Bulletin Search
A New Deadline for Postlicensing Education
Beginning July 1, 2020, Rule 58A .1902 will require a Provisional Broker to complete all three 30-hour Postlicensing courses within 18 months of initial licensure in order to maintain active license status.
More information about this important change is provided during General Update (GENUP) and Broker-in-Charge (BICUP) courses throughout the year. Also, if you are a provisional broker, be on the lookout for email communications from the Commission about the changing education deadlines.
If you have further questions regarding this rule change, please contact the Education and Licensing Division at 919.875.3700.
On-site Septic System or Public Water and Sewer – Do Your Research
By Danielle Alston, Consumer Protection Auditor
Since 1993, there have been at least 8 articles published by the Commission on the importance of reviewing septic permits in order to accurately advertise the number of bedrooms for a listed property. This subject has also been covered in at least 3 General Update courses. However, the Commission continues to receive complaints about misrepresentations by overstating the number of bedrooms for a property served by a septic system. If a broker decides to advertise the number of bedrooms for a property, that advertisement should accurately reflect the bedrooms supported by the septic system. In other words, be sure to check the septic permit, specifically, the number of bedrooms the septic permit allows.
Unfortunately, many complaints about septic permit misrepresentations are not received until years after the misrepresentation has been made. The buyer is now ready to sell the home and cannot list it for the same number of bedrooms it was advertised as having when the buyer purchased it. While listing agents are primarily responsible for researching and reviewing septic permits, selling agents should also make it a practice to ask to review permits as a service to their clients. Reliance on old listings only adds to the misrepresentations over several transactions.
Sometimes the original septic permit for a property cannot be located due to the age of the property. Be careful if you are relying on a bill to determine that a property is on city water or sewer. In some cases, the property may only have public water or sewer, but not both. Accuracy is important. If a permit cannot be located after a reasonable search, a broker should document search efforts and obtain something in writing from the municipality stating that the permit cannot be located. The broker can then advertise the existing number of bedrooms with the disclosure that the permit records are not available and therefore capacity of the system could not be verified.
Both listing and selling agents should be able to explain to their clients the value of obtaining a septic permit and what information such permits provide. Disclosures must always be made so that the potential buyer is made aware of material facts before an offer is made.
REMINDER: The Real Estate License Law prohibits misrepresentation, omission, or concealment of material facts; a course of misrepresentation through false advertising; and improper, dishonest, or fraudulent conduct. Willful or negligent misrepresentation of the occupancy or the design limits of a property’s on-site sewage disposal system may result in disciplinary action by the Commission.
Spotlight: Douglas A. Fox, Commissioner
Douglas A. Fox has served on the North Carolina Real Estate Commission since November 2018. He is a senior partner and attorney with Yow Fox & Mannen, LLP, in Wilmington, NC. Mr. Fox’s practice areas are business law, collections, and real estate, along with wills and estates. Mr. Fox’s law partner, Jerry A. Mannen, Jr., was on the North Carolina Real Estate Commission from 2006-2012.
Mr. Fox graduated from Guilford College with a Bachelor’s of Art in 1970 and received his Juris Doctorate degree in 1973 from the Cumberland School of Law of Sanford University. He was admitted to the North Carolina State Bar in 1974. He has also been admitted to practice before the U.S. District Courts, specifically the Eastern and Middle Districts, and the U.S. Court of Appeals, Fourth Circuit.
Mr. Fox served as President of New Hanover County Bar Association from 1986-1987. He is a member of the North Carolina State Bar, North Carolina Academy of Trial Lawyers, and Delta Theta Phi, a legal fraternity.
Doug is married to Marcie Fox. They have been married for over 30 years. He has two sons, David, who lives in Charleston, SC, and Allan, who resides in Wilmington, NC. If Doug is not in the office or spending time with his family, you can find him on a golf course.
It is a Privilege to Practice Brokerage in NC
Did you know a real estate broker must possess a privilege license issued by the North Carolina Department of Revenue in order to practice brokerage?
What is a privilege license? A privilege license is a license to engage in a business, trade, or profession in North Carolina.
To legally engage in brokerage, brokers must first apply for a privilege license and then must pay the privilege license tax annually by July 1.
It is unlawful for any broker to practice brokerage without a privilege license.
Have questions about the privilege license? Contact the North Carolina Department of Revenue at ncdor.gov or 877.252.3052.
Need to apply for a privilege license? Access the application here.
Your Safety Matters!
An excerpt from the North Carolina Real Estate Agent Safety Guide
(This booklet is published as a cooperative venture of the North Carolina Association of REALTORS® and the North Carolina Real Estate Commission.)
Real estate sales and rental agents routinely find themselves in situations where they are alone with clients or customers about whom they have very little information. The very nature of showing real estate to prospective buyers and tenants who are virtual strangers can make agents, both men and women, susceptible to becoming victims of violent crimes.
