Appearances

Charlene D. Moody, Assistant Director of Regulatory Affairs, spoke to REMAX Advantage in Raleigh.

Jean A. Wolinski-Hobbs, Auditor/Investigator, spoke to Allen Tate-Charlotte SouthPark, to the Jacksonville Board of REALTORS®, and to United Real Estate East Carolina in Greenville.

Sheryl B. Graham, Consumer Protection Officer, spoke to Cape Fear REALTORS® in Wilmington, Realty Executives of Hickory and Lake Norman, and to the Salisbury Rowan Association of REALTORS®.

Nicholas T. Smith, Consumer Protection Officer, spoke to Real Estate By Design in Durham.

Peter B. Myers,Information Officer, spoke to Landmark Realty Group in Cashiers and to Premier Sotheby’s International Realty in Charlotte.

Intentional Ignorance

Stephen L. Fussell, Chief Consumer Protection Officer

           Ignorance is a lack of knowledge.  Intentional ignorance is when you choose to avoid learning information or skills. Why would a broker choose to avoid learning information or skills? One reason is that some brokers mistakenly believe that if they don’t know a material fact then they can’t be required to disclose it.

            Here are almost a dozen examples of intentional ignorance which could lead to damage to a client and disciplinary action being taken against a broker: i

1. A commercial listing broker lists a large tract of land and subsequently hears a rumor regarding a former unregulated dump site on the property, but fails to make any inquiry into the possible former dump site.
2. A residential property manager has been leasing a property to the same tenant for five years, but has not inspected the property since the tenant moved in and therefore doesn’t know about the condition of the property or whether the tenant is complying with the terms of the lease, such as unauthorized occupants or pets.
3. A vacation rental manager learns of a beach renourishment project but doesn’t inquire about planned dates or potential impact on guests.
4. A residential buyer agent shows a house to a buyer-client and silently doubts the accuracy of the square footage advertised in the MLS, but says nothing to anyone, because the buyer instantly fell in love with the property.
5. A commercial broker representing a tenant, who wants to lease a space for a daycare center, fails to ascertain whether the space meets the requirements for operating a daycare center or to advise their client to do so.
6. A property manager notices rust-colored stains in sinks, toilets and tubs, but fails to inquire about water quality or water filtration systems or suggest that the owner test the water quality.
7. A residential listing agent, whose market area includes a town bordering a river that floods during periods of heavy rain, does not inquire about flooding on the listed property or in the surrounding neighborhood.
8. A group of brokers buy an investment property to renovate and resell, but do not order any inspections or discuss conditions with contractors thinking that, if they do not discover material facts about the property, then they will not have to disclose them on resale.
9. A residential listing agent lists a house with a septic system, but does not pull and review the septic permit or inquire about the pool of foul-smelling water standing in the yard.
10. A residential buyer agent knows their buyer-client wants to construct a barn and raise chickens, goats and other farm animals, but fails to obtain and review the restrictive covenants, zoning restrictions and other regulations that may affect the buyer’s intended use or to advise their client to do so.
11. A buyer agent has a client they know to have respiratory issues and notices standing water in the crawl space of a property, but does not inquire about mold or suggest that the buyer hire a mold inspector.

The aforementioned examples illustrate brokers who chose to avoid acquiring information to improve their knowledge and/or skills and thereby failed to position themselves to better represent their clients and protect consumers.

The flaw in using intentional ignorance as a strategy is that a broker is required to discover and disclose material facts. This duty to discover eliminates a broker’s option to avoid learning about a material fact. Moreover, a broker is held responsible for what he/she knows or reasonably should know. This responsibility also applies when a broker is selling or leasing his/her own property (see N.C.G.S. § 93A-6(b)(3)). So, even if a broker doesn’t know a material fact, if the Commission determines that a prudent agent would know it, then the ignorant agent can be disciplined for failing to disclose the fact.

N.C.G.S. § 93A-6(a)(1), (8) and (10) authorize the Commission to pursue disciplinary action against a broker who omits a material fact, is incompetent or unworthy to act in a manner which protects the public or who engages in improper or dishonest dealing, respectively.  Therefore, intentional ignorance is not an option for a broker. Every broker must exercise reasonable care and diligence in discovering and disclosing all material facts to all interested persons in a timely manner.

