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A Rose By Any Other Name – Names, Name Changes and Assumed Names

Did you know that Bruno Mars’ real name is Peter Gene Hernandez? If Bruno had a real estate license in North Carolina, he would still need to advertise as Peter Hernandez. A broker may not use a name in their real estate business that is different from the name on their real estate license certificate (which should be their legal name). If Peter Hernandez advertised his brokerage services in the name of Bruno Mars, he would be in violation of the Real Estate License Law.

The following will help guide you in the proper use of your name in advertising.

First Names

Nicknames have always been common, and you can certainly use one in place of your legal first name. The key is to remain readily identifiable to the public and to the Real Estate Commission. Some nicknames are short versions of a longer name and are commonly known. For example, William may go by “Will” or “Bill,” Robert by “Rob” or “Bob,” and Elizabeth by “Liz,” “Beth,” or even “Betsy.” In these kinds of situations, you may use a nickname because your actual name can be easily determined. Similarly, a nickname involving the use of initials in place of your given name is acceptable, as when Thomas Joseph Jefferson goes by “T. Joseph Jefferson” or even “T.J. Jefferson.”

Other nicknames are not logically associated with the user’s first name. For example, if your name is Midlemas Phestus Jones and you use a nickname like “Purple,” a member of the public would have no way of knowing that you are actually “Midlemas.” In order to assure that you can be easily identified, your business cards and correspondence should include your full name together with your nickname. This can be done in various ways. For example, your business card might read, “Midlemas ‘Purple’ Jones, Broker,” and your social media ad could say, “For all your real estate needs, call Purple! (M.P. Jones, Broker).”

Last Names

On the other hand, using a surname that is not your own is not allowed. If you have an awkward or lengthy surname, you may wish that you could shorten or simplify it only in connection with your real estate business. While the goal is understandable, the result is misleading if you haven’t legally changed your name. For instance, if your surname is Furplesnurkle, you can’t simply call yourself “Mr. Furp” or “Mr. Jones” in your brokerage activities, if your legal name remains Furplesnurkle. If a consumer wishes to confirm that you are licensed or wants to file a complaint, it is imperative that you are identifiable.  If you want to become “Furp” or “Jones,” you must legally change your name. The most straightforward way to do this is to go through a judicial name change proceeding before the clerk of court in the county where you reside.

Marital Status

But what about your wife who is also a broker–Mrs. Furplesnurkle? Before she married you, her maiden name was Myrtle Evans. What name can she use now in her brokerage activities? The answer depends on whether she legally changed her name upon her marriage. If she did, then she must use her new, legal name, “Myrtle Furplesnurkle” or “Myrtle Evans Furplesnurkle.” In addition, she must notify the Commission that she has legally changed her name by filing a Request Broker Name Change and to Reissue Real Estate License/Pocket Card form (https://www.ncrec.gov/namechange ) to have her license reissued in her new name. She will need to upload a copy of the marriage certificate and a copy of her driver’s license or other state issued ID with the new name. Myrtle cannot be Myrtle Furplesnurkle to family and friends but be Myrtle Evans on advertising.

If Myrtle did not legally take your name, she must continue to use her maiden name until she legally changes it.

If you later divorce and she wants to revert to her maiden name, she may apply to the clerk of court in the county where she lives. Upon legally resuming her maiden name, she must again notify the Commission on the same form she used when she married you and her license will be reissued in her maiden name.

 Assumed Names

If you don’t want to go to the trouble of changing your name legally, then you should use your legal name in all aspects of your business. You cannot avoid the problem by filing an assumed name registration in the office of the register of deeds. That procedure is only for business names – not for individuals who wish to have a “stage name” like Bruno.

What is an “Assumed Business Name”? For example, when an individual broker/sole proprietor named Alex Robinson advertises as Robinson Realty, Alex is not using an assumed name because Robinson Realty includes the broker’s surname.

If Alex Robinson instead advertises brokerage services (with business cards, ads, etc.) as broker-in-charge of a sole proprietorship under the name, “Luxury Homes 4U Realty,” Alex is now using an assumed business name and must comply with the statute and Commission rule.

The Commission recognizes Assumed Business Names (aka DBAs) for licensed firms and for sole proprietorships, not for individual brokers. Accordingly, the designated broker-in-charge of a sole proprietorship may submit the Request Firm/Sole Proprietorship Name Change and to Reissue Real Estate License/Pocket Card form once they have filed an assumed name certificate for their company. Again, an assumed business name is not meant for Alex Robinson to use the stage name Alex Star when he is really Alex Robinson.

