MENU North Carolina
Real Estate Commission

Bulletin Search

Staff Appearances

Nick Smith, Consumer Protection Officer, spoke at the Lantern Realty and Development office meeting on November 3.

Jean Hobbs, Auditor/Investigator, spoke at the Orange Chatham Association of REALTORS meeting on November 4.

Dee Bigelow, Information Officer, spoke at the Jacksonville Board of REALTORS meeting on November 4.

Steve Fussell, Chief Consumer Protection Officer, spoke at the North Carolina Vacation Rental Managers Association meeting on November 10.

My license has expired! How do I reinstate it?

To maintain a current license, brokers must renew their license annually between May 15 and June 30. The license of a broker who fails to renew during that period will expire on June 30, and that broker must cease all brokerage activities immediately. 

What steps must a broker take to reinstate an expired license? That answer depends on how long the license has been expired.

To reinstate a license expired for less than 6 months:

  1. go to the Commission’s homepage (www.ncrec.gov);
  2. click on Reinstate your License;
  3. enter your license number and PIN (last 4 of your SSN unless you have changed it);
  4. answer required questions; and
  5. pay the $90 reinstatement fee.

NOTE: To regain active status, a License Activation / Affiliation form (REC 2.08) also must be submitted.

To reinstate a license expired for 6 months but no more than 2 years:

  1. Successfully complete one 30-hour Postlicensing course (the course must be completed within 6 months prior to submitting reinstatement application); and
  2. Submit a reinstatement application with the $90 application fee and all required documentation, including a criminal background report from the Commission’s provider;

-OR-

  1. Submit a reinstatement application with the $90 application fee and all required documentation, including a criminal background report from the Commission’s provider; and
  2. Pass the National and State sections of license exam.

NOTE: To regain active status, a License Activation / Affiliation form (REC 2.08) also must be submitted.

To reinstate a license expired for more than 2 years:

  1. Successfully complete the 75-hour NC Broker Prelicensing course;
  2. Submit a license application with the $100 original application fee and all required documentation, including a criminal background report from the Commission’s provider; and
  3. Pass the National and State sections of license exam.

NOTE: You will be licensed as a provisional broker and be subject to the 90-hour Postlicensing education program. To gain active status, a License Activation / Affiliation form (REC 2.08) also must be submitted.

For more information, review Commission Rule 58A .0505 or visit the “Reinstate your License” page on the Commission’s website. You may also contact the Commission’s Education & Licensing Division at LS@ncrec.gov or 919-875-3700.

How do CE elective courses get approved?

Do you know who writes CE elective courses? Did you know that CE elective courses must be approved by the Commission before they can be offered by an education provider?

With the exception of the Basic Trust Account Procedures course and the 12-hour Broker-in-Charge Course, elective courses do not originate with nor are they written by Commission staff.  In fact, any person may write a CE elective course, but the course must be submitted to the Commission for review and approval through a certified education provider. 

What elective course topics can be approved by the Commission?

Rule 58H. 0402 states that elective courses must:

(1) cover subject matter related to real estate brokerage practice,

(2) offer knowledge or skills that will enable brokers to better serve real estate consumers and the public interest,

(3) consist of at least 4 hours of instruction and offer 4 CE credit hours, and

(4) include handout materials for students that provide the information to be presented in the course.

What are examples of topics that “relate to real estate brokerage practice?“

Currently, approved elective course topics include (but are not limited to) agency, appraisal, association management, building styles & designs, construction, contracts, environmental issues, ethics, finance, investment, land use, mortgage fraud, property inspection, property management, and risk management.

What are examples of topics that cannot be approved?

Topics such as business branding, marketing, and MLS data entry cannot be approved, as they are focused only on the broker’s business model, rather than skills or knowledge required by the law and/or needed to effectively represent clients or work with customers.

How do would-be authors determine topics? 

Some authors choose real estate topics about which they are passionate.  Some survey brokers for ideas and suggestions.

What documentation must be submitted to the Commission for course review and approval?

Commission rule 58H .0401 establishes the application requirements for Prelicensing, Postlicensing, and CE courses. All submissions must include a course guide with:

            (1) course objectives,

            (2) learning objectives for each topic addressed in the course,

            (3) a course syllabus,

            (4) instructional methods and aids to be employed, and

            (5) all course materials that will be provided to students.

There are additional documentation requirements based on proposed delivery method.

Anyone aspiring to write a CE elective course should take advantage of the resources on the Commission’s website.  Become familiar with 21 NCAC 58H .0401 and 21 NCAC 58H .0402, and then read and follow the instructions in the Commission’s Real Estate Education Course Approval Guidelines. 

