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Disciplinary Actions
TRACIE BENNETT (BEECH MOUNTAIN) – The Commission accepted the voluntary surrender of the broker license of Bennett effective March 15, 2023. The Commission dismissed without prejudice allegations that Bennett violated provisions of the Real Estate License Law and Commission rules. Bennett neither admitted nor denied misconduct.
ACTION PROPERTY MANAGEMENT INC (NEW BERN) – The Commission accepted the voluntary surrender of the broker license of Action Property Management Inc effective March 15, 2023. The Commission dismissed without prejudice allegations that Action Property Management Inc violated provisions of the Real Estate License Law and Commission rules. Action Property Management Inc neither admitted nor denied misconduct.
ROSS ZANG (NEW BERN) – The Commission accepted the voluntary surrender of the broker license of Zang effective March 15, 2023. The Commission dismissed without prejudice allegations that Zang violated provisions of the Real Estate License Law and Commission rules. Zang neither admitted nor denied misconduct.
KATIE CARTER (KERNERSVILLE) – The Commission accepted the voluntary surrender of the broker license of Carter effective February 15, 2023. The Commission dismissed without prejudice allegations that Carter violated provisions of the Real Estate License Law and Commission rules. Carter neither admitted nor denied misconduct.
LISA ANDREWS MATHEWS (HAMPSTEAD) – By Consent, the Commission reprimanded Mathews, effective March 15, 2023. The Commission found that Mathews acted as the listing agent in the sale of residential property. The subject property was being used as a vacation rental and was located in Wrightsville Beach. Mathews was aware that the buyers intended to occupy the subject property immediately after closing. The seller advised Mathews that they intended there would be no rental contracts to be honored after the closing date, and that they would inform their rental agency to stop bookings accordingly, but Mathews failed to confirm this, and the property was in fact rented for periods after the closing date. Some tenants with existing leases were forced to move to other locations resulting in some of them incurring greater expenses, in violation of the NC Vacation Rental Act.
Diversity, Equity, and Inclusion Updates
April is National Fair Housing Month.
On April 11, 1968 President Lyndon B. Johnson signed into law the Fair Housing Act; we commemorate the 55th anniversary of its passage this year. The Fair Housing Act, 42 U.S.C. 3601 et seq, is a federal law that prohibits discrimination against people in a protected class in the renting or buying of a home, getting a mortgage, seeking housing assistance, or engaging in other related activities.
Who is protected?
The Fair Housing Act prohibits discrimination in housing and related activities on the basis of one’s race, color, national origin, religion, sex – which includes gender identity and sexual orientation, familial status, and disability.
Does North Carolina Have any Fair Housing Laws?
Yes, the North Carolina Fair Housing act: NCGS § 41A. Similar to the Federal Fair Housing Act, the State Fair Housing Act prohibits, and makes illegal, the discrimination in housing and related activities because of race, color, religion, sex, national origin, physical or mental handicaps, and family status.
For more information on the State or Federal Fair Housing laws visit the North Carolina Real Estate Commission’s DEI and Fair Housing pages on the website, here. Also, refer to the Commission’s 2020-2021 General Update Course for a practical refresher.
Jocelyn Mitnaul Mallette of Raleigh Appointed to North Carolina Real Estate Commission
Jocelyn Mitnaul Mallette of Raleigh has been appointed by Governor Roy Cooper to the North Carolina Real Estate Commission for a term ending July 31, 2025.
Mallette is a partner in the Raleigh office of McGuireWoods LLP. She represents publicly traded and private corporations in product liability claims, complex civil litigation, and environmental litigation in state and federal courts. In addition, she represents military veterans as part of her pro bono practice.
Prior to her role with McGuireWoods LLP, Mallette was a Law Clerk for The Honorable Barbara A. Jackson at the North Carolina Supreme Court. She was previously a Prosecutor and Special Assistant US Attorney in the United States Air Force Judge Advocate General (JAG) Corps.