Staff Update

75 Years of Service

Seven Commission staff members received awards for a combined total of 75 years of service: (from left to right) Frederick A. Moreno, Chief Deputy Legal Counsel; Corean E. Hamlin, Director, Education and Licensing Division; and Melissa A. Vuotto, Rulemaking Coordinator, all five years; Tiffany D. Bryant, Executive Assistant/Paralegal, 10 years; Brenda K. Hollings, License Services Officer, 30 years; Bradford A. Cox, Licensing Team Lead, 10 years; and Peter B. Myers (not present), Information Officer, 10 years.

Appearances

Stephen L. Fussell, Senior Protection Officer, spoke to Redfin Corporation in Durham.

Nicholas T. Smith, Consumer Protection Officer, spoke to Acorn + Oak Property Management and to Fathom Realty NC, both in Durham.

Disciplinary Actions

WILLIAM NEWTON DEVORE III (Asheville) – By Consent, the Commission reprimanded Mr. Devore effective May 1, 2019, on certain conditions. The Commission found that Mr. Devore, in or around December 15, 2015, was convicted of a Level 5 DWI, which he disclosed on his broker license application. In or around January 10, 2019, Mr. Devore self-reported his second DWI conviction involving an accident in which he damaged another vehicle. He received a sentence of 34 days in jail, which was suspended. Mr. Devore spent 28 days in an in-patient treatment center, and received 18 months of supervised probation and 240 hours of community service. Mr. Devore is prohibited from driving for one year.

OSCAR H. PACE, JR. (Broadway) – By Consent, the Commission reprimanded Mr. Pace effective April 1, 2019. The Commission found that Mr. Pace acted as broker-in-charge from April 11, 2016 to November 8, 2017. From November 2016 through March 2017, Mr. Pace’s employees falsely communicated to their landlord-client that the firm was continuing to accrue charges against a tenant who had vacated the property before lease end and the firm would eventually send the accrued charges to collections. Instead, Mr. Pace’s employees had already refunded the tenant security deposit to the tenant and informed him that he did not have to continue to pay rent.

TRIPP TOWER JR. (Denver) – The Commission accepted the voluntary surrender of Mr. Tower’s license effective April 17, 2019. Mr. Tower cannot reapply for licensure for one year. The Commission dismissed without prejudice allegations that Mr. Tower violated provisions of the Real Estate License Law and Commission rules. Mr. Tower neither admitted nor denied misconduct.

Be Cautious About Renos Without Permits

Reprinted from REALTOR® Magazine Online, February 26, 2019, with permission of the National Association of REALTORS®. Copyright 2019. All rights reserved.

https://magazine.realtor/daily-news/2019/02/26/be-cautious-over-a-house-reno-without-permits cce

Some homeowners bypass the permit process when they remodel their home. They may find the process too expensive or cumbersome. Permitting fees can sometimes cost hundreds of dollars or more. Some homeowners may believe that if they go ahead with a kitchen or bath remodel without a permit, they’ll likely never get caught.

But failing to get a permit could be troublesome when they go to sell the home.

Most states require homeowners to fill out a disclosure statement when they go to sell. In that form, sellers are usually asked if they completed work to the home without a required permit. Lying about it can also backfire—the sellers could be sued later by the new homeowner for making false statements.

“You can personally become liable for work carried out without permits,” writes Bill Gassett, a real estate professional with RE/MAX, REALTORS® in New England, for RISMedia’s Housecall. “Maybe the finished basement built by the previous homeowner with the fancy kitchen that sold the home has to be ripped out, or you’ll have to pay a penalty.”

Also, if there’s any incident that was caused by the lack of permits, the homeowner may face a denial of their insurance claim. If their insurance company finds they didn’t have the required permit, they could deny the claim. Many of these denied insurance claims stem from incidents that involve remodeling projects around electricity, gas, or water that were done without the appropriate permits.

Due Diligence for a New Broker-in-Charge

By Marcia M. Waldron, Auditor �~

We are often approached by licensees who have ‘acquired’ trust accounts by either becoming a Broker-in-Charge (BIC) of a firm with a trust account or by acquiring client accounts through the purchase of a company with trust account(s). Their question is “…who is responsible for any issues with the trust accounts that happened prior to me becoming the BIC?” Here is our simple but extremely important answer: You should assume that you will be held responsible. 

