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Tech Corner: Electronic Signatures
Does Your Use of Electronic Signatures Comply with License Law & Commission Rules?
- Do you know what is an electronic record or electronic signature?
- Are you retaining the electronic record and signatures pursuant to License Law and Commission rules?
- How can you document the necessary requirements?
The law that governs the use of electronic records and electronic signatures is called North Carolina’s Uniform Electronic Transactions Act (hereafter referenced as “UETA”) and can be found in NCGS § 66-311 et. seq. UETA has a few exceptions, but it applies to electronic records and electronic signatures in the conduct of a transaction including a real estate transaction.
According to G.S. 66-314, UETA applies to any electronic record or electronic signature created, generated, sent, communicated, received or stored on or after October 1, 2000. This law further makes the use of electronic records and signatures legal so long as the parties agreed to use electronic means.
Question: What is considered an electronic record?
Answer: An electronic record is any information on a tangible medium that is created, generated, sent, communicated, received, or stored by electronic means.
Question: What is considered an electronic signature?
Answer: The UETA defines an electronic signature as a:
- sound, symbol or process,
- attached to, or logically associated with a record,
- executed or adopted by a person with the intent to sign the record.
Further, the UETA requires all three elements to be present to constitute a valid electronic signature.
Question: How long does an electronic record need to be retained according to the UETA?
Answer: The UETA does not specify the minimum amount of time electronic records must be retained. However, it states that record retention requirements imposed by other laws will be satisfied by retaining an electronic record that (1) accurately reflects the information set forth in the record at the time it was generated as an electronic document, and (2) remains accessible for later reference.
Question: Does the Commission require brokers to retain electronic records?
Answer: Yes. License Law and Commission rules require brokers to retain all records related to a transaction regardless of the format of the original record(e.g. hard-copy or electronic) The Commission does not require any specific format of record retention so long as the records are legible and available upon request. A broker is required to retain all records for a least three years following:
- the conclusion of the transaction, or
- termination of the broker’s agency relationship, and
- disbursement of all trust monies related to that transaction held by the broker, whichever occurs last.
Therefore, brokers must ensure that they retain all of their electronic records using the management software of their preference pursuant to the record retention requirements under Commission Rule 58A .0108.
Question: Is obtaining an electronic signature satisfactory to prove the document was reviewed with the client and explained by the broker?
Answer: Not necessarily. Most electronic signature tools such as DotLoop or Docusign simply indicate where the client needs to place signatures or initials, but Commission Rule 58A .0104, for example, requires that a broker provide AND REVIEW the Working With Real Estate Agents Disclosure. Agency principles require the review and explanation of all documents signed by the client. Brokers should also retain accompanying emails and notes that indicate they met these obligations, not just proof that the client signed the document. If you have any further questions or comments, please contact the Commission at 919-875-3700 or educ@ncrec.gov.
Staff Appearances
Fred Moreno, Chief Deputy Legal Counsel, spoke at the North Carolina Vacation Rental Managers Association meeting on December 6.
Nick Smith, Auditor/Investigator, spoke at the LOTSAR meeting on December 8.
The January 2023 Commission meeting will be in Wilmington!
The North Carolina Real Estate Commission is pleased to announce that it will be holding its January 18-19, 2023, business meeting and hearings in Wilmington, North Carolina. You are cordially invited to join the Commission members for coffee on Wednesday, January 18th at 8:30, 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 9:00 and to last until mid-afternoon.
The meeting will be held at:
EMBASSY SUITES WILMINGTON RIVERFRONT – SALON I
9 ESTELL LEE PLACE, WILMINGTON
The Commission members welcome the opportunity to meet you and hear your thoughts. While not required, we will appreciate your RSVP by January 11th to exec@ncrec.gov for planning purposes. We look forward to seeing you in Wilmington!
Diversity, Equity, and Inclusion Updates
Social justice, biases (often times implicit), and discrimination have been hot topics throughout the real estate market over the last few years. As the North Carolina Real Estate Commission works to bring awareness and enhance the principles of diversity, equity, and inclusion in real estate brokerage it requires all hands on deck.
The Commission is open to, and welcomes, all feedback on new DEI initiatives and ways to successfully implement them. Additionally, if you have witnessed or been subjected to racism or discriminatory behavior in any real estate related activities it is important that you provide this information to the Commission. To provide feedback or information on your experiences with racism or discrimination in real estate related activities contact the Commission’s DEI Officer here.
Weston’s Law Revised
In July 2021, 7-year old Weston Androw of Canton, Ohio became trapped between an elevator car and elevator shaft in the vacation home his family rented on North Carolina’s Outer Banks. EMS workers were able to free Weston from the elevator but were not successful in resuscitating the young boy. Weston’s tragic death spurred action by lawmakers to enact a new law regarding safety requirements for elevators in short-term rental properties. On July 8, 2022, Governor Cooper signed House Bill 619, also known as Weston’s law, which is designed to prevent future injuries and deaths resulting from gaps in certain residential elevators.
The law applies to elevators in private residences, cottages or similar accommodations that are rented for 15 or more calendar days per year. Similar to the North Carolina Elevator Safety Act, the law defines an elevator as any hoisting and lowering mechanism, with a car or platform, which moves in guides and serves two or more floors of a building or structure.
