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How to Register for the 12-hour Broker-in-Charge (BIC) Course

This article from the October eBulletin is republished here to remind brokers of the new format of the BIC course and the registration process.

Effective October 2019, the 12-hour BIC course is comprised of two segments, an 8-hour online prerequisite segment and a 4-hour live segment taught by Commission staff.

Brokers will register for both segments of the 12-hour BIC course at the same time, and the registration fee will be $110.   During registration, brokers will choose from a list of available 4-hour sessions.  The 4-hour sessions will be offered as either a live classroom environment in Raleigh or a “live online” environment.   Brokers will select their preferred learning environment. Following registration, a broker will be sent a link to the 8-hour segment.

The 8-hour online segment is a self-paced, online course, but it must be completed within 30 days of registration.  During the course, brokers will have to pass a quiz at the conclusion of each module. The broker may not advance to the next module without passing the quiz. In addition, brokers must pass a final examination to successfully complete the 8-hour online segment.

A broker who has not completed the 8-hour online prerequisite segment will not be permitted entry into the 4-hour live segment.  Both segments of the course must be completed within 120 days of registration.

Brokers who fail to complete both segments of the 12-hour course within a 120-day period will be required to register, pay, and restart the course.

The course will no longer be offered in the traditional 12-hour live classroom format.

For more information about the 12-hour BIC course, go to ncrec.gov, click on the Education menu, and select Course Registration.

Disciplinary Actions

RONNIE LAJUAN BROWN-WALTERS (Charlotte) – By Consent, the Commission revoked the broker license of Mr. Brown-Walters effective October 31, 2019. Mr. Brown-Walters agreed that he shall not apply for licensure in North Carolina for a period of three years from the effective date. The Commission found that Mr. Brown-Walters, qualifying broker and broker-in-charge of a real estate brokerage and property management firm, passed the management fees it collected for brokerage services onto an unlicensed company and allowed the unlicensed owner of the unlicensed company to have dominion and control over his firm’s trust accounts. Mr. Brown-Walters allowed an unlicensed company to manage properties for which he signed management agreements and allowed the unlicensed company to advertise properties for rent, which it did not own, for compensation. Mr. Brown-Walters could not produce a management agreement for a property in which his firm held money in trust. A review of the firm’s trust accounts found that the payees listed on ledgers did not always match those listed on the cancelled checks and at numerous times, the journal showed refunds being paid when in fact those checks were being sent to an unlicensed company. 

MENTALLA EFFAT (Charlotte) – By Consent, the Commission suspended the provisional broker license of Ms. Effat for a period from October 3, 2019 through October 31, 2019. 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, who must agree to her supervision, 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 also went under contract to purchase properties, without informing her BIC or providing the firm with copies of transaction documents. Ms. Effat attended a continuing education course as part of her settlement but disputed payment for the course. Ms. Effat has repaid the course fee and chargeback fees to the Commission.

JOSE R MALDONADO (Charlotte) – By Consent, the Commission reprimanded Mr. Maldonado effective December 15, 2019. The Commission found that Mr. Maldonado co-listed five properties with another real estate agent without verifying the seller’s representations that she had the right to sell the properties. Mr. Maldonado and the other agent proceeded to list the properties based on the word of the seller that a divorce settlement authorized her to convey the properties. After the properties went under contract, the seller disclosed she did not have the right to convey the properties.

BOOKIN PAIGE MCLAURIN LLC – The Commission accepted the voluntary surrender for one year of the firm license of Bookin Paige McLaurin effective October 16, 2019. The Commission dismissed without prejudice allegations that the firm violated provisions of the Real Estate License Law and Commission rules. Bookin Paige McLaurin neither admitted nor denied misconduct.

PAIGE MCLAURIN – The Commission accepted the voluntary surrender for one year of the broker license of Ms. McLaurin effective October 16, 2019. The Commission dismissed without prejudice allegations that Ms. McLaurin violated provisions of the Real Estate License Law and Commission rules. Ms. McLaurin neither admitted nor denied misconduct.

VICTOR HUGO MONROY (Charlotte) – The Commission accepted the voluntary surrender for two years of the broker license of Mr. Monroy effective October 16, 2019. The Commission dismissed without prejudice allegations that Mr. Monroy violated provisions of the Real Estate License Law and Commission rules. Mr. Monroy neither admitted nor denied misconduct.

