant leases contained the phrase “do not drink” where it mentioned water as the utility; that this phrase was written into the leases by Mr. Crawford, unbeknownst to the property owner; that the buyer later terminated the purchase contract; that Mr. Crawford failed to notify the tenants and failed to notify the property owner of the September 2014 well water test; and that the property owner did not begin treatment of the well until January 2016.
LINDA CAROL EPLEY (Maysville) – By Consent, the Commission reprimanded Ms. Epley effective October 1, 2016. The Commission found that in January 2014, Ms. Epley listed property she and her husband owned for sale. Ms. Epley filled out the North Carolina Residential Property Owners’ Association Disclosure Statement by making “no representation.”
STEPHEN ALBERT EPLEY (Maysville) – By Consent, the Commission reprimanded Mr. Epley effective October 1, 2016. The Commission found that in January 2014, Mr. Epley listed property he and his wife owned for sale. Mr. Epley filled out the North Carolina Residential Property Owners’ Association Disclosure Statement by making “no representation.”
FOXFIRE REALTY SERVICES LLC (Foxfire Village) – By Consent, the Commission suspended the firm license of Foxfire Realty Services for a period of 18 months effective July 1, 2016. The Commission then stayed the suspension for a probationary period ending January 1, 2018. The Commission found that on August 29, 2014, one of firm’s property owner clients died and from September 2014 until March 2015 the firm collected rental proceeds from the deceased’s properties and deposited them into its operating account; that Foxfire Realty Services paid the balance of the deceased’s rental proceeds to the attorney for the estate in March 2015; and that Foxfire Realty Services failed to maintain its trust account and trust account records in compliance with the Real Estate License Law and Commission rules.
LOWELL RUSSELL GASAWAY (Whittier) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Gasaway effective June 22, 2016. The Commission dismissed without prejudice allegations that Mr. Gasaway violated provisions of the Real Estate License Law and Commission rules. Mr. Gasaway neither admitted nor denied misconduct.
MARY CATHERINE KELLY (Apex) – By Consent, the Commission reprimanded Ms. Kelly effective September 20, 2016. The Commission found that Ms. Kelly was the agent for the buyers of a residential property in August 2013, and some of the wells of the homes in the neighborhood had recently tested positive for TCE, a known carcinogen; that the well of the subject property was tested and did not show the presence of TCE; that, nevertheless, the North Carolina Department of Environment and Natural Resources allowed a company, Aqua, to construct a water main extension to all of the homes in the neighborhood and allowed owners to connect to those facilities at a discounted rate of $500 before November 2013; that the listing agent for the subject property attached the well test results and the letter from Aqua about the connection deadline to the MLS listing; that Ms. Kelly reviewed these documents, but failed to deliver them to her buyer clients; that Ms. Kelly maintains that she told her buyer clients that the well on the property was not contaminated and that water was available at the street, but the buyers do not recall this conversation; and that after closing, the buyers were informed by their neighbors about the contaminated wells in the neighborhood and now must pay $1,700 to connect to the Aqua utilities since they missed the deadline for the discounted rate.
LEATHERWOOD RENTALS INC (Ferguson) – By Consent, the Commission suspended the firm license of Leatherwood Rentals for a period of 12 months effective April 1, 2016. The Commission then stayed the suspension for a probationary period of 12 months. The Commission found that Leatherwood Rentals failed to maintain trust account records, in compliance with Commission Law and rules; that Leatherwood Rentals earned a commission for selling security deposit insurance but failed to disclose the commission to either renters or the firm’s property owner clients; that Leatherwood Rentals deposited trust monies into an interest bearing account but failed to first obtain written authorization from its property owner clients; that the vacation rental agreements used by Leatherwood Rentals did not contain a recitation of the rights and obligations of tenants and firm as required by the Real Estate License Law and improperly identified the bank at which rental payments were deposited; and that the management agreements utilized by Leatherwood Rentals did not contain required anti-discrimination language and did not include a broker’s license number.
PAMELA J. MCCLURE (Pelham, Alabama) – By Consent, the Commission suspended the broker license of Ms. McClure for a period of six months effective July 1, 2016. One month of the suspension was active with the remainder stayed. The Commission found that Ms. McClure, a licensed North Carolina real estate broker, in and around June 2015, acting as a broker-in-charge failed to actively and directly supervise two provisional brokers affiliated with her firm; that Provisional Broker A lives approximately 395 miles from Ms. McClure’s North Carolina firm and Provisional Broker B lives approximately 100 miles from Respondent’s North Carolina firm; that Ms. McClure herself resides in Georgia, 100 miles from the North Carolina firm; that Ms. McClure failed to respond to multiple Letters of Inquiry and mostly communicates with brokers and staff via telephone and drop box; and that Ms. McClure failed to maintain her firm’s transaction files in full compliance with Commission rules.
MARIO ANTONIO MITCHELL (Charlotte) – By Consent, the Commission reprimanded Mr. Mitchell effective July 1, 2016. The Commission found that on January 22, 2015, the Virginia Department of Professional and Occupational Regulation (DPOR) revoked Mr. Mitchell’s Virginia real estate license and imposed a fine of $2,250. The Commission noted that the basis of the DPOR’s action was a business deal in which Mr. Mitchell was a principal and Mr. Mitchell’s failure to update his personal information not for his actions as a real estate broker.
ALMETTA WANETTA MOORE (Fayetteville) – By Consent, the Commission permanently revoked the broker license of Ms. Moore effective July 1, 2016. The Commission found that Ms. Moore, acting as the qualifying broker and broker-in-charge of Burch Property Management failed to maintain trust account records in accordance with the Real Estate License Law and Commission rules, failed to safeguard trust money belonging to others, engaged in deficit spending from her firm’s trust account, failed to provide trust account documentation to Commission staff despite numerous requests, and failed to remit tenant security deposits in a timely manner.
GARY RICHARD NUNES (Burnsville) By Consent, the Commission suspended the broker license of Mr. Nunes for a period of 18 months effective January 13, 2016. The Commission found that Mr. Nunes conducted property management services and was qualifying broker of a licensed real estate brokerage firm; that from July 1, 2014, until September 11, 2015, Mr. Nunes operated the firm, maintained money belonging to others in trust accounts, and advertised services without a broker-in-charge; that Mr. Nunes failed to maintain trust account records compliant with Commission rules; and that Mr. Nunes’ vacation rental agreements did not comply with the North Carolina Vacation Rental Act.