Weston’s Law allows for a maximum gap of 4 inches between the hoistway face of the landing door and the car door of an elevator. Additionally, the law mandates minimum force requirements for elevator doors and gates. All elevator designs must be able to withstand 75 pounds of applied force. When this amount of force is applied, the doors and gates must not deflect (bend or curve) more than ¾ of an inch, become permanently deformed, or be displaced from the guide or tracks.
If elevator doors or gates do not currently comply with the aforementioned safety requirements, the landlord of the rental property cannot allow for the elevator to be operated until the safety conditions are met.
If the gap between the car door and landing door is greater than 4 inches, then the landlord must install a permanent door space guard or door baffle of at least 31.75 inches in height. This addition must be able to withstand 75 pounds of force applied horizontally using a 4-inch diameter sphere.
Once the landlord installs a door, door space guard, door baffle or gate in compliance with these safety requirements, the landlord must provide the Commissioner of Insurance with either a statement signed by a professional elevator installer certifying installation or a receipt for purchase of the item that was installed, a statement signed by the landlord stating the date of installation, and photographs which depict the door, door space guard, door baffle or gate that was installed pursuant to the law.
Weston’s Law went into effect October 1, 2022. Property managers should advise their landlord-clients to implement measures that comply with the safety requirements. Any person who violates the landlord’s attempt to prevent use of an elevator until it meets these requirements may be charged with a Class 2 misdemeanor criminal offense. Property managers handling short-term rentals should take reasonable steps to ensure that any elevators comply with the new law and refrain from representing any landlord who has failed to comply but is continuing to allow the elevator to be used.
Technology Survey: Will You Help Us Help You?
Do you rely on technology to conduct your brokerage activities? Have the advancements in technology made you feel like you have been left behind?
The Commission is aware that technology has consistently impacted the practice of real estate brokerage over the past several years. Some brokers have expressed their frustration about the challenges they face while conducting brokerage activities.
In an effort to determine the need for educational materials to meet the technology needs of brokers in North Carolina, and the best source of those materials, the Commission is asking for your assistance in completing a survey. This survey will take approximately 3-5 minutes to complete and your responses will remain anonymous. The Commission values the input of the brokerage community and would like to thank you in advance for your participation.
The deadline for survey submission is Monday, December 12, 2022.
You can access the survey here.
If you have any further questions or comments, please contact the Education and Licensing Division at 919.875.3700 or educ@ncrec.gov.
Disciplinary Actions
JOSEPH DAVID CANDELARIA (CONCORD) – By Consent, the Commission suspended the broker license of Candelaria for a period of 6 months, effective December 1, 2022. Commission found on February 4, 2022, Candelaria timely submitted a criminal conviction form reporting four felony convictions of possession of marijuana, but failed to timely respond to two Letters of Inquiry. Candelaria failed to report four additional drug related misdemeanor convictions in 2016 as well as a probation violation.
ANDREA VACAFLOR AYOROA (CHARLOTTE) – By Consent, the Commission reprimanded Ayoroa, effective December 1, 2022. The Commission found that in or around February 2022, Ayoroa acted as a buyer’s agent for a client who contracted to purchase a vacant lot. After the termination of the contract, Ayoroa’s buyer-client filed a complaint with the Commission against the listing agent. During the course of the investigation of the initial complaint, Ayoroa failed to timely provide a substantive response to multiple Letters of Inquiry.
CHRISTINE D COX (HICKORY) – By Consent, the Commission suspended Cox for ninety (90) days, effective September 20, 2022. The Commission found that Cox acted as a listing agent for residential property located on a lake and included a boat dock. After the property went under contract, it was discovered that the boat dock lacked a tag and it was further discovered that the boat dock was not permitted. The buyers terminated the contract a few days later without expending any funds. Respondent disclosed the lack of permit issue to the next buyer. During the course of the investigation, Cox failed to timely reply to multiple letters of inquiry.
Employment Opportunities Available
Are you interested in joining the staff of the North Carolina Real Estate Commission? From time to time, employment opportunities become available. They are posted on the Commission’s website under the “About Us” tab.
The Real Estate Commission is currently searching for an attorney to serve as Associate Legal Counsel II to prosecute cases before the Commission involving allegations of violations of the Real Estate License Law and Commission rules.
Click here for more information.
Staff Appearances
Janet Thoren, Director of Regulatory Affairs, Len Elder, Director of Education and Licensing, and Mike Gray, Chief Auditor, spoke at the North Carolina Association of Realtors Convention on October 18.
Janet Thoren, Director of Regulatory Affairs, Kristen Fetter, Deputy Legal Counsel, Mike Gray, Chief Auditor,and Chad Wilson, Auditor-Investigator, spoke at the ARELLO Regulatory Investigator Seminar on November 1-3.
Fred Moreno, Chief Deputy Legal Counsel, spoke at the Greensboro Regional REALTORS meeting on November 1.
Sheryl Graham, Consumer Protection Officer, spoke at the Keller Williams Realty office meeting on November 9 and at the Brunswick County Association of REALTORS office meeting on November 17.
Bruce Rinne, Information Officer, Brian Heath, Consumer Protection Officer, spoke at the Longleaf Pines REALTOR Association meeting on November 22.