In prior cases, both the new and former BICs have faced disciplinary action for trust account issues that remained in existence through a transition. The next question starts with “But what if…” and generally that sentence does not need to be completed. If you acquire trust accounts, once the transfer of funds occurs, YOU are responsible for both accounting and funding of the accounts. If the records are a disaster, then you will have a disaster in your name once the deal is completed. So, what is a Broker to do?

When contemplating the addition of trust accounts, first check with the Commission to see if there is a pending investigation involving the current firm or BIC. We have had situations where the current BIC attempts to divest himself/herself of trust money to avoid disciplinary action. The Broker acquiring these accounts may find themselves inadvertently a party to our investigation.  

Next, do your homework: verify that the accounts are fully funded and that the records are compliant. Unless you are an accounting wizard, we recommend hiring an accountant or CPA who understands our rules, specifically those rules governing trust accounts. A business valuation process should always include a thorough due diligence review of accounts and contracts, but since trust funds are included, a specific examination of the trust account and related records is essential.

Knowledge of the monthly reconciliation process is a prerequisite to checking the accuracy of the trust account records. The bank account must be reconciled monthly; with a trust account there is an additional essential step to this monthly reconciliation. A determination needs to be made to see what balance should be held in the trust account.

The Commission calls this report a Ledger Trial Balance. The total on the Ledger Trial Balance should be equal to the reconciled bank balance, and the detail of this report must be verified through an examination of the individual ledgers that constitute the line items on the Ledger Trial Balance.  If this information appears inaccurate or contains negative balances, this is a red flag that further investigation is warranted.

In addition to confirming that the trust account is properly funded, the Broker-in-Charge should assure that the accounting records are otherwise compliant with Commission rules NCAC 58A .0108, .0116, .0117, and .0118.  Management and lease agreements and/or open sales transactions and agency agreements should be reviewed; cash receipting (if cash is still allowed) should be immediately evaluated. Look at office procedures surrounding all accounting functions and record retention, including keeping copies of security deposit, earnest money, and due diligence checks. Another prime area to review is the vendor list: be sure the records support disbursements, and verify that the vendors are legitimate.

If you become the Broker-in-Charge of a firm with inadequate trust account records or shortages or overages of trust money, you are immediately responsible for making certain those records and the funds are in order. Do your homework in advance; don’t put your license in jeopardy by taking on someone else’s mess.

Appearances

Janet B. Thoren, Legal Counsel, spoke to the brokers-in-charge of the Durham Regional Association of REALTORS®.

Stephen L. Fussell, Senior Consumer Protection Officer, spoke to Stearns Home Loans in New Bern.

Sheryl B. Graham, Consumer Protection Officer, spoke to the eXp Realty in Southern Pines and the Mid Carolina Association of REALTORS®.

Disciplinary Actions

WILLIAM PORTER ACETO (Boone) – By Consent, the Commission reprimanded Mr. Aceto effective June 5, 2019. The Commission found that Mr. Aceto, acting as broker-in-charge, failed to maintain the firm’s escrow accounts in compliance with Commission rules. The Commission notes that Mr. Aceto has since corrected these issues and the firm’s escrow accounts now appear to comply with these rules. Mr. Aceto, prior to entry of this Order, has also voluntarily completed the Basic Trust Account Procedures course offered by the Commission. Furthermore, no consumers were harmed by these omissions. The investigation also found that Mr. Aceto’s firm has been advertising its services under an assumed name not registered with the Commission. However, that name was timely registered with the applicable Register of Deeds and the firm has now filed the appropriate paperwork with the Commission. 

MARCIA L. BICHARD (Gastonia) – The Commission accepted the voluntary surrender of the broker license of Ms. Bichard with no right to reapply for a period of 30 months effective May 1, 2019. The Commission dismissed without prejudice allegations that Ms. Bichard violated provisions of the Real Estate License Law and Commission rules. Ms. Bichard neither admitted nor denied misconduct.

BLUE RIDGE PROFESSIONAL PROPERTY SERVICES LLC (Boone) – By Consent, the Commission reprimanded Blue Ridge Professional Property Services effective June 5, 2019. The Commission found that the firm’s escrow accounts did not comply with Commission rules. The Commission notes that Blue Ridge Professional Property Services has since corrected these issues and its escrow accounts now appear to comply with these rules. The firm’s broker-in-charge, prior to entry of this Order, has also voluntarily completed the Basic Trust Account Procedures course offered by the Commission. Furthermore, no consumers were harmed by these omissions. The investigation also found that Blue Ridge Professional Property Services has been advertising its services under an assumed name that was not registered with the Commission. However, that name was timely registered with the applicable Register of Deeds and the firm has now filed the appropriate paperwork with the Commission. 