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

Current Stats: Monthly Licensee Count as of November 1, 2021

Case Study: Even the Beautiful Ones Can Be Ugly

Shanna Hardy – Consumer Protection Officer

A broker and his firm listed a property built in 1960, and advertised it as being totally renovated – including all new flooring, roof, HVAC system, kitchen cabinets and countertops, vinyl siding, remodeled bathrooms, windows and doors.  On the Residential Property Disclosure, the seller marked “no representation” for all questions.  This property had all the beautiful finishes that a newly constructed home would have.  A first time homebuyer discovered the beauty and was anxious to place an offer.  Her offer was accepted and the property went under contract.

During the due diligence period, the buyer performed all standard inspections.  The inspector noted that certain renovations did not appear to have been performed by licensed contractors and that further investigation was recommended.   An inquiry was made to the seller about the renovations. In response, the seller stated that all work was cosmetic and only cost $26,250 which, he said, fell under the $30,000 threshold to require permits.  Both the listing and selling brokers accepted this answer without question.  Closing couldn’t come fast enough for this buyer, who was excited to move into her new home. 

After moving into the home, the buyer reported having very serious and costly problems.  The first problem occurred when she noticed termites in the bathroom.  Then the new HVAC system stopped working.  The buyer called a technician who reported that not only had the system overheated and the interior components melted, nearly causing a fire, but the electrical wiring in the crawl space caused burn marks on the floor joist.  Next, the vinyl siding began buckling and upon further examination by a general contractor, it was discovered that the newly installed vinyl was nailed on top of old deteriorated wood siding.  And, if that wasn’t bad enough, during the night, the new kitchen cabinets detached from the wall and crashed to the floor.  The buyer reported over twenty-one claims to her insurance company during the first twelve months of ownership.

Due to the overwhelming amount of insurance claims, the new homeowner’s insurance company conducted its own investigation and discovered that none of the renovations were performed by licensed contractors, nor were any permits pulled for the work, which, contrary to the seller’s assertions, were required for replacement of the HVAC system and remodeling the bathroom.  The homeowner’s insurance company cancelled the insurance policy for the property. 

The listing broker and his firm failed in their duty to properly discover and disclose material facts about this property before listing.  The seller performed significant renovations that included work requiring plumbing, electrical work, mechanical, and building permits. The listing broker failed to confirm that his seller-client obtained the proper permits ensuring the work was performed in a workmanlike manner. The listing broker’s failure to disclose the material fact that the renovations were unpermitted caused financial harm to the buyer of the property. The buyer agent was aware of the significant renovations and failed to confirm whether the renovations were permitted or discuss the issue with the buyer. The listing broker and buyer agent were both disciplined and agreed in a settlement to reimburse the buyer for expenses associated with properly permitting and repairing the property.  

Remember to ask questions.  $30,000 is the threshold for hiring a General Contractor, not whether any permits are required or whether a licensed contractor is required for a particular project. Permits are often necessary for HVAC changes, electrical improvements, water heater replacement, and changes to internal structures such as removing walls. Additionally, a homeowner may decide that costs can be controlled intentionally to keep a project below that general contractor threshold, regardless of whether the work being done is good quality. When listing a property, you should ask: Who did the repairs and renovations? Do you have invoices or receipts? How much were the repairs?  Were permits obtained?  Were they required?  Asking questions on the front end can save you and your clients lots of headaches later on.

Disciplinary Actions

AMANDA MCRAE CAMPBELL (LUMBERTON) – By Consent, the Commission suspended the broker license of Ms. Campbell for a period of 9 months, effective October 1, 2021. The Commission then stayed the suspension in its entirety. The Commission found that in June, 2020, Ms. Campbell, listed a residential property. The sellers completed the RPOADS in which they answered “no” to every question. A buyer contracted to buy the property but terminated t based on the home inspection. Buyer #1 did not share their inspection report with Ms. Campbell. The sellers obtained their own home inspection, which they shared with Ms. Campbell. The home inspection revealed multiple defects, including an unsupported floor in the bathroom, a drainpipe was discharging into the crawl space, the crawl space had very high moisture level, the house had PB pipes and various plumbing leaks, and water stains on interior ceilings indicative of a possible roof leak. Ms. Campbell failed to revise the MLS or to otherwise disclose any defects. A subsequent buyer contracted to buy the subject property and received the original RPOADS signed by the sellers. The buyer received an inspection report detailing the same defects and also terminated their contract. The property sold to a final buyer without Ms. Campbell disclosing the defects or advising her seller-clients to update the RPOADS.

TAYLOR BRADLEY COALSON (MOUNT AIRY) – By Consent, the Commission reprimanded Mr. Coalson, effective September 30, 2021. The Commission found that in October, 2020, Mr. Coalson, acting as a listing agent, listed a property for $139,900. On October 24, 2020, Mr. Coalson’s BIC submitted an oral offer for $143,000 on behalf of buyer-clients, which the seller’s indicated they would accept. On October 25, 2020, Mr. Coalson’s BIC submitted the written offer of $143,000 on behalf of his buyer-clients, and, the same day, another buyer submitted a written offer of all cash for $145,000 with an earlier closing date. Ms. Coalson did not present the second written offer document but did inform the sellers. Mr. Coalson’s seller-clients signed the lower offer in the belief that they were obligated based on their “verbal acceptance.”