However, if you see an advertisement for Elton John’s brokerage services, it’s okay. He legally changed his name from Reginald Kenneth Dwight back in 1972.

Staff Appearances

Janet Thoren, Director of Regulatory Affairs, spoke at the Durham Regional Association of Realtors meeting on February 2.

Nick Smith, Consumer Protection Officer, spoke at the Allen Tate Realtors meeting on February 8.

Dee Bigelow, Information Officer, spoke at the Dream Team Realty Group meeting on February 10.

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.

We currently have opportunities available for the following positions:

Diversity, Equity and Inclusion Officer – The Officer be responsible for creating, implementing, and advancing the Commission’s diversity and inclusion initiatives across the state. Application deadline March 3, 2022.

Click here for more information.

Disciplinary Actions

SUSAN JONES AMICK (CHARLOTTE) – By Consent, the Commission reprimanded Ms. Amick, effective January 17, 2022. The Commission found that Ms. Amick assisted with maintaining the trust accounts at the firm. An audit of these accounts found that two different software systems were being used, which caused reporting issues. Monthly reconciliations of the bank balance and property ledger trial balance were also not occurring. Furthermore, the software system had not been completely set up when it was implemented years ago. Deficit spending was also present and the security deposit did not hold enough personal funds to offset the bank fees. Finally, not all transactions were being reported on the same date in the journal and ledger, which lead to unreliable reporting. The Commission noted that Ms. Amick’s firm has now converted to one software management system and hired an independent auditor who assisted with bringing the accounts into compliance with Commission rules; Ms. Amick’s firm has hired a CPA to assist in oversight moving forward; and Ms. Amick has taken the Basic Trust Account Procedures course.

JANICE R COOPER (PRINCEVILLE) – By Consent, the Commission reprimanded Ms. Cooper, effective February 17, 2022. The Commission found that during her tenure as the BIC of a firm, in January 2021, a broker affiliated with Ms. Cooper listed two residential properties for a seller client. In February 2021, the broker was notified that the properties were owned in part by the heirs of the seller’s deceased ex-husband. The broker failed to disclose to the buyers or closing attorneys that there were additional owners. The first property closed after the broker provided the closing attorney with documents which falsely indicated that the seller-client was widowed, not divorced, and therefore owned the properties. All proceeds went to the seller-client. The closing attorney for the second property discovered the ownership interests. When informed of possible ownership issues, Ms. Cooper failed to advise the affiliated broker to disclose the ownership issues to the buyers but advised the broker to inform the closing attorney and that it would be caught during a title search. The Commission noted that Ms. Cooper assisted with the transaction to get the second transaction closed and the seller-clients have refunded the proceeds from the first transaction.

STEPHANIE D DAVIS (SANFORD) – By Consent, the Commission suspended the broker license of Ms. Davis for a period of 3 years, effective February 1, 2020. The Commission then stayed the suspension effective February 1, 2022. The Commission found that Ms. Davis, acting as BIC of a sole proprietorship, failed to safeguard and account for trust account money and failed to properly maintain trust account records in compliance with Commission rules. Commission staff also determined that Ms. Davis’ trust account was short $11,229.78.

SUZANNE BERNADETTE DAVIS (CHAPEL HILL/ORANGE COUNTY) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Davis effective February 16, 2022. The Commission dismissed without prejudice allegations that Ms. Davis violated provisions of the Real Estate License Law and Commission rules. Ms. Davis neither admitted nor denied misconduct.

KRISTI GALLAGHER FOSTER (BOONE) – The Commission accepted the voluntary surrender of the broker license of Ms. Foster for a period of five years, effective February 16, 2022. The Commission dismissed without prejudice allegations that Ms. Foster violated provisions of the Real Estate License Law and Commission rules. Ms. Foster neither admitted nor denied misconduct.