CAPITAL TEAM MANAGEMENT INC. (Raleigh) – By Consent, the Commission suspended the firm license of Capital Team Management for a period of one year effective April 1, 2019. The Commission then stayed the suspension for a probationary period until April 1, 2020. The Commission found that the firm managed property for others in 2016 through April 2018 without a license or a broker-in-charge. The firm failed to maintain trust account and property management records in compliance with Commission rules including:  failing to perform monthly reconciliations, failing to maintain required ledgers, failing to deliver completed leases to tenants, commingling personal funds with client funds, and depositing trust funds in the firm’s operating accounts. Capital Team Management has obtained a firm license and has designated a broker-in-charge.

JUDITH A. DECKER (Beech Mountain) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Decker effective March 13, 2019. The Commission dismissed without prejudice allegations that Ms. Decker violated provisions of the Real Estate License Law and Commission rules. Ms. Decker neither admitted nor denied misconduct.

CARA MARIA DELUCA (Fayetteville) – By Consent, the Commission suspended the broker license of Ms. Deluca for a period of 12 months effective November 1, 2018. Four months of the suspension were active with the remainder stayed effective March 6, 2019. Ms. Deluca is prohibited from being a broker-in-charge and from engaging in property management for five years from this order’s effective date. The Commission found that Ms. Deluca, as qualifying broker and broker-in-charge, managed long-term rentals for owner-clients. Ms. Deluca agreed to inspect the rental properties routinely on behalf of clients but failed to do so pursuant to her contractual obligations and thus prevent or mitigate damage to the properties. More than once, Ms. Deluca failed to appear at a summary ejectment hearing on behalf of her owner-clients despite promising to do so. Ms. Deluca failed to maintain her firm’s trust accounts in compliance with Commission rules, including failing to properly reconcile the trust accounts and allowing owner accounts to have negative balances.

JEFFREY CHARLES DEWITT (Cary) – Following a hearing, the Commission permanently revoked the license of Mr. Dewitt, effective February 7, 2019. The Commission found that Mr. Dewitt failed to execute a buyer agency agreement with his client. The Commission also found that Mr. Dewitt requested his buyer-client to make two checks for the earnest money deposit payable directly to him. Mr. Dewitt converted his client’s earnest money deposit when he deposited both checks into his personal account rather than a trust account. Mr. Dewitt failed to respond to multiple Letters of Inquiry.

FOUNTAIN MANAGEMENT INC. (Jacksonville) – By Consent, the Commission reprimanded Fountain Management effective March 20, 2019. The Commission found that Fountain Management’s agency agreements did not comply with Commission rules and did not include a definite termination date, licensee number, or conspicuous non-discrimination language. An affiliated, licensed broker did not always sign agency agreements and leases. Fountain Management failed to perform three-way reconciliations and failed to maintain ledgers and journals in compliance with Commission rules.

SANDRA G FOUNTAIN (Jacksonville) – By Consent, the Commission reprimanded Ms. Fountain effective March 20, 2019. The Commission found that, as qualifying broker and broker-in-charge, Ms. Fountain’s agency agreements did not comply with Commission rules and did not include a definite termination date, licensee number, or conspicuous non-discrimination language. An affiliated, licensed broker did not always sign agency agreements and leases. Ms. Fountain’s firms failed to perform three-way reconciliations and failed to maintain ledgers and journals in compliance with Commission rules.

JAMES MICHAEL GALLAGHER III (Asheville) – By Consent, the Commission reprimanded Mr. Gallagher effective March 6, 2019. The Commission found that Mr. Gallagher, qualifying broker and broker-in-charge of a previously licensed firm, failed to maintain all records and transaction files for the firm and its affiliated brokers as required by Commission rule and did not adequately supervise a provisional broker under his supervision.

KIM S. GARDNER (Jamestown) – By Consent, the Commission suspended the broker license of Ms. Gardner for a period of three months effective April 1, 2019. The Commission then stayed the suspension effective April 1, 2019. The Commission found that Ms. Gardner, acting as qualifying broker and broker-in-charge, without a written agency agreement, listed a friend’s property for lease at the friend’s request. At the second showing of the home, Ms. Gardner accepted a $1,500 cash deposit and $60 application fee and scheduled a move-in date. Due to a disagreement regarding the number of pets allowed, a rental contract was never signed and the tenants requested a refund of the deposit. Ms. Gardner failed to deposit the cash payment into a trust or escrow account and failed to retain records sufficient to confirm disbursement of the funds to the owner.