LEONARD JAMES CUSATO (SOUTHERN SHORES) – By Consent, the Commission reprimanded Mr. Cusato, effective September 30, 2021. The Commission found that in 2020, Mr. Cusato, acting as the listing agent, received information that a tiki bar located on the listed property was in violation of the setback regulations and that the screen porch and tiki bar were constructed without permits. Mr. Cusato failed to discover additional information concerning these material facts and failed to disclose that information to the buyers and their agent. The county issued a Notice of Violation and the buyers were required to move the tiki bar out of the setback.

JANET G LAMB (NEW BERN) – By Consent, the Commission suspended the broker license of Ms. Lamb for a period of 6 months, effective October 1, 2021. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Lamb acted as the listing agent for an estate owner of a residential property, which included a boat dock. Prior to listing, one of the property heirs told Ms. Lamb that the boat dock might be shared with a neighbor. Ms. Lamb was aware of the previous MLS listing, by a different firm a few years prior, which stated “DOCK IS OWNED IN COMMON WITH NEIGHBOR TO THE LEFT”. Ms. Lamb pulled the tax card for the subject property as well as the neighboring property, which showed that both properties were being assessed tax for the dock. Ms. Lamb, however, could not find a written agreement for a shared dock with the Register of Deeds Office or taxing authority. Ms. Lamb also discovered that the power and water supply to the dock came from the subject property. Therefore, she believed the subject property had exclusive right to the dock and advertised that the property had a “Boat Dock”. A buyer purchased the subject property without having a survey performed. A subsequent survey verified that the dock sits on both property lines.

WILLIAM EDWARD RAMSEY III (RALEIGH) – By Consent, the Commission suspended the broker license of Mr. Ramsey III for a period of 3 years, effective April 4, 2020. The Commission then stayed the remaining 18 months suspension after 18 months active. The Commission found that in May 2015, Mr. Ramsey III was convicted of one count of maintaining a place for the purpose of manufacturing, distributing, and using marijuana. The offense occurred over an 8 month period from September 2009 to April 2010. Mr. Ramsey III was sentenced to thirteen months in prison followed by three (3) years of supervised probation. Mr. Ramsey III was ordered to pay a $50,000 fine and ordered to forfeit to the United States his interest in the property in which the charges arose. Mr. Ramsey III was released from prison on April 4, 2016. According to Mr. Ramsey III’s probation officer, Mr. Ramsey III has paid the $50,000 fine and his probation was terminated. Mr. Ramsey III did not timely report this conviction to the NCREC.

Current Stats: Monthly Licensee Count as of October 1, 2021

Resources at your Fingertips

Have you checked out the Commission’s website (ncrec.gov) recently? Did you know the website offers a wide variety of resources for brokers and consumers?

Resources for brokers include:

Resources for consumers include:

Also, the Support page provides brokers and consumers with responses to frequently asked questions.

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

A Broker’s E-mail Might Prove BINDING!

The ease and convenience of negotiating real estate transactions electronically may come with hidden pitfalls. Details and terms communicated in a broker’s e-mail or text might be considered by a court to be binding. Brokers and their clients want immediate responses regarding Offers to Purchase, amendments, or due diligence requests, especially in a fast-paced market. Some say we live in an “instant gratification” era; but at what risk?

A real estate contract must be a written agreement, signed by all parties, and then the fact that it has been signed must be communicated to all parties in order to satisfy the Statute of Frauds and contract law. However, many transactions today are negotiated quickly via e-mails and texts between listing brokers and buyer agents and between those brokers and their clients, before being reduced to writing on contract forms. Communications go back and forth between brokers expressing their client’s offer, counter offer or responses to the proposed terms of the transaction. Even after a contract is signed, negotiations continue about additional items including extensions of various dates, repair requests, additional inspections, and possession of the property.

The danger is, what a broker communicates electronically might be deemed binding. E-mails and electronic communications can become the subject of lawsuits and damaging to the parties involved. In a 2012 Massachusetts case, Feldberg, et al. v. Coxall, the buyer alleged that the emails exchanged by the buyer’s and seller’s attorneys evidenced the creation of a contract. The judge cited the Massachusetts Uniform Electronic Transactions Act saying “an e-mail signature block or even the “from” portion of the email may constitute valid electronic signatures in cases where the parties are conducting the transaction electronically.” Even though the seller argued that no contract was signed, the ruling opened up the possibility for a court to look at whether the e-mails constituted a binding agreement. (The parties eventually settled the matter out of court).