FOUR SEASONS PROPERTY MANAGEMENT INC (CHARLOTTE) – By Consent, the Commission suspended the firm license of Four Seasons Property Management Inc. for a period of 12 months, effective January 17, 2022. The Commission then stayed the suspension in its entirety. The Commission, during an audit of Four Seasons Property Management Inc.’s trust accounts, found that two different software systems were being used, which caused reporting issues. Monthly reconciliations of the bank balance and property ledger trial balance were also not occurring. Furthermore, the software system had not been completely set up when it was implemented years ago. Deficit spending was also present and the security deposit did not hold enough personal funds to offset the bank fees. Finally, not all transactions were being reported on the same date in the journal and ledger, which lead to unreliable reporting. The Commission noted that Four Seasons Property Management Inc. has now converted to one software management system and hired an independent auditor who assisted with bringing the accounts into compliance with Commission rules and that Four Seasons Property Management Inc. has hired a CPA to assist in oversight moving forward.

MICHAEL ROBERT GRAHAM (MOORESVILLE) The Commission accepted the voluntary surrender of the broker license of Mr. Graham for a period of two years, effective January 19, 2022. In light of the surrender, the Commission dismissed without prejudice a complaint filed against Mr. Graham relating to an alleged misrepresentation of a property’s sewage disposal system.Mr. Graham neither admitted nor denied misconduct.

HIGH COUNTRY VACATION HOMES (BOONE) – The Commission accepted the permanent voluntary surrender of the firm license of High Country Vacation Homes, effective February 16, 2022. The Commission dismissed without prejudice allegations that High Country Vacation Homes violated provisions of the Real Estate License Law and Commission rules. High Country Vacation Homes neither admitted nor denied misconduct.

MARY M. HUNT (LUMBERTON) – The Commission accepted the voluntary surrender of the broker license of Ms. Hunt for a period of five years, effective February 16, 2022. The Commission dismissed without prejudice allegations that Ms. Hunt violated provisions of the Real Estate License Law and Commission rules. Ms. Hunt neither admitted nor denied misconduct.

ELIZABETH HOLLY RAMOS (JACKSONVILLE) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Ramos effective February 16, 2022. The Commission dismissed without prejudice allegations that Ms. Ramos violated provisions of the Real Estate License Law and Commission rules. Ms. Ramos neither admitted nor denied misconduct.

FAWN ELIZABETH THAYER (DURHAM) – By Consent, the Commission suspended the broker license of Ms. Thayer for a period of 4 months, effective February 17, 2022. The Commission found that Ms. Thayer participated in a social media exam study group and actively shared confidential exam information or encouraged others to gather exam information.

JOHN C WELCH JR (CHARLOTTE) – By Consent, the Commission suspended the broker license of Mr. Welch Jr. for a period of 12 months, effective January 17, 2022. The Commission then stayed the suspension in its entirety. The Commission found that as the BIC of a firm, an audit of Mr. Welch Jr.’s trust accounts found that two different software systems were being used, which caused reporting issues. Monthly reconciliations of the bank balance and property ledger trial balance were also not occurring. Furthermore, the software system had not been completely set up when it was implemented years ago. Deficit spending was also present and the security deposit did not hold enough personal funds to offset the bank fees. Finally, not all transactions were being reported on the same date in the journal and ledger, which lead to unreliable reporting. The Commission noted that Mr. Welch Jr has now converted to one software management system and hired an independent auditor who assisted with bringing the accounts into compliance with Commission rules, and that Mr. Welch Jr has stepped down as BIC of the firm.

The April 20 Commission meeting will be in Fayetteville!

Have you ever wanted to attend a Real Estate Commission meeting to see what it is really all about? Or have you wanted a chance to talk to a Commission member? Are you going to be in the Fayetteville area on Wednesday, April 20? If so, please join us at the Springhill Suites, 4750 Lake Valley Drive, Fayetteville, NC in the Plank/Campbell Meeting Room.

We will be welcoming the public in for coffee at 8:30 AM, with the Commission meeting starting at about 9:00. This is a great opportunity to meet the Commission Members and key staff. You are also welcome to stay for a portion or for all of the Commission’s meeting. Mark your calendars for April 20!

But the Seller Breached! When Should Due Diligence Fees be Refunded?

In today’s hot market, due diligence fees have become a significant consideration for both buyers and sellers. The commonly used NC REALTORS©/NC Bar Association Offer to Purchase and Contract (Form 2T) incorporates a due diligence period for which the buyer may pay a negotiated fee. Some brokers are encouraging their buyer clients to offer considerable amounts in due diligence fees to make their offer more competitive, and some buyers do so even against their broker’s advice. 

First, it’s important to note that the parties are not required by law or by the Commission to either use the form provided to brokers by their trade association or to include a due diligence fee as part of their contract. The parties are always free to have their own attorney draft a contract for their transaction or to choose not to offer a due diligence fee. Brokers should be careful to not imply otherwise.