BECKIE LEE PAHNER (Foxfire Village) – By Consent, the Commission suspended the broker license of Ms. Pahner for a period of 18 months effective July 1, 2016. The Commission then stayed the suspension for a probationary period ending January 1, 2018. The Commission found that Ms. Pahner acted as the qualifying broker and broker-in-charge of a licensed real estate brokerage firm; that, on August 29, 2014, one of Ms. Pahner’s property owner clients died and from September 2014 until March 2015, Ms. Pahner collected rental proceeds from the deceased’s properties and deposited them into her operating account; that Ms. Pahner paid the balance of the deceased’s rental proceeds to the attorney for the estate in March 2015; and that Ms. Pahner failed to maintain her firm’s trust account and trust account records in compliance with the Real Estate License Law and Commission rules.
PATRICK PROPERTIES INC. (Raleigh) – By Consent, the Commission suspended the license of Patrick Properties for a period of 24 months effective October 1, 2016. The Commission then stayed the suspension for a probation period from October 1, 2016 through September 30, 2018. The Commission found that Patrick Properties managed an occupied residential building (“the property”) and also acted as co-listing agent during its sale; that in September 2014, during the due diligence period, a water test was performed on the well which tested positive for coliform bacteria and the buyer requested copies of current leases for the tenants of the property; that some of the tenant leases contained the phrase “do not drink” where it mentioned water as the utility; that this phrase was written into the leases by the agent, unbeknownst to the property owner; that the buyer later terminated the purchase contract; that Patrick Properties failed to notify the tenants and failed to notify the property owner of the September 2014 well water test; and that the property owner did not begin treatment of the well until January 2016.
PROPERTY MANAGEMENT EXPERTS, INC. (Charlotte) – By Consent, the Commission permanently revoked the firm license of Property Management Experts effective July 21, 2016. The Commission found that Property Management Experts managed a property and at the end of the tenant’s initial term placed the tenant on a month-to-month lease despite the client’s request for an 8-month lease; that in November 2013, the landlord gave notice of termination to Property Management Experts via email and requested that the tenant security deposit (“TSD”) be returned; that, despite multiple requests, Property Management Experts failed to return the TSD until February of 2014; that, furthermore, Property Management Experts deducted the agreed-upon early termination fee of $270 from the TSD; that an audit was performed on Property Management Experts’ trust accounts and the auditor found: that some accounts were not designated to be “trust” or “escrow”, despite containing rent deposits and property owner disbursements; evidence of previous shortages; that Property Management Experts failed to maintain ledgers, journals, a check register, and failed to make monthly reconciliations; and evidence of comingling. The Commission noted that, at the time of the audit, the balances in the trust accounts were adequate to cover the security deposits balance because a large deposit was made into the account three days before the auditor’s scheduled visit.
RAINA EUNICE PURVIS fka RAINA EUNICE PELZER (Charlotte) – By Consent, the Commission suspended the broker license of Ms. Purvis for a period of 24 months effective July 21, 2016. The Commission then stayed the suspension on certain conditions for a probationary period from July 21, 2016 through July 20, 2018 and prohibited Ms. Purvis from acting as a broker-in-charge and engaging in property management for a period of three years. The Commission found that Ms. Purvis, acting as the qualifying broker and broker-in-charge of a licensed real estate firm, managed a property and, at the end of the tenant’s initial term, placed the tenant on a month-to-month lease despite the client’s request for an 8-month lease; that in November 2013, the landlord gave notice of termination to Ms. Purvis via email and requested that the tenant security deposit (“TSD”) be returned; that, despite multiple requests, Ms. Purvis failed to return the TSD until February of 2014; that, furthermore, Ms. Purvis deducted the agreed-upon early termination fee of $270 from the TSD; that an audit was performed on Ms. Purvis’ trust accounts and the auditor found: that some accounts were not designated to be “trust” or “escrow”, despite containing rent deposits and property owner disbursements; evidence of previous shortages; that Ms. Purvis failed to maintain ledgers, journals, a check register, and failed to make monthly reconciliations; and evidence of comingling. The Commission noted that, at the time of the audit, the balances in the trust accounts were adequate to cover the security deposits balance because Ms. Purvis made a large deposit into the account three days before the auditor’s scheduled visit.
CHASITY RENEE ROBBINS (Lexington) – By Consent, the Commission suspended the broker license of Ms. Robbins for a period of three months effective May 1, 2016. The Commission found that Ms. Robbins entered into a listing agreement on April 16, 2015 to sell lakefront property and agreed to advertise the property on the MLS and on the Internet; that Ms. Robbins failed to deliver the listing agreement to her broker-in-charge and failed to enter the property on the MLS system until June 25,2016; that Ms. Robbins failed to respond to two Letters of Inquiry sent by Commission staff and failed to respond to attempts by Commission staff to communicate with her by telephone and mail.
CHRISTINA MARIE SERAFINO (Cary) – By Consent, the Commission reprimanded Ms. Serafino effective September 20, 2016. The Commission found that Ms. Serafino represented out-of-state buyers of a property; that an inspection was performed for the property which revealed that the home was clad in hardboard siding rather than fiber cement, as advertised on the MLS; that Ms. Serafino failed to notify the listing agent of the difference in siding as indicated on the MLS; that the home was actually clad in hardboard siding as well as some fiber cement siding; that Ms. Serafino agreed to verify that the repair requests were completed prior to closing; and that Ms. Serafino performed a walk-through on the day of closing, but failed to review all receipts for work performed and failed to retain all copies of receipts received for her files.
ANU SHARMA (Greensboro) – By Consent, the Commission reprimanded Mr. Sharma effective September 1, 2016. The Commission found that Mr. Sharma, in and around November 2015, acted as a property manager and collected rental proceeds and tenant security deposits through an unlicensed firm; that Mr. Sharma collected rents in cash, but failed to provide a receipt or deposit the funds within three days; that Mr. Sharma failed to provide monthly statements to landlord-clients; that Mr. Sharma failed to designate himself as a broker-in-charge; and that Mr. Sharma failed to maintain a personal ledger or trial balance in compliance with Commission rules. The Commission noted that Mr. Sharma has signed a Cease and Desist Agreement on behalf of his unlicensed firm and has stopped performing property management services.
