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Open Cases as of December 2019

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Staff Updates

Melissa Vuotto has been named Paralegal Supervisor in the Regulatory Affairs Division.

Use Good Judgment: A Regulatory Affairs Division Case Study

by Stephen L. Fussell, Chief Consumer Protection Officer

The Complaining Witness in this case was a seller who listed his property with a broker. The Respondent was a buyer agent who showed the seller’s property. The seller had a doorbell camera which records persons approaching his front door. The camera recorded the Respondent buyer agent as he and his buyer-clients approached the seller’s front door.  The buyers brought their dog on a leash, and, while the buyers were inside the property, the dog urinated on the floor. The buyer agent and the buyers left the property without cleaning up the mess.  There were three additional showing appointments that day.  The next agent who showed the property noticed the “accident,” cleaned up the mess, and reported it to the listing agent, who informed the seller. The seller was justifiably upset that the Respondent had allowed his clients to bring a dog into the property without authorization and then failed to clean up after the dog.

In a written response, the Respondent claimed he asked the buyers to leave their dog in the car, but they said it was too hot. This incident occurred in September, so it may have been too hot to leave the dog in the car.  The Respondent claimed the buyers assured him the dog was “well-trained.” The Respondent had other options, including rescheduling the showing or asking one client to stand outside with the dog while the other client viewed the interior of the home and then the clients could have traded places so that both clients could have viewed the interior of the house with the Respondent. Only with the seller’s permission should the Respondent have allowed his clients to take a dog into the seller’s home.  

When a seller lists his/her property with a broker, the seller understands that other real estate brokers will show the seller’s property to prospective buyers. The seller should be able to trust that the brokers who show the seller’s property will use good judgment and take reasonable steps to safeguard the seller’s property. When a broker is inside someone else’s home, the broker is generally responsible for what occurs.  Therefore, each broker who shows a listed property must exercise reasonable skill, care and diligence to ensure that no damage will be done to the seller’s property during a showing. When a broker leaves a listed property after a showing, the broker should make sure he/she leaves it in the same condition as before it was shown.

With regard to the above-referenced case, the Commission’s Regulatory Affairs Division issued a letter of caution to the buyer agent instructing him to exercise greater care in the future to safeguard the properties he shows to prospective buyers. We sent copies of the letter to the seller and to the buyer agent’s broker-in-charge.  Moreover, the Commission retains complaints in a permanent database for review and reconsideration in the event that a similar complaint is filed in the future.

Proposed Rulemaking

The Commission is currently considering two proposed rule changes, one concerning Education Providers, and a separate Annual Rulemaking on various topics. Text for the proposed rules under consideration may be found on the Commission’s website under ‘License Law and Rule Changes.’ Changes to the proposed rule text are reflected by underlining text that will be added and striking through text that will be deleted.  All proposed rules have a proposed effective date of July 1, 2020.

The Commission is accepting public comments on these rules beginning February 3, 2020 until April 5, 2020.  Members of the public may submit written comments on any of the proposed rules by contacting the Commission’s Rulemaking Coordinator, Melissa Vuotto, or by attending the public hearing on the proposed rules to be held at the Commission’s office, located at 1313 Navaho Drive, Raleigh, North Carolina, on Wednesday, March 18, 2020, beginning at 9:00 a.m. 

The Commission will review all public comments before reaching its final decision on April 15, 2020. Once the final rule text is approved by the Rules Review Commission, the Commission will publish the approved rules.   

If you would like to receive notifications of rulemaking proceedings, please join the Commission’s mailing list.

Appearances

Tracy Sease, Information Officer, spoke at Smart Choice Realty’s event in Raleigh.

Disciplinary Actions

CHERIE L SCHULZ (Richlands) – By Consent, the Commission reprimanded Cherie L Schulz effective January 2, 2020. The Commission found that Respondent failed to respond to letters of inquiry issued by Commission staff within fourteen days of receipt. Respondent was warned in a previous case to timely respond to such letters.

CHERIE SCHULZ REALTY FIRM INC. (Richlands) – By Consent, the Commission reprimanded Cherie Schulz Realty Firm Inc. effective January 2, 2020. The Commission found that the firm’s broker-in-charge failed to respond to letters of inquiry issued by Commission staff within fourteen days of receipt. The broker-in-charge was warned in a previous case to timely respond to such letters.

Postlicensing Education Deadline



This article from the January eBulletin is republished here to remind brokers of the new Postlicensing Education requirement effective July 1, 2020.