Mallette holds a Juris Doctor from the University of North Carolina at Chapel Hill School of Law, and a Bachelor of Science in Legal Studies, from the United States Air Force Academy.
While in law school, Mallette was inducted into the James E. and Carolyn B. Davis Society, where she was one of eight inductees in her graduating class recognized for extraordinary leadership ability, integrity, dedication, and character.
She was honored as an “Outstanding Recent Graduate” by the UNC Chapel Hill School of Law Alumni Association in 2022, Best Lawyers: “Ones to Watch,” from 2021-2023, and “40 Under 40: Nation’s Best Advocates,” by the National Bar Association for 2020.
An active member in her community, Mallette currently serves as the Chair of the Southeast Raleigh YMCA Advisory Board and as a member of its Racial Equity Committee. She is a council member of the North Carolina Bar Association’s Military and Veterans Law Section, and a member of the Wake County Bar Association’s Grievance Committee.
Dual Agency – Authorization, Disclosure and Safeguarding Confidential Information
By Stephen Fussell, Chief CPO
An agency agreement is an agreement between a real estate firm (or sole proprietorship) and its client – a buyer, seller, landlord or tenant. The agreement usually describes the relationship between the firm and its client, specifies the services to be provided by the firm, describes any obligations of the client, and indicates how the firm will be compensated for its services.
A real estate firm’s relationship with a client also determines the relationship of the firm’s affiliated brokers with the client. See the following examples:
- Single or Exclusive Agency – the firm and ALL of its affiliated brokers represent only the client (buyer OR seller).
- Dual Agency – the firm and all of its affiliated brokers represent both clients (buyer and seller).
- Designated Dual Agency – the firm designates one or more brokers to represent the seller exclusively and designates one or more brokers to represent the buyer exclusively. However, the firm and all of the firm’s other affiliated brokers represent both parties.
Many firms endeavor to sell their own listings and therefore offer dual agency as a way to achieve this goal. If your firm offers dual agency, then you must obtain the client’s express, written authorization for the firm and its affiliated brokers to act as a dual agent. Ideally, this written authorization will be included in the listing agreement and in the buyer agency agreement.
Additionally, as soon as you learn that the other party in the transaction is also represented by your firm, you must disclose this fact to your client. Remember, you must obtain your client’s authorization to act as a dual agent before a dual agency situation occurs, and then disclose to your client when dual agency arises. Example: An offer is submitted by a buyer who is represented by the listing firm. Even if the agency agreements for both parties authorize dual agency, the listing agent must clearly disclose the dual agency situation when presenting the offer to the seller.
If a buyer or seller has concerns about the inherent conflict of interest posed by dual agency and, if your firm offers designated dual agency, then the client may request designated dual agent. While this will commonly be noted in the agency agreement, a separate written agreement addressing the type of agency the firm and client have agreed to may be used. However, a broker who has received confidential information about one party cannot be designated to represent the other party. Remember, in order for a firm to provide designated dual agency in a transaction, both parties must agree to designated dual agency. And, a firm cannot designate a broker to represent one party without also designating a different broker to represent the other party.
Firms that offer either form of dual agency (designated or non-designated) must exercise great care to safeguard the confidential information received from its clients. A designated dual agent who accidentally receives confidential information regarding the other party in a transaction which could affect their client’s decisions regarding that transaction must share the information with their client. While the sharing of this information may be detrimental to the other party in the transaction, the designated broker’s fiduciary duty requires him or her to disclose any information that could affect their client’s decision-making. It is therefore imperative that firms practicing dual agency and/or designated dual agency have clear, strictly-enforced policies and procedures for protecting clients’ confidential information to prevent accidental disclosures of confidential information.
RESPA Case Study: Is This Activity Permissible?
A brokerage offers a Lunch and Learn continuing education course for brokers. In exchange for referrals from the brokerage, a local property surveyor pays the brokerage the full cost of the luncheon for all attendees, but does not advertise its services during the course.
Question: Is this a violation of RESPA?