KELLY R. SMITH (Raleigh) – The Commission accepted the voluntary surrender of the broker license of Ms. Smith for a period of two years effective April 20, 2016. The Commission dismissed without prejudice allegations that Ms. Smith violated provisions of the Real Estate License Law and Commission rules. Ms. Smith neither admitted nor denied misconduct.
JONATHAN LEE WASHINGTON (Greensboro) – By Consent, the Commission revoked the broker license of Mr. Washington effective June 1, 2016. The Commission found that Mr. Washington, acting as the broker-in-charge of his own sole proprietorship, converted earnest money deposits for personal expenses; that Mr. Washington admits that he often used the earnest money deposits to cover his personal expenses; that a records inspection completed by a Commission representative found negative account balances, a number of cash withdrawals, and checks made payable to cash from Mr. Washington’s escrow account; that Mr. Washington failed to maintain trust account records and client funds in compliance with Commission rules including failure to maintain and deposit funds in a designated trust account and failing to maintain transaction records; and that the records that Mr. Washington did maintain showed forms signed incorrectly with inaccurate dates.
WESLEY DENNIS WHITSON (Ferguson) – By Consent, the Commission suspended the broker license of Mr. Whitson for a period of 12 months effective April 1, 2016. The Commission then stayed the suspension for a probationary period of 12 months. The Commission found that Mr. Whitson, acting as broker-in-charge of a real estate brokerage firm, failed to: maintain trust account records in compliance with Commission Laws and rules; that Mr. Whitson earned a commission for selling security deposit insurance but failed to disclose the commission to either renters or the firm’s property owner clients; that Mr. Whitson deposited trust monies into an interest bearing account but failed to first obtain written authorization from its property owner clients; that the vacation rental agreements used by Mr. Whitson did not contain a recitation of the rights and obligations of tenants and firm as required by the Real Estate License Law and improperly identified the bank at which rental payments were deposited; and that the management agreements utilized by Mr. Whitson did not contain required anti-discrimination language and did not include a broker’s license number.
This article came from the October 2016-Vol47-2 edition of the bulletin.
By Elizabeth W. Penney, Information Officer
Earnest money is an important part of nearly all residential real estate contracts and not something that buyers like to lose. Many brokers do not understand or thoroughly explain to their buyer clients why earnest money may not be returned to a buyer if the buyer cannot obtain loan approval and thus cannot close.
Commonly, a buyer will agree on the Offer to Purchase and Contract standard form to a “due diligence period” within which to secure financing, conduct inspections of the property to be purchased, and inquire about any other matters important to the buyer. Within that period, established in the contract with the seller usually by a negotiated payment of a due diligence fee, the buyer may for any reason or no reason terminate by giving written notice of termination prior to the period’s expiration.
The “due diligence period” replaced a financing contingency in the Offer to Purchase and Contract form (developed by the North Carolina Association of REALTORS© and the North Carolina Bar Association) when it was revised in 2011. Brokers familiar with the older form may overlook or forget this change which, in effect, removed the ability to obtain financing as a contingency; instead, the buyer’s contingency became the period of time within which to inquire about the property and obtain financing. That period should be of sufficient length to enable completion of the buyer’s inquiries. If additional time is needed, it must be negotiated with the seller. Otherwise, the “due diligence period” expires without the buyer having terminated and the buyer is then unable to close, the contract provides that earnest money paid by the buyer belongs to the seller.
Under the standard form the buyer pays a fee in order to have a due diligence period. Termination before the end of the due diligence period will yield return of earnest money, but not the due diligence fee. During the due diligence period, the buyer should take the necessary steps to feel confident that their loan is going to be approved. A prequalification letter is not a loan guarantee, and buyers should be advised of the risk of moving forward after the due diligence period ends.
Ideally, buyer should consult with their lender prior to signing the offer and the buyer and broker should be confident that the due diligence period provided will allow sufficient time. The buyer’s lender should provide feedback so that the buyer is comfortable in deciding whether to terminate or proceed with the transaction. The standard form contract clearly states the loan is not a condition of the contract.
Moving forward after due diligence implies that the buyer is confident that the loan will be funded and puts the earnest money at risk if the buyer later terminates. Brokers must explain to their buyer clients about the due diligence process and the buyer’s risk if they continue past due diligence.
Offer to Purchase and Contract Standard Form
Section 1, Paragraphs h, i, j
(h) “Due Diligence”: Buyer’s opportunity during the Due Diligence Period to investigate the Property and the transaction contemplated by this Contract, including but not necessarily limited to the matters described in Paragraph 4 below, to decide whether Buyer, in Buyer’s sole discretion, will proceed with or terminate the transaction.
(i) “Due Diligence Fee”: A negotiated amount, if any, paid by Buyer to Seller with this Contract for Buyer’s right to conduct Due Diligence during the Due Diligence Period. It shall be the property of Seller upon the Effective Date and shall be a credit to Buyer at Closing. The Due Diligence Fee shall be non-refundable except in the event of a material breach of this Contract by Seller, or if this Contract is terminated under Paragraph 8(l) or Paragraph 12, or as otherwise provided in any addendum hereto. Buyer and Seller each expressly waive any right that they may have to deny the right to conduct Due Diligence or to assert any defense as to the enforceability of this Contract based on the absence or alleged insufficiency of any Due Diligence Fee, it being the intent of the parties to create a legally binding contract for the purchase and sale of the Property without regard to the existence or amount of any Due Diligence Fee.
(j) “Due Diligence Period”: The period beginning on the Effective Date and extending through 5:00 p.m. on______________________________________________________________________________________________TIME BEING OF THE ESSENCE with regard to said date.
This article came from the May 2016-Vol47-1 edition of the bulletin.
By Jean Wolinski-Hobbs, Auditor/Investigator
The Real Estate Commission continues to receive complaints related to misrepresentations concerning bedrooms and septic permit disclosure despite the issue’s coverage in Update courses and Bulletin articles. Brokers can be disciplined for making a willful or negligent misrepresentation, whether in listing advertisements or other representations.
This article reviews four types of septic systems: municipal, community, on-site, or the combination of on-site septic and municipal, and outlines considerations for brokers when preparing advertisements or disclosures.
If a property is in an older neighborhood or if there are red flags such as a depression in the yard, or stones marking a tank and the seller indicates that the home is served by the municipal system, a broker should verify that information. Even if a property is connected to a municipal system, the homeowner is typically responsible for the sewer line running from the street to the property. Damage to this line from tree roots or otherwise is not usually covered by homeowners insurance. Verification of municipal connection can be obtained from either the city or county, depending on the property location. If the property is serviced fully by the municipality, the broker’s investigation will be complete.