Recognizing the need for greater attention to real estate agent safety, the North Carolina Association of REALTORS® and the North Carolina Real Estate Commission agreed to cooperate in promoting the education of real estate licensees about agent safety. Through the leadership of the REALTOR® Association’s North Carolina Real Estate Safety Council, this safety guide was published to assist in this educational effort. This guide contains some common sense safety tips that have been compiled from crime victims and real estate associations across the country.
The North Carolina Real Estate Safety Council encourages every real estate firm to implement a formal safety program. Moreover, every real estate agent can and should individually utilize the safety tips addressed in this guide to practice in a safe manner, even if your company does not have a formal safety program.
The four basic safety practices are:
- Identify the person you are working with before you join him or her alone, in a car or a house. Preferably meet him or her at your office, copy his or her driver’s license and make sure someone from your office knows where you’ll be going with the person.
- Always carry your cell phone with you and make sure it is fully charged and has reception. Program 911 into speed dial and don’t hesitate to call for help. Make sure your method of communication utilizes the most current technology.
- Trust your instincts. If you have a bad feeling, don’t second-guess what it’s telling you. Listen to your gut feeling and protect yourself.
- Never assume you are safe.
The North Carolina Real Estate agent Safety Guide provides an additional 12 general safety tips for licensees. The Safety Guide can be found on the NC Real Estate Commission’s website by clicking here.
Appearances
Frederick A. Moreno, Chief Deputy Legal Counsel, spoke to the Raleigh office of Fonville Morisey Real Estate.
Jean A. Wolinski-Hobbs, Auditor/Investigator, spoke to Allen Tate Company in Charlotte.
Peter B. Myers, Legal Information Officer, spoke to REMAX Leading Edge in Concord.
Disciplinary Actions
MARC ANDREW CASORIA (Hendersonville) – By Consent, the Commission reprimanded Mr. Casoria effective June 26, 2019. The Commission ordered Mr. Casoria to comply with all restrictions imposed on his driving privileges and, during the period Mr. Casoria is restricted to driving a vehicle equipped with an ignition interlock device, he shall not operate a motor vehicle while transporting real estate clients or customers. The Commission found that Mr. Casoria, on or about February 28, 2019, was convicted of a Level II DWI and timely disclosed this DWI on April 1, 2019. Mr. Casoria was sentenced to seven days in jail with 120 days suspended, 12 months of supervised probation, a 12-month driver’s license suspension, and substance abuse assessment and treatment.
CENTURY 21 TRIANGLE PROPERTY MANAGEMENT (Raleigh) – By Consent, the Commission reprimanded Century 21 Triangle Property Management effective June 10, 2019. The Commission found that the firm operated as a property management firm without first obtaining a license from 2014 to April 19, 2018 and allowed day-to-day operations to be run by an unlicensed individual. The firm failed to maintain trust account records in compliance with Commission rules including failure to include required information on ledgers, holding rents in an operating account and reconciliations not being performed in a timely manner. The Commission noted that the firm’s trust account records are currently in substantial compliance with Commission rules.
MENTALLA EFFAT (Charlotte) – By Consent, the Commission suspended the broker license of Ms. Effat for a period of 12 months effective June 14, 2019. The Commission then stayed the suspension for a probationary period through June 13, 2020. The Commission required that Ms. Effat’s license status remain as provisional broker for a period of five years from the effective date and required completion of all postlicensing courses within 18 months. In addition, Ms. Effat must inform current and future BIC’s of this Consent Order and provide her BIC with all executed transactional documents within 24 hours of execution, so long as she is a provisional broker. The Commission found that Ms. Effat left one firm to join another and believed that she could take two buyer clients of the former firm with her to the new firm. Ms. Effat created and provided termination agreements to the two buyer clients after her employment by the former firm had ended. Both buyers signed agency agreements with Ms. Effat and her new firm prior to signing the termination agreements with the former firm. Furthermore, the former firm did not sign the termination agreements releasing the buyers from their contract. Once Ms. Effat was advised by her new BIC that she could not bring these clients to the new firm without permission, Ms. Effat ceased communicating with those buyers. While at the new firm, Ms. Effat executed agency agreements with buyers who went under contract to purchase properties, without informing her BIC or providing the firm with copies of transaction documents.
LORI LOVE (Mount Pleasant) – The Commission accepted the permanent voluntary surrender of the broker license of Ms. Love effective July 22, 2019. The Commission dismissed without prejudice allegations that Ms. Love violated provisions of the Real Estate License Law and Commission rules. Ms. Love neither admitted nor denied misconduct.
LYRUBEC PROPERTIES LLC (Charlotte) – By Consent, the Commission suspended the firm license of Lyrubec Properties for a period of 24 months effective June 14, 2019. The Commission then stayed the suspension for a probationary period from June 14, 2019 until June 13, 2021. The Commission found in a review of Lyrubec Properties’ two trust accounts that: deposit slips were not designated “trust” or “escrow”; cancelled checks failed to identify the property or owner; bank disbursement transactions failed to identify the purpose for the disbursement; ledgers failed to identify the owner and tenant, the purpose of the monies deposited, or the purpose of disbursements; separate ledger sheets were not maintained for each security deposit; deficit spending existed; and a shortage was present in both accounts. The shortages appear to have been attributed to the former bookkeeper who was arrested and charged with felonious embezzlement. Lyrubec Properties has brought its trust accounts into compliance with Commission rules and the shortages have been funded. The Commission previously reprimanded Lyrubec Properties in 2013 for trust account related issues.