Answer: Yes, this is a violation of RESPA. The property surveyor has given a “thing of value” to the brokerage when they reimbursed the brokerage for the cost of the luncheon. The property surveyor and the brokerage could be held responsible for the RESPA violation. However, if the property surveyor attends the Lunch and Learn and makes a presentation or otherwise markets their services, the reimbursement may be lawful under RESPA
The Consumer Finance Protection Bureau has a multitude of resources that can assist you with understanding what activities are permitted and prohibited under RESPA. You can access the resources here.
If you have questions regarding whether or not an activity violates RESPA, please consult with an attorney.
Continuing Education: The Clock is Ticking!
Have you taken your continuing education courses yet? Do you know which continuing education courses you need to take?
Rule 58A .1702 requires brokers to complete eight credit hours of real estate continuing education courses within one year prior to the expiration of the license as follows:
- Four credit hours of elective courses: and
- Four credit hours of either:
- the General Update Course;” or
- for a broker with BIC Eligible status, the “Broker-In-Charge Update Course” in lieu of the “General Update Course.”
In other words, a broker must take the appropriate continuing education course for their license status. For example, a broker must take the BIC Update Course if they hold BIC Eligible status; if a broker does not have BIC Eligible status, they must take the General Update Course. Be aware that a broker with BIC Eligible status who takes the General Update Course and an elective will maintain an active license but will lose BIC Eligible status (and, in turn, BIC designation).
For more information or to ask a question, contact the Education and Licensing Division at 919.875.3700 or educ@ncrec.gov.
The April 2023 Commission Meeting will be in Edenton, NC!
The North Carolina Real Estate Commission is pleased to announce that it will be holding its April 19-20, 2023, business meeting and hearings in Edenton, North Carolina. You are cordially invited to join the Commission members for coffee on Wednesday, April 19th at 9:00, before the meeting begins, and to stay or attend the meeting at any time throughout the day.
The business meeting is expected to begin Wednesday at 9:30 and to last until mid-afternoon.
The meeting will be held at:
Historic 1767 Chowan County Courthouse
117 East King Street
Edenton, NC 27932
The Commission members welcome the opportunity to meet you and hear your thoughts. While not required, we will appreciate your RSVP by April 12th to exec@ncrec.gov for planning purposes.
We look forward to seeing you in Edenton!
Staff Appearances
Jean Hobbs, Auditor/Investigator and Lyndi James, Auditor, spoke at the REMAX Advantage meeting on February 7.
Fred Moreno, Chief Deputy Legal Counsel, and Kristen Fetter, Deputy Legal Counsel, spoke at the Longleaf Pine REALTORS Association meeting on February 21.
Bruce Rinne, Information Officer, spoke at the Greenridge Realty meeting on February 21.
Jean Hobbs, Auditor/Investigator, spoke at the Charlotte NARPM Chapter and Triad NARPM Chapter meeting on February 23.
Tech Corner: Say Good-Bye to Paper Renewal Notices!
Did you receive a postcard reminder to renew your real estate license last year? Did you receive it after you renewed your license? Well, guess what? Postcard renewal notices will no longer be sent to brokers via the US mail. In an effort to ensure brokers receive timely reminders to renew their licenses, the Commission will now send renewal notices via electronic communication.
Therefore, brokers must ensure a current, valid email address is on file with the Commission pursuant to Rule 58A .0103(c). Due to the elimination of paper renewal notices, it is imperative that brokers login to their license record and verify the validity of their email address.
Brokers may enter a public or private email address in their license record. However, if the email address is designated as public, this information is available to the general public. If the broker designates the email address as private, the email address is only available for the Commission to use when sending correspondence.
Furthermore, brokers should not enter an office email address that is shared with others in their brokerage. Brokers, keep in mind that if you are the qualifying broker for your firm, your public email address is also the email address for the firm. A qualifying broker cannot have a public email address that is different from their firm.
If you have any additional questions, you may contact the Education and Licensing Division at educ@ncrec.gov or 919.875.3700.