CONTRAIN DAVIS HOLLINS (Hope Mills) – By Consent, the Commission suspended the broker license of Ms. Hollins for a period of one year effective April 1, 2019. The Commission then stayed the suspension for a probationary period until April 1, 2020. The Commission found that Ms. Hollins, in July 2017, began managing two residential properties on behalf of a landlord-client for a fee pursuant to a power of attorney. After obtaining a broker license on inactive status, Ms. Hollins continued managing the properties and deposited rent monies into her personal checking account. Ms. Hollins failed to maintain trust account records and entered into lease agreements that did not comply with the Landlord-Tenant Act. Ms. Hollins no longer manages rental properties.

TAMMY R. HOWARD (Cornelius) – By Consent, the Commission suspended the broker license of Ms. Howard for a period of 12 months effective September 1, 2018. Three months of the suspension were active with the remainder stayed for a probationary period of nine months. The Commission found that Ms. Howard, on or about March 16, 2017, was convicted of felony use or possession of counterfeit trademark goods. She was sentenced to 6-17 months imprisonment, which was suspended for 36 months of supervised probation.

LENA LORRNETTA LURENT HUTTON (Fayetteville) – By Consent, the Commission reprimanded Ms. Hutton effective April 1, 2019. The Commission found that Ms. Hutton, as broker-in-charge, did not maintain her firm’s trust account records in full compliance with Commission rules, including checks and deposit slips not labelled trust or escrow, purpose of disbursements not included on records, not all disbursements included in ledgers, and unclear journal entries. The audit found no evidence of commingling or conversion.

KAYVAN MEHRBAKHSH (Herndon, Virginia) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Mehrbakhsh effective March 13, 2019. The Commission dismissed without prejudice allegations that Mr. Mehrbakhsh violated provisions of the Real Estate License Law and Commission rules. Mr. Mehrbakhsh neither admitted nor denied misconduct.

DARLA M NICHOLS (Matthews) – By Consent, the Commission reprimanded Ms. Nichols effective April 1, 2019. The Commission found that Ms. Nichols prepared an offer to purchase and contract to sell residential property she owned to a buyer but listed herself as dual agent on the contract. Ms. Nichols failed to adequately disclose to the buyer that the subject property was impacted by three disputed judgments totaling approximately S36,000 which she was unable to pay off before closing.

OCKULY ENTERPRISES INC. (Jacksonville), By Consent, the Commission reprimanded Ockuly Enterprises effective March 20, 2019. The Commission found that Ockuly Enterprises failed to perform three-way reconciliations and failed to maintain ledgers and journals in compliance with Commission rules.

PINNACLE INN RESORT RENTALS (Beech Mountain) – The Commission accepted the permanent voluntary surrender of the firm license of Pinnacle Inn Resort Rentals effective April 18, 2019. The Commission dismissed without prejudice allegations that Pinnacle Inn Resort Rentals violated provisions of the Real Estate License Law and Commission rules. Pinnacle Inn Resort Rentals neither admitted nor denied misconduct.

ALEXANDER JOSEPH RIVERS (Raleigh) – By Consent, the Commission suspended the broker license of Mr. Rivers for a period of one year effective April 1, 2019. The Commission then stayed the suspension for a probationary period until April 1, 2020. The Commission found that Mr. Rivers managed property for others through an unlicensed entity in 2016 through April 2018 and without having a broker-in-charge. Mr. Rivers failed to maintain trust account and property management records in compliance with Commission rules including:  failing to perform monthly reconciliations, failing to maintain required ledgers, failing to deliver completed leases to tenants, commingling personal funds with client funds, and depositing trust funds in the firm’s operating accounts. Mr. Rivers has obtained a firm license and been designated as broker-in-charge.

ELIZABETH ANN STERNER (Mooresville) – By Consent, the Commission suspended the broker license of Ms. Sterner for a period of six months effective April 1, 2019. The Commission then stayed the suspension for a probationary period until October 1, 2019. The Commission found that Ms. Sterner acted as listing agent in a residential home transaction and misrepresented the square footage of a property by using the square footage reported on county tax records and a previous MLS listing. The property failed to appraise, leading the buyer to terminate the contract.