Combination systems with municipal system connection may no longer have a permit on file. Brokers should be aware that city or county responsibility ends where the septic system connects to the municipal system. Issues with a pump connected to the septic tank, root damage to pipes in the yard or any other problem that occurs on the owner’s land will be left to the homeowner, potentially at considerable cost.
A broker should be careful not to advertise a property as having more bedrooms than the number permitted by the septic system permit. Although state law requires that on-site septic permits be maintained until they are no longer in use, there are a few counties where the records were not kept initially.
Issues in locating records can arise when the original septic permits recorded under the original builder or owner’s name and that information is unknown. In those instances, given the difficulty of verifying the permitted number of bedrooms, a broker should research tax records. If the property appears to have four bedrooms but the tax records indicate three bedrooms, that could indicate a septic permit’s limit. Ultimately, in cases when the permit cannot be located, brokers should disclose what they know: namely, that the property has an on-site septic system but the system permit was not located.
One concern with misrepresenting a property as having more bedrooms than the system permits is that the system could be overused and eventually fail. The health department can then prohibit further use of the system in order to prevent possible contamination of groundwater and to protect public health. If the system is repairable, lower occupancy limits can be imposed.
The Commission regularly reviews cases where brokers knowingly advertise properties as having more bedrooms than the permit allows but try to qualify it. For example, a broker advertises that the property has six bedrooms but in the property remarks discloses that the septic permit allows only three bedrooms. Such advertising is still deceptive and encourages overuse of the system by suggesting allowable occupancy by more people than the septic system was designed to handle.
Brokers should take reasonable steps to ensure that they are discovering and disclosing the correct sewage system utilized by any home they are listing. If the home is connected to an on-site septic system, then the property should be represented as having the amount of bedrooms as indicated on the permit. Buyer’s agents should be alert to any red flags and perform their own due diligence if there are concerns about the representations.
This article came from the May 2016-Vol47-1 edition of the bulletin.
By Pamela R. Rorie, Continuing Educator Officer
Real estate instructors, school officials and publisher representatives braved cold and icy conditions to attend the Commission’s 2016 Real Estate Educators Conference in Cary on February 15-16 at the Embassy Suites. Despite the inclement weather, the annual event drew an enthusiastic crowd of approximately 180 participants.
Commission Chair Cindy Chandler welcomed the group and introduced other Commission members attending the day-and-a-half conference. Commission Executive Director Miriam Baer initiated the morning session with a State of the Commission presentation, which highlighted “front burner” issues and described recent accomplishments and future projects.
Bruce Moyer, Director of Education and Licensing, and Janet Thoren, Director of Regulatory Affairs and Legal Counsel, jointly presented The Road Ahead, which informed educators of actions to be taken as a result of findings by the Instructor Task Force, and plans to substantially change the format of the North Carolina Real Estate Manual, and restructure Commission rules governing education programs.
Corean Hamlin, Education and Licensing Officer, explained the importance of specific and student-focused learning objectives in Are We There Yet? GPS for Your Classroom. Deborah Carpenter, Education and Examination Officer, recognized with Certificates of Achievement prelicensing schools and instructors whose students had exhibited outstanding performance on the license examination for the past year.
The North Carolina Real Estate Educators Association (NCREEA) held its spring meeting during the first-day luncheon and NCREEA President Arvil Price presented the Association’s “Program of the Year” award to Deborah Long for her continuing education elective course, You’ve Been Served: Real Estate Lawsuits That Changed the Business.
Chandler and Price jointly presented the Commission’s newly established Larry A. Outlaw Excellence in Education Award and the Association’s Educator of the Year award to educator and attorney Mel Black. The Outlaw award was established in memory of the late Commission Director of Education and Licensing who retired in 2014 after 35 years of service. Commission Vice Chair George Bell and former Chair Everett “Vic” Knight were also in attendance for the presentation.
Moyer began the afternoon session with comments relating to state-specific exam topics and other issues associated with the licensing exam and Hamlin explained the process of reviewing requests to waive the examination requirement. The first day concluded with a presentation by Moyer about the Instructor Performance Improvement Plans and a Continuing Education Update from Continuing Education Officer Pamela Rorie, who recounted the growth and improvements in the continuing education program over the past 22 years and announced the topics for the General and Broker-in-Charge Update (GENUP and BICUP) courses for the 2016-2017 license year.
Dr. Lawrence J. Fabrey, Senior Vice President of Psychometrics with Applied Measurement Professionals, Inc., opened the conference’s second day with an overview of the company’s history and a discussion of revisions to the licensing exam.
The conference concluded with a Case Studies & Open Forum conducted by members of the Commission Regulatory Affairs Division: Director Thoren, Assistant Director Charlene Moody, Deputy Legal Counsel Fred Moreno, Associate Legal Counsel II Eric Mine, and Associate Legal Counsel I Robert Patchett, who presented various application and disciplinary case scenarios and answered questions from the audience.
The Commission thanks North Carolina’s real estate educators for their continued interest and support, and congratulates Deborah Long and Mel Black for their achievements.
This article came from the May 2016-Vol47-1 edition of the bulletin.
The Commission adopted seven of the eight proposed rule changes at its March 16 meeting.
Proposed amendments to Rule 21 NCAC 58A .0116 relating to abandoned trust accounts were withdrawn from this rulemaking session for further consideration.
The seven adopted rule changes are subject to final approval at the Rules Review Commission (RRC) meeting on April 21. With the RRC’s approval, which will be announced on the Commission’s website, the seven adopted rule changes will be effective July 1.
The complete texts of the rules with changes are available on the Commission’s website and are summarized below.
21 NCAC 58A .0103 – To amend the rule in Paragraph (a) to require brokers to update phone numbers and email addresses within 10 days of change and in Paragraph (b) to clarify the use of assumed names by business entities or sole proprietorships.
21 NCAC 58A .0108 – To amend the rule to include requirements for brokers to maintain all records relied upon to determine square footage and all advertising records used to market property.
21 NCAC 58A .0113 – To amend the rule to require a broker who enters into a conciliation agreement or consent order with another agency to report it to the Commission.