KEVIN DESHAWN MORGAN (Durham) – By Consent, the Commission suspended the broker license of Mr. Morgan for a period of two years effective August 1, 2019. One year of the suspension is active with the remainder stayed. Mr. Morgan agreed that he shall be permanently prohibited from ever acting as or becoming a Broker-in-Charge. The Commission found that Mr. Morgan, acting as a buyer agent, falsified the signatures and initials of the buyers he represented on an “Exclusive Buyer Agency Agreement”, “Working with Real Estate Agents” brochure, and an “Offer To Purchase and Contract” in a residential sales transaction. Mr. Morgan conducted this real estate transaction with an inactive license after receiving notice from the Commission and a warning from his broker-in-charge. Mr. Morgan failed to provide the transaction documents to his firm.

MW PROPERTIES REALTY GROUP LLC (Charlotte) – By Consent, the Commission permanently revoked the firm license of MW Properties Realty Group effective October 31, 2019. The Commission found that the firm engaged in real estate brokerage and property management, and passed the management fees it collected for brokerage services onto an unlicensed company. MW Properties Realty Group allowed the unlicensed owner of the unlicensed company to have dominion and control over its trust accounts, allowed an unlicensed company to manage properties for which it had signed management agreements, and allowed the unlicensed company to advertise properties for rent, which it did not own, for compensation. MW Properties Realty Group could not produce a management agreement for a property in which it held money in trust.  A review of MW Properties Realty Group’s trust accounts found that the payees listed on ledgers did not always match those listed on the cancelled checks and at numerous times, the journal showed refunds being paid when in fact those checks were being sent to an unlicensed company. 

BRANDON CARL NARRON  (Wilson) –  By Consent, the Commission suspended the broker license of Mr. Narron for a period of one year effective September 1, 2019. One month of the suspension is active with the remainder stayed. The Commission found that in and around November 2016, Mr. Narron, a provisional broker, misrepresented the extent of a property’s foundation issues as reported in the buyer’s inspection report to his buyer-client. Mr. Narron then hired an unlicensed repairman to address said issues. In and around June 2017, Mr. Narron, acting as a provisional broker and a dual agent, failed to disclose in writing he represented both parties and failed to advise his buyer-client to order a home inspection. Mr. Narron was also in possession of his seller-client’s prior inspection report and failed to disclose numerous material facts contained in the report to his buyer-client.

TEAM NADINE LLC (Cornelius) – By Consent, the Commission reprimanded Team Nadine effective October 1, 2019. The Commission found that Team Nadine, acting as listing agent, possessed a previous MLS listing accurately disclosing that only one-half of a boathouse was included with the property and that a GIS survey did not accurately show the divided ownership. Team Nadine failed to disclose accurately the shared ownership of the boathouse. A buyer entered into a contract and later terminated upon discovery of the boathouse issue. Team Nadine has entered into a settlement agreement with the buyer.

NADINE LEE WYNN (Cornelius) – By Consent, the Commission reprimanded Ms. Wynn effective October 1, 2019. The Commission found that Ms. Wynn, acting as listing agent, possessed a previous MLS listing accurately disclosing that only one-half of a boathouse was included with the property and that a GIS survey did not accurately show the divided ownership. Ms. Wynn failed to disclose accurately the shared ownership of the boathouse. A buyer entered into a contract and later terminated upon discovery of the boathouse issue. Ms. Wynn has entered into a settlement agreement with the buyer.

Appearances

Stephen L. Fussell, Senior Consumer Protection Officer, spoke to Fonville Morisey Realty in Chapel Hill and to the Charlotte chapter of the National Association of Residential Property Managers.

Shanna L. Hardy, Consumer Protection Officer, spoke to Realty Executives of Hickory.

Sheryl B. Graham, Consumer Protection Officer, spoke to the Hendersonville Board of REALTORS® and at the Jacksonville Board of REALTORS® Education Expo.

Licensees as of September 1, 2019

Appearances

Janet Thoren, Director of Regulatory Affairs, spoke to the North Carolina Association of REALTORS® in Pinehurst.