The Commission has seen a major increase in complaints from buyers insisting they are owed a due diligence fee refund because a home inspection discovered an issue with the property which was not disclosed prior to going under contract. If a buyer is offering thousands of dollars in due diligence fees to secure a contract, they need to be fully aware that the fee is generally not refundable, even if the inspection reveals material defects in the property. The rights of a buyer during the due diligence period are the same whether they have paid $0, $100, or $100,000 in due diligence fees.   

Brokers should never lose sight of the goal: doing what is best for the client rather than getting a bad contract in place. A good broker will always be sure to take the time to clearly explain the risks to the buyer in paying any amount of due diligence money. A broker’s fiduciary duties to their client include loyalty, obedience, accountability, disclosure, and skill, care and diligence.  When a buyer has hired a broker for their expertise and assistance in making what frequently amounts to the largest purchase they’ll ever make, then the expectation is that the broker will be looking out for their best interests. 

A broker’s best practices include being well versed regarding the terms of a contract and educating their client on all of the ins and outs of due diligence, including the risks involved and when a fee is refundable.

The Due Diligence Period is designed to allow the buyer:

  1. a period of time to inspect the property and determine if they wish to accept it in its current condition
  2. the opportunity to request repairs and negotiate the repairs and costs with the seller,
  3. access to the property for any and all inspections, surveys, appraisals, etc. and
  4. the right to terminate the contract unilaterally prior to the end of the due diligence period for any or no reason.

It’s a common misconception that a seller has ‘breached the contract’ by failing to agree to pay the cost of repairs or for not disclosing a defect in the property. While the buyer may seek to negotiate repairs, the contract does not obligate the seller to make any repairs. The seller’s obligations under the contract Form 2T are in Paragraph 8 and only relate to repairs to the extent that the seller has agreed to perform them. Specifically, the contract requires the seller to:

  1. provide evidence of clear title and a General Warranty Deed and payoff of all existing liens with an affidavit regarding payment,
  2. pay ad valorem taxes, pro-rated property taxes and any late listing fees, confirmed special assessments, Owner’s Association fees and certain charges payable by seller, and any agreed-upon buyer’s expenses,
  3. provide access to the property for the buyer including working utilities,
  4. remove the seller’s personal property, garbage and debris, and
  5. perform all repairs that have already been negotiated and agreed upon by the parties.

If the seller fails to perform those obligations, thereby breaching the contract, then the buyer may be entitled to a refund of their due diligence fee along with any earnest money, and costs incurred performing their due diligence (see paragraph 23 for the remedies). 

The contract makes no guarantee as to the condition of the property and, under paragraph 4(d), states that the property is being sold in its current condition. Brokers should make buyers aware that the Residential Property and Owners Association Disclosure Statement is not a guarantee of the property condition. A seller’s answer of “no” or “no representation” on the disclosure statement does not mean that there are no problems or defects in the property, only that the seller is either unaware of a problem or has chosen to make no representation. A deliberate misrepresentation by a broker may result in disciplinary action. Similarly, a deliberate misrepresentation by an unlicensed seller could result in civil liability if a buyer chose to pursue a private civil suit. However, the Commission has no authority to award such damages. The bottom line? Brokers should advise their buyer clients early and often that they should not expect a refund of any due diligence fee they pay even if they are dissatisfied with the condition of the property. Brokers should do everything they can to ensure that their buyer-clients are well-informed and offer an amount of due diligence fee that they are prepared to lose.

Disciplinary Actions

YECENIA BANEGAS (JOHNSTON COUNTY) – By Consent, the Commission suspended the broker license of Ms. Banegas for a period of 2 years effective January 10, 2022. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Banegas bought and renovated a residential property and relied on unlicensed contractors’ advice in failing to obtain necessary permits. Ms. Banegas listed the property without disclosing that she had not obtained permits or hired licensed professionals to do renovations including relocating a wall, and connecting an HVAC system to a room. Ms. Banegas also failed to discover and disclose serious termite damage in the crawlspace. The Commission noted that Ms. Banegas had refunded the buyer their fees and deposits after they terminated the contract.