21 NCAC 58A .2104 – To amend the rule to correct the United States Code reference.
21 NCAC 58A .2105 – To amend the rule to correct the United States Code reference.
21 NCAC 58B .0102 – To amend the rule to increase the number of payment methods by which a time share project can submit an initial registration application fee.
21 NCAC 58B .0103 – To amend the rule to include technical changes and to increase the number of payment methods by which a time share project can submit a renewal application fee.
This article came from the May 2016-Vol47-1 edition of the bulletin.
By Eric A. Mine, Associate Legal Counsel II
Imagine you are a broker for a real estate firm managing a building of privately owned condominiums. One sunny afternoon, a woman comes into your office. Walking beside her on a leash is a small brown cat. The woman strolls up to your desk and asks if you have any units for rent. You tell her that there are some units for rent, but, nodding toward the cat, you mention that no units permit pets. The woman laughs and tells you Jasper, apparently the cat’s name, is not a pet. She says that she has a condition that Jasper helps her with and asks that you make an exception to the no-pet policy. But as far as you can tell, the woman doesn’t have any apparent disabilities.
Are you required to make an exception for Jasper? Can you ask the woman to take Jasper out of the rental office? And what questions can you ask the woman to determine if you must do so?
There is no shortage of confusion when it comes to answering these questions. And much of that confusion is due to differences in the two main laws that protect the rights of a person with a disability: the Fair Housing Amendments Act (FHAA) and the Americans with Disabilities Act (ADA). This article will provide guidance on how a broker should proceed when attempting to determine whether or not an exception to a no-pet policy must be made for a person with a disability.
FHAA Applicable Law
When it comes to making an exemption to a no-pet policy for a rental unit, be it an apartment, condominium, or house, the FHAA will be the applicable law in almost every case. The FHAA makes it illegal to discriminate against a person with a disability by refusing to make reasonable accommodations in rules, policies, practices, or services when it may be necessary to afford an equal opportunity to use and enjoy a dwelling. Making an exception to a no-pets policy for an Assistance Animal as defined in the Act has been held to be a reasonable accommodation, and “dwelling” has been very broadly defined and includes most types of housing, with a few very limited exceptions.
So when Jasper’s owner makes her request, you must consider two threshold questions before deciding whether or not you are required under the FHAA to make an exception to the no-pets policy: 1) does the woman have a disability? and 2) does the woman have a need related to her disability for the animal? If the answer to either of those questions is no, then you are not required to make an exception to the no-pets policy. But if the answer to both of those questions is yes, then you and the landlord/owner are required to make an exception to the no-pets policy.
Much of the misunderstanding about the FHAA and the ADA arises from the fact that animals are considered differently under each. The FHAA requires reasonable accommodations for an “Assistance Animal.” An Assistance Animal is an animal that provides assistance, performs tasks, or provides emotional support that alleviates symptoms or effects of a person’s disability. To qualify as an Assistance Animal, there is no need for the animal to have any specialized training, which may come as a surprise to many brokers and landlords. It may also come as a surprise to some to learn that, under the FHAA, there is no restriction on the type of animal that can be considered an Assistance Animal. A person could have an emotional support dog, cat, or in theory even a kangaroo.
Ask Potential Renter
But what exactly can you ask the potential renter? If the person’s disability is readily apparent and it is clear what function the Assistance Animal is providing, you may not ask for any more details and you should accommodate the request as your no-pets policy doesn’t apply. For instance, if the person appears to be blind and the Assistance Animal is a seeing-eye dog, you must allow the dog, no questions asked.
If the person’s disability is not readily apparent and the need for the Assistance Animal is not clear, you may ask the person to submit reliable documentation showing that they have a disability and that they have a disability-related need for the assistance animal. So, back to Jasper and her owner, since the woman has no apparent disability and it is not clear what assistance Jasper is providing, it would be acceptable to ask her to provide a letter from a medical professional stating that she has a disability and Jasper alleviates one or more of the effects of the disability. But you may not ask for details about the person’s disability, including what the disability is, nor require the person to provide detailed medical records. A note from a medical professional is all you should ask for. Likewise, if the disability is apparent, but the need for the Assistance Animal is not, you may ask for documentation showing the need for the Assistance Animal. But, again, you may not ask for details regarding the disability. You also may not ask how or if the Assistance Animal has been specially trained because no special training is needed for an animal to qualify as an Assistance Animal.
Therefore, if the woman provides you the requested letter, you will be required to make an exception to the no-pet policy, unless doing so somehow poses an undue financial or administrative burden (not likely), the animal poses a direct threat to the safety and health of others (possibily if it’s a kangaroo), or the animal would cause substantial physical damage to the property. And, because under the FHAA Assistance Animals are not considered pets, you may not charge the woman a pet fee or deposit. But keep in mind that you may still charge the woman at the end of the tenancy for any actual damage caused by Jasper.
ADA Protection
So how does the ADA factor in? The ADA protects a person with a disability from discrimination in places of public accommodation. The office of a property management firm is a place of public accommodation, as are hotels, restaurants, stadiums, professional offices, gas stations, etc. An individual rental unit is not. Therefore, the ADA standards will apply to your decision whether or not to allow Jasper to be present in your rental office, but not when considering the woman’s request for reasonable accommodation for a rental unit.
When the woman brings Jasper into your office, you may only consider two questions: 1) is Jasper a Service Animal that is required because of a disability? and 2) what work tasks has Jasper been trained to do? If the answer to either of those questions is no, then Jasper may be excluded. But if the answer to both of those questions is yes, then you are required to allow Jasper in the office.
Determining whether or not Jasper is a Service Animal is a little easier under the ADA. Unlike the expansive definition of an Assistance Animal in the FHAA, a “Service Animal” under the ADA may only be a dog and, in limited circumstances, a miniature horse, that is individually trained to perform specific tasks for the benefit of a person with a disability; the most common example being a seeing-eye dog. Many brokers are more familiar with the ADA’s more restrictive requirements and mistakenly believe that the FHAA has the same standard. That is not the case. Jasper, being a cat, will not qualify as a Service Animal under the ADA and you would be within your rights to ask the woman to take Jasper back outside.
But let’s assume for a minute that Jasper is a dog. If it is readily apparent that a dog is trained to do work or perform tasks for a person with an obvious disability, you may not ask about the person’s disability or the dog’s training. As in the FHAA example, if the person appears to be blind and the Service Animal is a seeing-eye dog, you must allow the dog to enter the office, no questions asked.