Frederick A. Moreno, Chief Deputy Legal Counsel, spoke to United Real Estate East Carolina in Greenville and to the Property Management Division of the North Carolina Association of REALTORS ® in Pinehurst.

Nicholas T. Smith, Consumer Protection Officer, spoke to the Asheville Commercial Investment Realty Association, to Keller Williams Realty in Fayetteville, and to REMAX One Hundred in Durham.

Peter B. Myers, Information Officer, spoke to the Asheboro REALTOR® Council of the Greensboro Regional REALTORS® Association.

Postlicensing Education Deadline

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. If you were licensed anytime during 2018, you must complete all your postlicensing courses by July 1, 2020. If you have been licensed in 2019, you will have at least 18 months from your date of licensure to complete the courses.

Example #1: Licensed on February 1, 2018

Example #2: Licensed on March 17, 2019

Additional information about this important change is provided in the 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.

Due Diligence Fees: How and when must they be delivered?

One of the most important documents in a residential real estate sales transaction is the sales contract between the buyer and the seller.  The sales contract details the parties’ agreement, including terms such as price, closing date, warranties, etc.  The North Carolina Statute of Frauds requires real estate sales contracts to be in writing and signed by the parties in order to be enforceable between the parties.  The Standard Form 2-T, Offer to Purchase and Contract, jointly approved by the NC Bar Association and NC Association of REALTORS®, Inc., is a commonly-used sales contract form in residential transactions involving real estate brokers. 

Standard Form 2-T includes a provision for a “Due Diligence Fee,” which is defined as follows:

“A negotiated amount, if any, paid by Buyer to Seller with this Contract for Buyer’s right to terminate the Contract for any reason or no reason during the Due Diligence Period. It shall be the property of Seller upon the Effective Date and shall be a credit to Buyer at Closing. The Due Diligence Fee shall be non-refundable except in the event of a material breach of this Contract by Seller, or if this Contract is terminated under Paragraph 8(n) or as otherwise provided in any addendum hereto.”

In other words, this fee is intended to compensate the seller for the Due Diligence period, during which the buyer may decide whether to proceed with the transaction.  The buyer will receive a credit for the fee at closing.  However, if the contract terminates prior to closing, the buyer forfeits the fee, unless the seller has breached the contract.

When must the fee be delivered?  Provision 1(d) of Standard Form 2-T dictates that the Due Diligence Fee must be “made payable and delivered to the Seller by Effective Date” of the contract.  In other words, the buyer must pay the Due Diligence Fee directly to the seller at the time of contract acceptance. 

How may a buyer transmit the Due Diligence Fee to the seller?  Provision 1(d) of Standard Form 2-T allows a fee to be paid by cash, official bank check, wire transfer, or electronic transfer.  Thus, it is ideal for the buyer to send the fee directly to the seller via personal delivery, postal mail, wire transmission, or other electronic means. 

What if the buyer delivers the Due Diligence Fee to a broker, rather than directly to the seller?  Commission Rule 58A .0116(b)(4) dictates:

“A broker may accept custody of a check or other negotiable instrument made payable to the seller of real property as payment for an option or due diligence fee, or to the designated escrow agent in a sales transaction, but only for the purpose of delivering the instrument to the seller or designated escrow agent. While the instrument is in the custody of the broker, the broker shall, according to the instructions of the buyer, either deliver it to the named payee or return it to the buyer. The broker shall safeguard the instrument and be responsible to the parties on the instrument for its safe delivery as required by this Rule. A broker shall not retain an instrument for more than three business days after the acceptance of the option or other sales contract.”

In short, if a buyer delivers the Due Diligence Fee to a broker, the broker must safeguard the fee and ensure that it is safely and promptly delivered to the seller.  The broker must deliver the fee no later than three business days after contract acceptance. 

Standard Form 2T includes two acknowledgements related to delivery of the Due Diligence Fee. The listing broker acknowledges receipt of the Due Diligence Fee using the Listing Agent Acknowledgement of Receipt of Due Diligence Fee. The listing broker should not sign an acknowledgement of receipt of funds when the buyer has submitted the fee directly to the seller. The seller may acknowledge receipt of the fee using the Seller Acknowledgement of Receipt of Due Diligence Fee.