STROTHER VENTURES II INC. (Fayetteville) – By Consent, the Commission reprimanded Strother Ventures II effective April 1, 2019. The Commission found that the employees of Strother Ventures II communicated to their landlord-client that the firm was continuing to accrue charges against a tenant who had vacated the property before lease end and the firm would eventually send the accrued charges to collections. Instead, the firm staff refunded the tenant security deposit to the tenant and informed him that he did not have to continue to pay rent. An audit of Respondent Firm’s trust accounts showed that the records did not fully comply with Commission rules including checks and deposit slips not labelled trust or escrow, purpose of disbursements not included on records, not all disbursements included in ledgers, and journal entries not cleared. No evidence was found of commingling or conversion of funds.

ZIP4989 REALTY, LLC (Jamestown) – By Consent, the Commission suspended the firm license of ZIP4989 Realty for a period of three months effective December 20, 2018. The Commission then stayed the suspension for a probationary period through March 20, 2019. The Commission found that ZIP4989 Realty, without a written agency agreement, listed a property for lease. At the second showing of the home, ZIP4989 Realty accepted a $1,500 cash deposit and $60 application fee and scheduled a move-in date. Due to a disagreement regarding the number of pets allowed, a rental contract was never signed and the tenants requested a refund of the deposit. ZIP4989 Realty failed to deposit the cash payment into a trust or escrow account and failed to retain records sufficient to confirm disbursement of the funds to the owner.

Staff Updates & Appearances

Kizzy V. Crawford Heath has been employed as Legal Education Officer in the Education and Licensing Division. Prior to joining the Commission, she was a Professor at Wake Technical Community College and North Carolina Wesleyan College. She earned a B.S. in Criminal Justice from Elizabeth City State University, a M.A.Ed. in Education from the University of Phoenix, and a J.D. from North Carolina Central University. She is also a licensed real estate broker in North Carolina.

Emily J Bosman has been employed as a License Specialist in the Education and Licensing Division. Prior to joining the Commission, she resided in Holland, Michigan, where she was a customer service Team Lead for a health care services company call center.

April M. Conyers has been named Assistant to the Director of the Education and Licensing Division.

Recognition

M. Spier Holloman, Senior Auditor/Investigator, is the recipient of the 2018 ARELLO^® Investigator of the Year award. The annual award from ARELLO^® (Associationof Real Estate License Law Officials) recognizes the recipient’s investigative skills and accomplishments as reflected by the year’s most outstanding investigation.

The North Carolina Real Estate Commission is the recipient of the highly regarded ARELLO^® Communication and Education Award for 2018. This annual award recognizes outstanding systems and programs that contribute to the real estate industry, promote public protection, and may be adapted to benefit licensees and consumers in other ARELLO^® member jurisdictions.

Deborah B. Carpenter, Educator/Examination Officer, is the recipient of the Distinguished Real Estate Instructor (DREI) Leadership Council’s 2018 Mark Barker “Lift Me Up” Award. This annual award recognizes an active DREI who contributed significantly to helping DREI’s and other instructors elevate the level of their professional instruction. DREI is a classroom instructor designation of the national Real Estate Educators Association.

Madison L. Mackenzie, Associate Legal Counsel I, is one of 16 members of the North Carolina Bar Association Leadership Academy Class of 2019. The Academy provides leadership training to 16 young lawyers each year. Criteria for selection includes degree of interest and commitment, aptitude for leadership, and class diversity, including geography, practice environments, personal backgrounds, and experience.

Appearances

Miriam J. Baer, Executive Director, spoke to Fonville Morisey Realty in Cary and to the Raleigh Regional Association of REALTORS^®.

Robert A. Pachett, Associate Legal Counsel II spoke to the Wake County Property Lawyers Association.

M. Spier Holloman, Senior Auditor/Investigator, and Marcia M. Waldron, Auditor, spoke to the North Carolina Vacation Managers Association in Greensboro.

Jean A. Wolinski-Hobbs, Auditor/Investigator, spoke to the Roanoke Valley Lake Gaston Board of REALTORS^®.

Nicholas T. Smith, Consumer Protection Officer, spoke to the Jacksonville Board of REALTORS^®.

Peter B. Myers, Information Officer, spoke to Engel & Volkers South Charlotte and to the Orange Chatham Association of REALTORS^®.