However, if it is not readily apparent that the dog is a Service Animal, the questions you may ask the person are much more limited than those allowed under the FHAA. You may ask if a dog is required because of the disability. A simple “yes” answer is sufficient; you may not ask for detailed information, not even the nature of the disability. You may also ask what the dog has been trained to do. The person should provide you with a description of what service the dog provides; however, you may not require the person to prove to you that the dog is registered, certified, trained, or licensed to be a Service Animal. If the person tells you that they need the dog because of a disability, and explains what the dog is trained to do, the dog may not be denied access to the facility unless it is out of control, not housebroken, or poses a direct threat to the health and safety of others.
The FHAA and the ADA are both laws protecting the rights of persons with disabilities. But knowing when and where each law applies can be tricky. Keep in mind the FHAA – the Fair Housing Amendments Act – applies to housing units and the ADA applies to anywhere the public can go. To protect yourself and the owners of any properties that you manage, always limit yourself to asking the questions permitted by each law. The FHAA allows you to ask: 1) Does the person have a disability? and 2) Does the animal provide assistance or support related to the disability? The ADA allows you to ask: 1) Is the animal a Service Animal required because of a disability? and 2) What work or tasks has the animal been trained to perform? And, under either law, if the person is able to answer both of those questions you are required to make an exception and allow an animal, even if you have an established no-pets policy.
This article came from the May 2016-Vol47-1 edition of the bulletin.
The annual period for renewal of your real estate license begins at midnight on May 15 and continues until June 30. The renewal fee is $45.00. Per Commission Rule 58A.0503, you must renew online at www.ncrec.gov. If you fail to renew on or before June 30, your license will EXPIRE.
To renew online, login to your record on the Commission’s website, www.ncrec.gov, on or after May 15. Your PIN (password) will be the last four digits of your Social Security number unless you have changed it. (A broker who does not have the ability to renew online may renew by calling the Commission’s office between 8:30 a.m. and 5:00 p.m., Monday through Friday (919/875-3700)).
You may pay by Visa, MasterCard, Discover, or PayPal account (new this year). A printable confirmation of renewal will appear on your screen when the process is completed.
While logged in, be sure to verify and update all contact information. The Real Estate License Law allows you to designate your email address in one of two ways: (1) PRIVATE, meaning it will be used exclusively for communication from the Commission to you; or (2) PUBLIC, meaning it will be provided upon request to the public, including CE course sponsors and others. You may provide both a private and/or public email address upon logging into your record.
All broker license records are updated on July 1 to reflect license status as of that date. The Commission’s website will be unavailable on July 1 and 2, due to the annual records maintenance process.
If your renewal fee has not been received by the Commission by June 30, your license will EXPIRE. To reinstate an expired license, you must pay a $55 fee between July 1 and December 31. Failure to reinstate the former license by December 31 will result in your having to file a new application and fee, and obtain a criminal background report. You will also be required to take additional education and/or pass the state license examination. Refer to the “Reinstate your License” page on the Commission’s website (www.ncrec.gov) for detailed information regarding the reinstatement process.
Be sure to renew your license even if you do not complete your continuing education by June 10. By doing so, your license will only be changed to Inactive status on July 1, rather than Expired.
Brokers-in-charge and BIC-eligible brokers must take the BICUP course and one elective by June 10. Failure to take the correct CE or timely renew the license will result in loss of BIC status and/or eligibility. A broker-in-charge who loses BIC status/eligibility must (1) return the license to active status; (2) meet the experience requirements for designation; (3) take the 12-hour Broker-in-Charge Course before re-designation; and (4) send the Commission the BIC Declaration Form. Do NOT take the 12-hour BIC Course before your license is on active status!
Brokers-in-charge are also responsible for ensuring that licensees under their supervision have renewed their licenses and completed all necessary education to maintain active and current licenses.
This article came from the May 2016-Vol47-1 edition of the bulletin.
ANITA T. AFIFY (Surf City) – By Consent, the Commission reprimanded Ms. Afify effective April 1, 2016. The Commission found that Ms. Afify is the qualifying broker and broker-in-charge of a licensed rental property management firm from which tenants reserved an oceanfront beach house; that Ms. Afify was notified that a shoreline proection project had been extended and would coincide with the tenants’ rental period; that Ms. Afify failed to notify the tenants of the possibility that the project could affect their ability to directly access the beach from the rental until the day the rental period was to begin and, that in fact, the project prevented direct access to the beach during the rental period. The Commission noted that the tenants were offered full reimbursement for the cost of the rental period.
LINDA F. ALLISON (Belmont) – By Consent, the Commission reprimanded Ms. Allison effective March 31, 2016. The Commission found that Ms. Allison was the listing agent for a property that went under contract with buyers who had their own broker representation; that an inspection of the property was performed which suggested that the AC unit temperature differential was not within industry standards and the inspector suspected low refrigerant as the cause; that as a result, the buyers requested that the sellers have the AC system evaluated by a qualified HVAC technician and make any recommended repairs; that the sellers were not agreeable to paying for this evaluation or repairs, so Ms. Allison agreed to pay for this cost herself as a gift to her clients; that none of the contract documents referenced that Ms. Allison, rather than her seller clients, was going to be responsible for the AC system evaluation and repairs; that after the work was complete, the HVAC technician delivered an invoice to Ms. Allison who believed that the technician also added refrigerant to the system, based upon a prior conversation with him, so she wrote the words “added refrigerant” on the work order receipt before sending it to the buyer’s agent; that the technician, however, did not add refrigerant to the AC system after checking it as he determined it was not needed, and did not authorize Ms. Allison to include that language on the invoice.
JAMES F. BLUE IV (Asheville) – By Consent, the Commission reprimanded Mr. Blue effective March 31, 2016. The Commission found that Mr. Blue, acting as the qualifying broker and broker-in-charge of a real estate brokerage firm, rented a property, built in 1928, to a tenant who had recently moved to North Carolina from out of the country; that during the lease period, the tenant had the property evaluated by a general contractor who found various issues, including exposed asbestos insulation in the basement; that Mr. Blue admitted to knowing about the insulation in the basement and suspecting it was asbestos, but stated that it had never been tested for confirmation; and that, nevertheless, Mr. Blue failed to disclose its presence to the tenant. The Commission notes that the tenant has reached a civil settlement with the landlord and Mr. Blue’s insurance carrier.