In North Carolina, the Uniform Electronic Transactions Act, Article 40 of Chapter 66 of the North Carolina General Statutes, can be found at the following link:  https://www.ncleg.net/enactedlegislation/statutes/html/byarticle/chapter_66/article_40.html

According to this statute, when deciding if the parties have agreed to handle the transaction electronically, the context and surrounding circumstances, including the parties’ conduct, is considered. The Act also states the requirement for a contract to be “in writing” may be satisfied if the provider delivered the communication in an electronic record capable of retention. 

Although to date, we know of no North Carolina Court that has held that electronic communication between brokers constituted a binding contract, by negotiating the possible terms of a transaction electronically, real estate brokers might be putting themselves and their clients in jeopardy and not realize it until it is too late.   

So, how can brokers protect themselves when negotiating electronically on their client’s behalf? Consider the following when communicating via email: 

You may want to include in your communications that your client must approve the terms of the transaction; negotiations are simply preliminary until all parties sign the agreement and properly communicate their acceptance. You might also state that your email or text does not create acceptance or a binding contract.  

At one time, Offers to Purchase were delivered by hand, in their entirety, initialed, signed and dated.  Counter offers with clearly marked changes, initialed and signed by all parties, were also hand delivered.  Today, most negotiations take place electronically, so taking steps to communicate clearly and safely by electronic means is essential. 

When a broker proposes or responds electronically to possible transaction terms on behalf of their client, it is imperative they use non-binding language to protect both themselves and their clients from possible pitfalls.

Additionally, once that written contract is signed and acceptance is communicated, don’t assume that subsequent negotiations are handled differently than the initial contract negotiations. Any changes to the written contract still require signatures and communication of acceptance. If your buyer client has submitted a Due Diligence Request and Agreement, and through emails the Listing Broker has described what the seller will repair, but the seller has not signed the document, don’t assume that the seller is bound to the terms of the agreement or to do the repairs. Because it is possible that the brokers’ communications could bind the parties, it is best to take care that the parties are not bound to repairs or other agreements by the brokers’ electronic communication. Instead, make sure that the contract documents are modified to reflect the parties’ agreements.

North Carolina Real Estate Commission Works to Implement New Law Modernizing State’s Timeshare Laws

Passing with Unanimous & Bipartisan Support, Commission Hails New Law as Important for State’s Consumers, Businesses & Industry

With the signing of House Bill 531 into law on October 6, 2021, which updates North Carolina’s laws on timeshare regulation, the North Carolina Real Estate Commission is now working on its implementation. The Commission also hailed the new law, which passed the North Carolina General Assembly with unanimous and bipartisan support before being signed into law, as a needed and an important modernization to the state’s timeshare laws that will have positive impacts for consumers, businesses and the industry.

The new lawsubstantially revises the North Carolina Time Share Act by:

“North Carolina’s timeshare laws haven’t been updated for nearly 40 years, and because of that, they were no longer reflective of the industry and how it’s changed,” said Janet Thoren, Legal Counsel for the Commission. “By updating North Carolina’s timeshare laws, we’ve now brought them into the 21st century and they’re in line with the direction in which the industry is headed. It puts consumer protections in place, like regulating timeshare resale and exit company activity and codifying conduct that violates the law – all things that were needed and welcomed for a stronger, more robust consumer protection program.”

“As the body that regulates timeshare in the state, we’re proud to have gained the support of the North Carolina General Assembly to ultimately pass a law that sets our state ahead with the most up-to-date and current regulations in the nation,” said Thoren.

The Commission also thanked all those that came to the table to lend their outside knowledge and expertise on issues that they’re seeing and needed to be addressed to protect consumers.

“We’re also grateful to have had the help of the American Resort Development Association, the trade association for the timeshare industry, who graciously lent us their knowledge and expertise as we crafted and worked on this legislation,” said Thoren.

Here’s what third parties are saying about the update to the state’s timeshare laws:

“This new law includes language that addresses how the timeshare industry has evolved over the years,” said Robert Clements, Vice President of Regulatory Affairs and General Counsel for the American Resort Development Association (ARDA). “We commend the Commission for putting together a law that can serve as a model for other states looking to update what they have in statute, and we thank the General Assembly and the Governor for their support. We take pride in having been able to help the Commission, and we’re happy to continue to be a resource to them as they implement the law, as well as for any other states looking to modernize their timeshare laws.”

“This is a win for consumers, as this law regulates timeshare exit issues that harm timeshare owners and the industry as a whole,” said Elizabeth Baker, Vice President, State Legislative/Regulatory Official Outreach for the American Resort Development Association-Resort Owners’ Coalition (ARDA-ROC), an organization that represents over 1.6 million timeshare owners. “As we’ve seen time and again, unscrupulous exit companies take advantage of owners looking for exit options, and this is a first-of-its-kind legislation that works to combat that.”