Elizabeth W. Penney, then Information Officer, spoke to the Hendersonville Board of REALTORS^®.

Disciplinary Actions

JAMES RUDOLPH ANDREWS (Charlotte) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Andrews effective February 13, 2019. The Commission dismissed without prejudice allegations that Mr. Andrews violated provisions of the Real Estate License Law and Commission rules. Mr. Andrews neither admitted nor denied misconduct.

ROBERT R. HOOVER (Charlotte) – By Consent, the Commission reprimanded Mr. Hoover effective January 31, 2019. The Commission found that Mr. Hoover, qualifying broker of a previously licensed firm, failed to notify the Commission within 10 days of that firm’s dissolution by the North Carolina Office of the Secretary of State. Mr. Hoover was the Trustee of a land trust that was managed by his firm and failed to execute a management agreement with the firm. While Mr. Hoover was acting as broker-in-charge of a property management firm, he did not have access to the firm’s trust accounts and otherwise failed to ensure that they were maintained in compliance with Commission rules.

SHAWN THOMAS JOHNSON (Buncombe County) – By Consent, the Commission permanently revoked the broker license of Mr. Johnson effective February 13, 2019. The Commission found that Mr. Johnson’s broker license restricted him from becoming a broker-in-charge or a qualifying broker until June 19, 2022. Mr. Johnson consented to the restrictions on his license. Mr. Johnson operated a property management business for a fee, sometimes under the business entity Stay Asheville Inc. His property management business focused on short-term rentals, specifically using Airbnb as a platform to rent properties. Mr. Johnson failed to obtain a real estate firm license for Stay Ashville Inc., has rented at least nine properties on behalf of others for a fee without entering into a written property management agreement, failed to maintain a trust account to hold the rental proceeds for his owner clients, and failed to keep any trust account records. Instead, Mr. Johnson directed Airbnb to deposit rental proceeds into his personal bank accounts, thus commingling personal money with trust money in these bank accounts. Mr. Johnson failed to account for and disburse trust money to his owner clients. Mr. Johnson rented three properties on Airbnb, each within the Asheville city limits, as short-term rentals without first obtaining a Homestay Permit from the City of Asheville as required under the city’s ordinances. Mr. Johnson failed to execute, maintain, or produce to the Commission’s investigator any records related to his property management operation. Mr. Johnson neither admits nor denies that he modified pre-approval and prequalification letters written for other individuals to use for his own purposes.

RAYMOND DEWIRE NEELON (Wilmington) – Following a hearing, the Commission permanently revoked the license of Mr. Neelon, effective January 9, 2019. The Commission found that Mr. Neelon managed residential properties for others and failed to provide the property owner with a copy of the executed management agreement within five days. Mr. Neelon also scheduled repairs to be made to the properties he managed, and deducted those expenses from the owner rental statements, but failed to pay the vendors. Instead, Mr. Neelon converted the entrusted funds to personal use. Mr. Neelon falsely told a mold testing company that payment had already been submitted to them, in order to receive the test results, when in fact no payment had been submitted. Mr. Neelon failed to respond to Commission Letters of Inquiry and failed to notify the Commission that his licensed firm was administratively dissolved by the NC Department of the Secretary of State.

POLLY PURNESS-NORRIS (Morehead City) – By Consent, the Commission reprimanded Ms. Purnell-Norris effective February 1, 2019. The Commission found that Ms. Purnell-Norris, acting as broker-in-charge, was the listing agent for a client that, according to the listing agreement, did not authorize Ms. Purnell-Norris or her firm to act as a dual agent. Ms. Purnell-Norris, however, directed a provisional broker under her supervision to act as a designated agent for a buyer for the property Ms. Purnell-Norris listed. Ms. Purnell-Norris failed to disclose material facts about the subject property to potential buyers after she received inspection reports that noted serious defects in the condition of the house and septic system.

JOSHUA WAYNE SAMS (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Sams for a period of three months effective February 13, 2019. The Commission found that on February 16, 2018 Mr. Sams pleaded guilty to Level 4 DWI and Level 1 DWI. Mr. Sams was issued 30 months of supervised probation, required to enroll and participate in the STEP program, required to obtain an alcohol assessment, and required to perform 48 hours of community service. Mr. Sams failed to disclose these convictions to the Commission within 60 days of the judgment. Mr. Sams’s supervised probation will become unsupervised at the conclusion of the STEP program in April 2019.