ANN S. BRADSHAW (Gastonia) – By Consent, the Commission reprimanded Ms. Bradshaw effective April 1, 2016. The Commission found that Ms. Bradshaw advertised a residential property on the MLS as having four bedrooms when the septic permit only allowed up to two bedrooms.
DANIEL C. CALLAHAN (Charlotte) – By Consent, the Commission reprimanded Mr. Callahan effective March 31, 2016. The Commission found that Mr. Callahan, acting as a listing agent for a property, responded to an inquiry from the buyer’s agent about the amount of the average monthly utility bill for the property by stating it was under $80; that after closing, it was discovered that the average monthly utility bill for the prior twelve months was actually over $200; that the buyer then replaced the unit; that Mr. Callahan failed to verify the average utility bill amount before conveying the information to the buyer’s agent; and that the buyer received two monthly average utility bill amounts from the utility company prior to closing on two separate occasions in the amount of $190 and $90, respectively.
CONNIE L. DEJEET (Surf City) – By Consent, the Commission reprimanded Ms. Dejeet effective April 1, 2015. The Commission found that Ms. Dejeet was employed by a licensed rental property management firm from which tenants reserved an oceanfront beach house; that Ms. Dejeet was notified that a shoreline protection project had been extended and would coincide with the tenants’ rental period; that Ms. Dejeet failed to notify the tenants of the possibility that the project could affect their ability to directly access the beach from the rental until the day the rental period was to begin; and, that in fact, the project prevented direct access to the beach during the rental period. The Commission noted that the tenants were offered full reimbursement for the cost of the rental period.
THOMAS G. DERHAM (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Derham for a period of 12 months effective March 2, 2016. One month of the suspension was active with the remainder stayed for a probationary period ending March 2, 2017. The Commission found that Mr. Derham, acting as a leasing agent to secure a tenant for a commercial property, allowed a tenant to occupy the property beginning in August 2014, but did not procure a written lease until October 2014; that Mr. Derham failed to timely deliver or deposit in a trust or escrow account two separate $2,000 checks payable to the property owner; that the licensed real estate brokerage firm for which Mr. Derham is the Qualifying Broker was administratively dissolved on September 10, 2010; that Mr. Derham failed to notify the Commission of the administrative dissolution and continued to operate the firm until June 2015; that Mr. Derham lost his broker-in-charge eligibility on July 1, 2011 and failed to affiliate with a new broker-in-charge thereafter; and that Mr. Derham continued to practice real estate brokerage and operate the firm without a broker-in-charge.
ANGELA T. DOLE (Gastonia) – By Consent, the Commission reprimanded Ms. Dole effective April 1, 2016. The Commission found that Ms. Dole, acting as broker-in-charge of a real estate brokerage firm, failed to properly review prior to listing the advertisement of a residential property on an MLS, which was prepared by a licensed broker under Ms. Dole’s supervision, and which advertised a property as having four bedrooms when, in fact, the septic permit allowed two bedrooms.
THOMAS E. DORAZIL (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Dorazil for a period of 18 months effective February 18, 2016. The Commission then stayed the suspension for a period of 18 months on certain conditions including the immediate withdrawal of his approvals as an Update Course instructor and as a sponsor of continuing education courses. The Commission found that Mr. Dorazil taught a Commission-approved course to four students, but was not approved to teach the course at that time; that Mr. Dorazil failed to provide any course materials to the students, failed to obtain written approval by the Commission prior to conducting the course, failed to submit documentation regarding the advertising of a class that included less than five students, and failed to provide written notice to the Commission of the course offering more than 10 days in advance; and that Mr. Dorazil was later approved to instruct the course on May 28, 2015, but Mr. Dorazil then falsely reported to the Commission that the subject course was taught on June 2, 2015 instead of the actual date.
MICHAEL K. DRIVER (Greensboro) – By Consent, the Commission reprimanded Mr. Driver effective March 31, 2016. The Commission found that Mr. Driver acted as a buyer agent for a couple that was purchasing a new construction home and as the listing agent for the same couple in the sale of their current home; that the couple went under contract to purchase the new construction home on March 20, 2015, but did not sign a buyer agency agreement with Mr. Driver for representation until April 5, 2015; that the buyer agency agreement did not contain an expiration date; and that the acknowledgement form he received from the buyer couple following thereview of the Working With Real Estate Agents brochure with them was dated April 5, 2015, well after first substantial contact was made.
HOLLY BROOKS EVANS (Charlotte) – By Consent, the Commission revoked the broker license of Ms. Evans effective April 1, 2016. The Commission found that Ms. Evans attended an appointment to show a home alone and, during the appointment, took prescription drugs belonging to the homeowner; and that Ms. Evans, acting as the buyer agent in a residential sales transaction, delivered keys to the property to her buyer-client prior to closing, the time agreed upon for the keys’ delivery.
TINA LYNN HANSON (Kannapolis) – The Commission accepted the voluntary surrender of the broker license of Ms. Hanson for a period of one year effective March 2, 2016. The Commission dismissed without prejudice allegations that Ms. Hanson violated provisions of the Real Estate License Law and Commission rules. Ms. Hanson neither admitted nor denied misconduct.
WILLIAM EASTON HORNER (Holly Springs) – By Consent, the Commission reprimanded Mr. Horner effective March 2, 2016. The Commission found that Mr. Horner, acting as listing agent for two adjacent, separately owned properties received an offer from a potential buyer for both properties; that seller A countered the buyer’s offer while seller B, at Mr. Horner’s suggestion, did not counter the buyer’s offer but instead offered seller financing and solicited a new offer from the buyer; that the buyer and seller A entered into a contract; that Mr. Horner communicated seller B’s offer of financing to the buyer, but the buyer was not interested and did not make any other offer for seller B’s property; and that Mr. Horner failed to communicate with seller B concerning the buyer’s failure to make another offer for seller B’s property, believing that to do so would adversely affect the sale of seller A’s property.
INVESTORS DREAM REALTY LLC (Kannapolis) – The Commission accepted the voluntary surrender of the firm license of Investors Dream Realty for a period of one year effective March 2, 2016. The Commission dismissed without prejudice allegations that Investors Dream Realty violated provisions of the Real Estate License Law and Commission rules. Investors Dream Realty neither admitted nor denied misconduct.