Beginning July 1, 2020, Rule 58A .1902 will require a Provisional Broker to complete all three 30-hour Postlicensing courses within 18 months of initial licensure in order to maintain active license status. 

If you were licensed anytime during 2018, you must complete all your Postlicensing courses by July 1, 2020. If you have been licensed in 2019, you will have at least 18 months from your date of licensure to complete the courses.

Example #1: Licensed on February 1, 2018

Example #2: Licensed on March 17, 2019

Additional information about this important change is provided in the General Update (GENUP) and Broker-in-Charge (BICUP) courses throughout the year. Also, if you are a provisional broker, be on the lookout for email communications from the Commission about the changing education deadlines.

If you have further questions regarding this rule change, please contact the Education and Licensing Division at 919.875.3700.

Disciplinary Actions

HIGHER TECH REALTY NC LLC (Raleigh) – By Consent, the Commission reprimanded Higher Tech Realty NC LLC effective December 15, 2019. The Commission found that in 2019, a seller contacted Higher Tech Realty NC LLC about its “Guaranteed Offer Program.” A broker affiliated with Higher Tech Realty NC LLC discussed the “Guaranteed Offer Program, but did not deliver or review the “Working with Real Estate Agents” brochure, or enter into a written listing agreement. Without the seller’s authorization, a representative from Higher Tech Realty NC LLC solicited an offer from an iBuyer on the seller’s home, and the iBuyer made an offer through Higher Tech Realty NC LLC. The seller requested that Higher Tech Realty NC LLC get the iBuyer to retract and delete its offer. Higher Tech Realty NC LLC’s BIC contacted the iBuyer and arranged for it to delete the offer it made on the Seller’s property. Higher Tech Realty NC LLC’s listing agreement did not include required anti-discrimination language, but Higher Tech Realty NC LLC switched to using a form contract which does include the required language.

DONNA W WESTLING (Fayetteville) – By Consent, the Commission suspended the broker license of Ms. Westling for a period of 18 months effective September 30, 2019. The first 3 months shall be active with the remaining 15 months stayed for a probationary period through March 30, 2021. In addition, Ms. Westling is permanently prohibited from becoming a broker-in-charge. The Commission found that Ms. Westling managed a residential property where she disbursed rent proceeds to the property owner without receiving a rent payment from the tenants, causing deficit spending. Ms. Westling was unable to produce all financial trust account documents requested by the Commission’s investigator. A review of trust account records found that: deposit slips, checks, and bank statements were not labeled “trust” or “escrow”; cancelled checks failed to identify the purpose for disbursement; deposit tickets failed to identify the purpose of the monies deposited, the date of the deposit, or the remitter; ledger sheets failed to identify to whom disbursements were paid; there was a lack of an audit trail; and that deficit spending was occurring. Ms. Westling failed to provide all leases and management agreements to the Commission’s investigator. Ms. Westling disbursed funds from the Tenant Security Deposit (“TSD”) account prior to the tenant vacating the subject property and in an amount more than the TSD collected, leading to a shortage.

BILAN MO (Charlotte) – By Consent, the Commission reprimanded Bilan Mo effective December 15, 2019. The Commission found that in or around March 2018, Ms. Mo was a provisional broker working for a firm that did not offer property management services. Ms. Mo entered into an oral property management agreement with the owner of a property, without prior experience or requesting assistance from an experienced broker and collected a $1,640 security deposit and monthly rent from the tenant, which she placed in her personal account. Ms. Mo also deducted a monthly management fee from the rents she collected during the one year period she managed the property. Ms. Mo’s BIC was unaware of any of the property management activities performed by Ms. Mo. There was no evidence that Ms. Mo failed to deliver proceeds to the landlord-client.

MITCHELL J DAILEY (Wilson) – By Consent, the Commission suspended the broker license of Mitchell J. Daily for a period of 1 month effective December 15, 2019. The Commission found that in 2002, while licensed as a salesperson, Mr. Daily was convicted of reckless driving but failed to report the conviction to the Commission. On or about June 2003, Mr. Daily applied for a broker license and disclosed his reckless driving conviction. In 2012, Mr. Daily was convicted of a DWI – Level 5 and failed to report the conviction to the Commission. On or about May 4, 2018, Mr. Daily was convicted of DWI – Level 2 and again failed to report this conviction to the Commission. On or about June 30, 2018, Mr. Daily let his broker license expire. On or about December 17, 2018, while applying for reinstatement of his license, Mr. Daily disclosed that he had received a criminal conviction since his last renewal which he had not reported to the Commission.