DANIELLE SEANTE GADDY (FAYETTEVILLE) – By Consent, the Commission suspended the broker license of Ms. Gaddy for a period of 18 months effective January 1, 2021. The Commission then stayed the suspension in its entirety. The Commission found that, as qualifying broker/broker in charge of a firm, Ms. Gaddy failed to complete required annual continuing education (CE) which resulted in her license being “inactive” from October 8, 2020, through November 6, 2020 and the firm’s license being “inactive” from October 8, 2020, through October 29, 2020. Despite this, Ms. Gaddy continued to enter into agency agreements and represent clients in submitting offers to purchase. Ms. Gaddy failed to notify the Commission within ten (10) days of the firm being administratively dissolved by the NC Secretary of State. Ms. Gaddy has since had the firm reinstated. In a transaction where Ms. Gaddy acted as the listing agent, the Commission found that she showed the subject property, with her seller-client’s approval, to a potential buyer three days prior to marketing the property in the MLS. Ms. Gaddy also added the phrase “not the procuring cause” in the selling agent section of an offer to purchase contract submitted by the buyer’s agent. The property ultimately went under contract with a different buyer.

JOHN LIGHT (KILL DEVIL HILLS) – The Commission accepted the voluntary surrender of the broker license of Mr. Light for a period of 1 year effective December 15, 2021. The Commission dismissed without prejudice allegations that Mr. Light violated provisions of the Real Estate License Law and Commission rules. Mr. Light neither admitted nor denied misconduct.

GEBA RENEA MCDANIEL (WINSTON-SALEM) – By Consent, the Commission suspended the broker license of Ms. McDaniel for a period of 2 years effective December 30, 2021. The Commission then stayed the suspension in its entirety. The Commission found that Ms. McDaniel was the broker-in-charge and qualifying broker of a property management firm which allowed an unlicensed broker, and his unlicensed firm, to conduct brokerage activities. Ms. McDaniel failed to notify the Commission within ten (10) days of her firm’s administrative dissolution by the NC Secretary of State. Ms. McDaniel’s management agreement with the property owner failed to contain all provisions as required by Commission rules. Ms. McDaniel, acting as a buyer agent, referred various clients to a credit repair/restoration company to assist with raising their credit rating and failed to disclose that this company was owned and run by her husband.

DEBORAH STALL PORTH (CHARLOTTE) – By Consent, the Commission suspended the broker license of Ms. Porth for a period of 2 years effective January 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Porth was qualifying broker/broker in charge of a Firm, whose company policy was to run a background check on every prospective tenant 18 years of age and older. In 2019, the Firm leased a property to three adult brothers without collecting the listed tenant security deposit or prorated rent, and after obtaining a background check for only one applicant rather than each tenant. The “overall recommendation” in the background report was to DECLINE that applicant. The tenants were late with their rent or did not pay rent while they were living in the property, did not vacate when their lease expired in October 2020, and were evicted in January 2021 still owing rent. The Commission noted that Ms. Porth personally paid the owner the missing tenant security deposit funds. Ms. Porth also failed to timely account for or disburse a tenant security deposit to a tenant despite re-renting the property within three weeks of the tenant’s vacating, and failed to maintain trust account records in compliance with Commission rules.

When is the deadline for Continuing Education?

Do you know which CE courses you need to take? Did you know you can search for available CE courses on the Commission’s website?

CE Requirement

Rule 58A .1702 dictates that, to maintain an active license, a broker must take eight (8) hours of CE each year.

*A BIC or BIC-eligible Broker who takes the General Update course and an elective will maintain an Active license but will lose his/her BIC Eligible status and BIC designation.

Not sure which Update course you need to take?  Login to your license record on the Commission’s website to check your license status before registering for a course.

CE Course Search

CE Update and elective courses are offered in variety of formats.  Update courses are offered in person and via synchronous distance learning (aka, “live online” instruction using Zoom or similar technologies).  Elective courses are also offered via distance courses (self-paced online courses).

To search for in-person and “live-online” CE Update and elective courses:

  1. go to www.ncrec.gov;
  2. click on the Education menu;
  3. click on Search CE Course Schedules; and
  4. click on Search Providers.

To search for providers that offer self-paced, online CE elective courses:

  1. go to www.ncrec.gov;
  2. click on the Education menu; and
  3. click on List of Distance CE Providers.

For more information, contact the Education and Licensing Division at LS@ncrec.gov or 919.875.3700.

Current Stats: Monthly Licensee Count as of January 1, 2022

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.

We currently have opportunities available for the following positions:

Auditor – Audit trust account records of real estate brokers state-wide and investigate consumer complaints. Application deadline February 11, 2022.

Click here for more information.