J D JACKSON ASSOCIATES INC. (Asheville) – By Consent, the Commission reprimanded J D Jackson Associates effective March 31, 2016. The Commission found that J D Jackson Associates, a real estate brokerage firm, rented a property, built in 1928, to a tenant who had recently moved to North Carolina from out of the country; that during the lease period, the tenant had a general contractor evaluate the property who found various issues, including exposed asbestos insulation in the basement; that J D Jackson Associates, through its broker, admitted to knowing about the insulation in the basement and suspecting it was asbestos, but stated that it had never been tested for confirmation; and that, nevertheless, J D Jackson Associates, through its broker, failed to disclose its presence to the tenant. The Commission notes that the tenant has reached a civil settlement with the landlord and J D Jackson Associate’s insurance carrier.
CORIN MARIE KELLY (Fayetteville) – By Consent, the Commission revoked the broker license of Ms. Kelly March 16, 2016. The Commission found that Ms. Kelly acted as the buyer agent in the sale of real property with an underground fuel storage tank as indicated by a home inspection report and failed to educate her buyers about the risks of purchasing property with an underground fuel tank; that Ms. Kelly also failed to suggest that the buyer request removal of the underground fuel storage tank or recommend that the buyers have the surrounding soil tested for fuel contamination; that the buyers discovered that the underground storage tank had leaked fuel and contaminated the surrounding soil, which required the removal of the tank and remediation of the contaminated soil; that during an investigation of this matter, Ms. Kelly received, but failed to respond to a Letter of Inquiry sent by Commission staff.
STEVEN A. LAROQUE (Kinston) – The Commission accepted the voluntary surrender of the broker license of Mr. LaRoque for a period of three years effective February 18, 2016. The Commission dismissed without prejudice allegations that Mr. LaRoque violated provisions of the Real Estate License Law and Commission rules. Mr. LaRoque neither admitted nor denied misconduct.
MEA PROPERTIES INC. (Surf City) – By Consent, the Commission reprimanded Mea Properties effective April 1, 2016. The Commission found that Mea Properties is a licensed rental property management firm from which tenants reserved an oceanfront beach house; that Mea Properties was notified that a shoreline protection project had been extended and would coincide with the tenants’ rental period; that Mea Properties failed to notify the tenants of the possibility that the project could affect their ability to directly access the beach from the rental until the day the rental period was to begin and, that in fact, the project prevented direct access to the beach during the rental period. The Commission noted that the tenants were offered full reimbursement for the cost of the rental period.
HOWARD JOSE MORGAN (Greensboro) – By Consent, the Commission suspended the broker license of Mr. Morgan for a period of 18 months effective April 15, 2016. The Commission then stayed the suspension on certain conditions. The Commission found that Mr. Morgan was affiliated with a real estate brokerage firm, worked under a broker-in-charge, and managed the firm’s two trust accounts; that a review of the firm’s trust accounts found that one account was not designated trust or escrow; that Mr. Morgan did not keep any accounting records including journals, ledgers, trial balances, or bank reconciliations; that Mr. Morgan used money from the trust account to make personal expenditures in lieu of deducting a management fee; that two checks bounced indicating a shortage in one account; that deposit slips did not identify the purpose and remitter of the funds deposited; that Mr. Morgan failed to remit rent proceeds to the landlord within a reasonable time; and that Mr. Morgan could not produce a copy of all property management agreements and leases. The Commission notes that the firm has closed down and all monies have been accounted for and sent to the respective owners and/or new property management firms.
WINOKA S. MORGAN (Greensboro) – By Consent, the Commission suspended the broker license of Ms. Morgan for a period of six months effective April 15, 2016. The Commission then stayed the suspension on certain conditions. The Commission found that Ms. Morgan was the broker-in-charge of a real estate brokerage firm which engaged in property management; that Ms. Morgan supervised a licensed broker who was affiliated with the firm and who managed the firm’s two trust accounts; that a review of the firm’s trust accounts found that one account was not designated trust or escrow; that Ms. Morgan did not keep any accounting records including journals, ledgers, trial balances, or bank reconciliations; that the broker used money from the trust account to make personal expenditures in lieu of deducting a management fee; that two checks bounced indicating a shortage in one account; that deposit slips did not identify the purpose and remitter of the funds deposited; that the broker failed to remit rent proceeds to the landlord within a reasonable time; that Ms. Morgan could not produce a copy of all property management agreements and leases; and that Ms. Morgan admitted to not checking the firm’s bank statements or other accounting records and to not supervising the broker. The Commission notes that the firm has closed down and all monies have been accounted for and sent to the respective owners and/or new property management firms.
PHYLLIS C. STANLEY (Hickory) – By Consent, the Commission suspended the broker license of Ms. Stanley for a period of 12 months effective March 1, 2016. One month of the suspension was active with the remainder stayed for a probationary period ending March 1, 2017.The Commission found that Ms. Stanley was assigned a listing for a foreclosed property on July 2, 2015 for a list price of $85,500; that the listing contract stated that Ms. Stanley was to enter the listing within one business day on the Multiple Listing Service (“MLS”); that Ms. Stanley acted as a dual agent for a buyer that submitted an offer for the property on July 16, 2015; that Ms. Stanley did not place the property on the MLS until July 31, 2015 and the property went under contract that same day with her client; and that the asset manager for the property did not authorize the listing to be delayed on the MLS.
TD PROPERTY GROUP LLC (Charlotte) – The Commission accepted the voluntary surrender of the firm license of TD Property Group for a period of one year effective March 2, 2016. The Commission dismissed without prejudice allegations that TD Property Group violated provisions of the Real Estate License Law and Commission rules. TD Property Group neither admitted nor denied misconduct.
GERALD W. WITHERSPOON (Rockingham) – Following a hearing on January 14, 2016, the Commission reprimanded Mr. Witherspoon effective February 10, 2016. The Commission found that in July 2013, Mr. Witherspoon acted as a listing agent for a vacant land property and failed to accurately disclose the status of two wells located on the property.
NATHAN SHANE WOLF (Charlotte) – Following a hearing, the Commission permanently revoked the broker license of Mr. Wolf effective January 21, 2016. The Commission found that Mr. Wolf was indicted in United States District Court and, after a jury trial, convicted on charges of Racketeering Conspiracy, Mortgage Fraud Scheme and Aiding and Abetting, and Money Laundering Conspiracy and sentenced to 84 months in federal prison.
This article came from the May 2016-Vol47-1 edition of the bulletin.