AUDRA L. MELTON (Raleigh) – By Consent, the Commission suspended the broker license of Ms. Melton for a period of 43 months effective November 30, 2017. The Commission found that Ms. Melton self-reported December 10, 2015, convictions of misdemeanor DUI and felonious Homicide by Vehicle while DUI, in Pennsylvania court. Ms. Melton was incarcerated for 18 months and released on parole. Ms. Melton has returned to North Carolina, is on supervised probation through June 30, 2021, and is unable to restore her driving privileges until December of 2020. Ms. Melton’s broker license has been inactive since July 1, 2014.
S K GOODMAN INC (Huntersville) – By Consent, the Commission reprimanded S K Goodman, Inc. effective February 1, 2019. The Commission found that Goodman’s qualifying broker and broker-in-charge supervised a provisional broker who acted as listing agent for a commercial property on which a residential house was located. The owner of the property was living in the house at the time of the listing and told the provisional broker that city water and sewer served the property. Without independently verifying that the property was connected to city sewer, the provisional broker advertised the subject property in the MLS as being connected. After closing on the property, the buyer discovered a septic tank on the premises and the city informed the buyer that the property was connected to city water but not city sewer.
SELLING SOLUTIONS REAL ESTATE (Fayetteville) – By Consent, the Commission permanently revoked the firm license of Selling Solutions Real Estate effective July 31, 2019. The Commission found that Selling Solutions managed a residential property and disbursed rent proceeds to the property owner without receiving a rent payment from the tenants, causing deficit spending. Selling Solutions was unable to produce all financial trust account documents requested by the Commission. A review of Selling Solutions Real Estate’s trust account records found that: deposit slips, checks, and bank statements were not labeled “trust” or “escrow”; cancelled checks failed to identify the purpose for disbursement; deposit tickets failed to identify the purpose of the monies deposited, the date of the deposit, or the remitter; ledger sheets failed to identify to whom disbursements were paid; there was a lack of an audit trail; and that deficit spending was occurring. Selling Solutions Real Estate failed to provide all leases and management agreements to the Commission and disbursed funds from the Tenant Security Deposit account prior to the tenant vacating the subject property and in an amount more than collected, leading to a shortage.
LOUELLA M. VENABLE (Raleigh) – By Consent, the Commission suspended the broker license of Ms. Venable for a period of 12 months effective November 1, 2018. Two months of the suspension were active with the remainder stayed on certain conditions. Ms. Venable agreed not to act as or become a broker-in-charge and not to engage in property management for a period of five years from the effective date of this order. The Commission found that Ms. Venable was qualifying broker and broker-in-charge of a property management firm when the Commission cancelled its license on December 20, 2017. Prior to securing a tenant, Ms. Venable did not have a signed property management agreement with a potential owner-client. Ms Venable, however, provided a signed property management agreement to the Commission during its investigation. Without the potential owner-client’s knowledge or authorization, Ms. Venable used DocuSign to sign the potential client’s name on the property management agreement and provided it to the Commission. Ms. Venable collected $2,125 in management fees despite not having a signed property management agreement with the owner-client. Ms. Venable failed to maintain the firm’s trust accounts and records in compliance with Commission rules.
CHERYL CUNNINGHAM WARREN (Charlotte) – By Consent, the Commission suspended the broker license of Ms. Warren for a period of 24 months effective June 14, 2019. Six months of the suspension are active with the remaining 18 months stayed for a probationary period of two years from December 14, 2019 until December 13, 2021. Ms. Warren may not act as a broker-in-charge for a period of five years from the effective date, must disclose the trust account violations to the new acting broker-in-charge, and must not have control over the firm’s trust account during this period. The Commission found in a review of the firm’s two trust accounts that: deposit slips were not designated “trust” or “escrow”; cancelled checks failed to identify the property or owner; bank disbursement transactions failed to identify the purpose for the disbursement; ledgers failed to identify the owner and tenant, the purpose of the monies deposited, or the purpose of disbursements; separate ledger sheets were not maintained for each security deposit; deficit spending existed; and a shortage was present in both accounts. The shortages appear to have been attributed to the former bookkeeper who was arrested and charged with felonious embezzlement. The firm has brought its trust accounts into compliance with Commission rules and the shortages have been funded. The Commission previously reprimanded the firm in 2013 for trust account related issues.
Reminder: Commission Communication
The NC Real Estate Commission sends communications to licensees using email and postal mail services. It is important for licensees to review all correspondence sent from the Commission in a timely manner to ensure they are in compliance with License Law and Rules. Licensees should verify that their email and mailing addresses are up-to-date, to ensure they don’t miss any correspondence.
You can update your license record by clicking here. If you need further assistance, please contact the Education and Licensing Division at 919.875.3700.