THOMAS J SANDERSON (New Bern) – By Consent, the Commission suspended the broker license of Mr. Sanderson for a period of 12 months effective December 6, 2019. The Commission then stayed the suspension for a probationary period through December 6, 2020. The Commission found that an audit of Mr. Sandersons’ trust accounts showed evidence that Mr. Sanderson deposited credit card charges into Mr. Sandersons’ operating account instead of the trust account, failed to perform reconciliations, and failed to accurately input expenses and deposits. Mr. Sandersons’ trust account lacked a clear audit trail. There was a shortage of $1,475 in Mr. Sandersons’ tenant security deposit account and a shortage of $18,244.50 in the rental account. Mr. Sanderson deposited money to fully fund both accounts.

TJS PROPERTIES INC (New Bern) – By Consent, the Commission suspended the broker license of TJS Properties Inc. for a period of 12 months effective December 6, 2019. The Commission then stayed the suspension for a probationary period through December 6, 2020. The Commission found that an audit of TJS Properties Inc.s’ trust accounts showed evidence that TJS Properties Inc. deposited credit card charges into TJS Properties Inc.s’ operating account instead of the trust account, failed to perform reconciliations, and failed to accurately input expenses and deposits. TJS Properties Inc.s’ trust account lacked a clear audit trail. There was a shortage of $1,475 in TJS Properties Inc.s’ tenant security deposit account and a shortage of $18,244.50 in the rental account. TJS Properties Inc. deposited money to fully fund both accounts.

BONNIE LYNN LASLO (Charlotte) – By Consent, the Commission suspended the broker license of Ms Laslo for a period of 18 months effective December 31, 2019. The Commission then stayed the suspension for a probationary period through June 30, 2021. The Commission found that Ms. Laslo placed a tenant in a property without a fully executed management agreement. Ms. Laslo failed to provide written disclosure to the buyer when an agent in her firm was acting as a dual agent for the sales transaction in which Ms. Laslo had an ownership interest. Ms. Laslo signed a management agreement, which listed two separate firms interchangeably, despite them being separately licensed entities. Some leases and management agreements contained provisions which Ms. Laslo never intended to perform, causing confusion. Ms. Laslo has now implemented corrective measures for these issues.

MANAGEMENT OFFICE PM LLC (Charlotte) – By Consent, the Commission suspended the broker license of Management Office PM LLC for a period of 18 months effective December 31, 2019. The Commission then stayed the suspension for a probationary period through June 30, 2021. The Commission found that Management Office PM LLC, placed a tenant in a property without an executed management agreement. One of Management Office PM LLC’s management agreements also included a separately licensed firm named as agent. Some leases and management agreements contained provisions which Management Office PM LLC never intended to perform, causing confusion. Management Office PM LLC has now implemented corrective measures for these issues.

REAL ESTATE REALTY LLC (Charlotte) – By Consent, the Commission suspended the broker license of Real Estate Realty LLC for a period of 18 months effective December 31, 2019. The Commission then stayed the suspension for a probationary period through June 30, 2021. The Commission found that Real Estate Realty LLC, placed a tenant in a property without an executed management agreement. One of Real Estate Realty LLC’s management agreements also included a separately licensed firm named as agent. Some leases and management agreements contained provisions, which the Real Estate Realty LLC never intended to perform, causing confusion. Real Estate Realty LLC has now implemented corrective measures for these issues.

CURTIS FRANKLIN WATERS (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Waters for a period of 18 months effective December 31, 2019. The Commission then stayed the suspension for a probationary period through June 30, 2021. The Commission found that Mr. Waters helped to place a tenant in a property without an executed management agreement. Mr. Waters failed to provide written disclosure to the buyer when he was acting as a dual agent for a sales transaction in which another broker in his firm had an ownership interest in the property. Some leases and management agreements contained provisions, which Mr. Waters never intended to perform, causing confusion. Mr. Waters has now implemented corrective measures for these issues.

Appearances

Sheryl B. Graham, Consumer Protection Officer, spoke to the Central Carolina Association of REALTORS® in Albemarle and to Keller Williams Realty Platinum in Garner.

Appearances

Frederick A. Moreno, Chief Deputy Legal Counsel, spoke to the Raleigh office of Fonville Morisey Real Estate.

Jean A. Wolinski-Hobbs, Auditor/Investigator, spoke to Allen Tate Company in Charlotte.

Peter B. Myers, Legal Information Officer, spoke to REMAX Leading Edge in Concord.