The 12-hour Broker-in-Charge (BIC) Course is new and improved!

Effective October 2019, the 12-hour BIC course is comprised of two segments, an 8-hour online prerequisite segment and a 4-hour live segment taught by Commission staff.

Brokers will register for both segments of the 12-hour BIC course at the same time, and the registration fee will be $110.   During registration, brokers will choose from a list of available 4-hour sessions, including options for either a live classroom environment in Raleigh or a “live online” environment.   Following registration, a broker will be sent a link to the 8-hour segment.

The 8-hour online segment is a self-paced course, but it must be completed within 30 days of registration.  A broker who has not completed the 8-hour online prerequisite segment will not be permitted entry into the 4-hour live segment.  Both segments of the course must be completed within 120 days of registration.

Brokers who fail to complete both segments of the 12-hour course within a 120-day period will be required to register, pay, and restart the course.

The course will no longer be offered in the traditional 12-hour live classroom format.

For more information about the 12-hour BIC course, go to ncrec.gov, click on the Education menu, and select Course Registration.

Conducting a Safe Open House

By Nicholas T. Smith, Consumer Protection Officer

Seller clients entrust their listing agent to effectively market and expose their property to many prospective buyers. Holding an open house can be an effective marketing tool to gain exposure for a client’s property and can be a great way to find potential buyers. While this additional exposure can be advantageous for selling a home, conducting an open house poses additional risks to a broker and the seller and it is important that brokers take precautions to protect themselves and their client’s property when holding an open house. 

Recently, a man and a woman posing as potential buyers were arrested in connection with multiple thefts occurring during open houses in Southern California. The male suspect distracted the agent conducting the open house while the female suspect went from room to room stealing desired items. Although more rare, brokers also have been victims of violent crimes during open houses, more often when they are alone.

A broker should be sure to discuss with their clients the safety risks of holding an open house and describe the precautions that should be taken to protect the property. When discussing preparations for the open house, a broker should remind their clients to take valuables and prescription drugs with them, or secure them in a safe place. While there is always a possibility of theft from a burglar entering the home under the guise of a potential buyer, the seller stands to lose less when valuables are removed or secured. Additionally, potential burglars who may be “casing” the property to determine if there is anything of value may be less inclined to return later.

Consider taking the following steps to better protect you and your client’s property and ensure a safe open house:

Preparing for a safe open house:

During the open house:

After the open house:

Editors Note: Credit is also attributed to the authors and contributors to the NC Safety Guide including the North Carolina Association of REALTORS ® and the Washington Real Estate Safety Council.

Commission Spotlight: Executive and Administrative Division

This is the first of three articles highlighting the North Carolina Real Estate Commission’s staff and structure. 

The principal purpose of the Real Estate Commission is to protect the interests of members of the general public in their dealings with real estate brokers throughout the state. This is accomplished through:

1. licensing real estate brokers and brokerage firms, and registering time share projects;

2. establishing and administering prelicensing education programs for prospective licensees and postlicensing and continuing education programs for licensees;

3. providing education and information relating to the North Carolina Real Estate License Law and Commission Rules, and 

4. regulating the business activities of brokers and brokerage firms, including disciplining licensees who violate the License Law or Commission rules.

As dictated by N.C.G.S. § 93A-3(a), the Real Estate Commission consists of nine members who serve three-year terms. Seven members are appointed by the Governor and two are appointed by the General Assembly. 

The Commission’s staff is tasked with implementing rules and policy set forth by the Commission. 

As of October 1, 2019, there are 56 Commission staff members, divided between three divisions, Executive & Administrative, Education & Licensing, and Regulatory Affairs.  Miriam Baer is the Executive Director.

This month’s Commission Spotlight is on the Executive and Administrative Division.

The Executive and Administrative Division works to effectively and efficiently administer Commission programs and operations. As Executive Director, Miriam Baer is tasked with management responsibilities as Chief of Staff, and oversight of the Commission’s licensing, education, and regulatory functions.

The Division is supported by eleven full-time staff members.

Primary responsibilities of the Executive and Administrative Division include:

To learn more about the North Carolina Real Estate Commission, go to ncrec.gov or contact us at 919.875.3700.