By Corean E. Hamlin, Director, Education and Licensing Division
Most NC Real Estate Commission forms concerning license status and affiliation are now web-based forms, or “webforms,” that can be completed and submitted on any desktop or laptop computer or mobile device with an Internet connection. The webforms are designed to be user-friendly and dynamic, gathering only pertinent information and taking only a few minutes to complete.
Following are the three most common questions Commission staff members are asked about forms:
Q: “I submitted a form and received a confirmation it was submitted, but my license record hasn’t been updated, yet. What’s happening?”
A: When you submit a webform, you will receive a confirmation that the form was submitted properly and has been received in our system. Even though forms are submitted electronically, most forms are processed by Commission staff members. The amount of time it will take to process your form depends on the type of form and the time of year. Once your form has been processed, a “Notice of License Record Change” will be sent to you by postal mail or email. If the Commission needs additional information to process the form or if the form is denied, you will be notified in writing either by email or postal mail.
Q: “I submitted a form, but I don’t want it to be processed yet. Can the Commission hold it for me until a certain date?”
A: When a form is received, it is immediately placed in queue for processing. Commission staff members cannot hold forms.
Q: “Which form should I use?”
A: If you are unsure which form applies to your request or needed record change, please don’t guess. Call or email the Commission office, and one of our License Specialists will help you identify the appropriate form. Submitting the wrong form could result in unwanted changes to your license record, especially if you are a Broker-in-Charge (BIC) or a Qualifying Broker (QB) of an office or firm.
Have other questions or feedback about the Commission’s forms? Feel free to contact our office at 919.875.3700 or ls@ncrec.gov.
This article came from the February 2018-Vol48-3 edition of the bulletin.
PATRICIA E. ALLEN (Matthews) – By Consent, the Commission reprimanded Ms. Allen effective October 18, 2017. The Commission found that in 2012, Ms. Allen listed a home for sale and advertised that it contained four bedrooms but failed to pull the septic permit; contrary to her firm’s policy requiring agents to pull permits for properties serviced by a septic system prior to advertising; and that the current owners discovered in 2016 that the system only allowed for three bedrooms.
SCOTT RICHARD ANGELO (Asheville) – By Consent, the Commission suspended the broker license of Mr. Angelo for a period of 12 months effective December 31, 2017. The Commission then stayed the suspension for a period of probation. The Commission found that Mr. Angelo was a provisional broker affiliated with a licensed real estate brokerage firm and signed an Exclusive Buyer Agency Agreement and an Offer-to-Purchase Contract on behalf of another licensed firm with whom he was not affiliated; and that Mr. Angelo failed to ensure that personal property requested by the buyer client to be conveyed with the real property was actually conveyed at closing, as no written addendum to the contract was executed nor was an inventory made of such items.
BEAR CREEK REALTY INC (Hope Mills) – By Consent, the Commission permanently revoked the firm license of Bear Creek Realty effective September 13, 2017. The Commission found that Bear Creek Realty failed to safeguard funds held for others and retain trust account records as required by the Commission; that Bear Creek Realty failed to produce trust account records upon request by the Commission on multiple occasions; and that the trust account appears to be short in an amount in excess of $60,000.
BEAR LAKE REALTY LLC (Tuckasegee) – The Commission accepted the permanent voluntary surrender of the firm license of Bear Lake Realty effective January 1, 2018. The Commission dismissed without prejudice allegations that Bear Lake Realty violated provisions of the Real Estate License Law and Commission rules. Bear Lake Realty neither admitted nor denied misconduct.
KYLE MARTIN BENDER (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Bender for a period of 12 months effective December 31, 2017. The Commission then stayed the suspension of Mr. Bender for a probationary period. The Commission found that Mr. Bender acted as the listing agent for a residential property which received multiple offers; that at the seller’s request, Mr. Bender asked the buyer agents to submit their client’s highest and best offer and disclosed the terms of the current highest offer to those agents; that Mr. Bender failed to receive the express authority of the offering party before disclosing this information; and that the seller ultimately went under contract with a buyer other than the one whose offer details were disclosed.
JAMES P. BENNETT (Maggie Valley) – By Consent, the Commission reprimanded Mr. Bennett effective February 15, 2018. The Commission found that Mr. Bennett, as qualifying broker and broker-in-charge of a licensed real estate brokerage firm, allowed an unlicensed individual to communicate with clients and potential clients of the firm in a manner that made the unlicensed individual appear to be a broker; that the unlicensed individual appeared to negotiate rental rates and fees on behalf of the firm; and that Mr. Bennett failed to supervise the receipt of agency agreements thereby allowing the firm to advertise and rent a property without having an executed agency agreement.
MARION J. BLEDSOE (Hope Mills) – By Consent, the Commission permanently revoked the broker license of Ms. Bledsoe effective September 13, 2017. The Commission found that Ms. Bledsoe assumed responsibility for the maintenance and retention of her firm’s trust account records and converted money from the trust accounts to cover expenses for the firm and herself, failed to safeguard the funds held for others or to maintain and retain trust account records as required by the Commission; and failed to produce trust account records upon request by the Commission on multiple occasions.
BLUE RIDGE MOUNTAIN RENTALS (Blowing Rock) – By Consent, the Commission suspended the firm license of Blue Ridge Mountain Rentals for a period of one year effective October 1, 2017. The Commission then stayed the suspension for a probationary period until October 1, 2018. The Commission found that Blue Ridge Mountain Rentals failed to maintain its trust account and trust account records in compliance with the Real Estate License Law and Commission rules in that deposit tickets were not properly labeled, ledgers and subsidiary ledgers were not properly maintained, and accounts not properly reconciled; that Blue Ridge Mountain Rentals engaged in deficit spending in owner accounts; and that Blue Ridge Mountain Rentals’ trust accounts had an overage exceeding $18,000.
MARK P BODFORD (Wrightsville Beach) – By Consent, the Commission suspended the broker license of Mr. Bodford for a period of six months effective October 31, 2017. The Commission then stayed the suspension for a period of probation through October 30, 2020. Mr. Bodord is also prohibited from acting as a broker-in-charge for five years. The Commission found that in November 2016, Mr. Bodford pleaded guilty to one count of Concealment of Assets in Bankruptcy Proceedings; and received a three-year probationary sentence; that the federal charge related to Mr. Bodford’s failure to disclose $55,000 on his bankruptcy petition in November of 2012; and that, upon this discovery, the bankruptcy trustee’s final report included an adjustment for the $55,000 as cash on hand and this money was paid by Mr. Bodford.
DAVID KEITH BOONE (Durham) – By Consent, the Commission reprimanded Mr. Boone effective January 1, 2018. The Commission found that Mr. Boone, in 2016, was the listing agent for a property and advertised the square footage in the MLS using the data recorded in the county tax records; that Mr. Boone’s advertised square footage was 22% larger than the square footage measured by an appraiser; that the potential buyers were unable to negotiate a new deal with the seller and terminated the contract; and that the potential buyers lost their due diligence money, inspection fees, and appraisal fee.
WESLEY STEPHEN BOURKE (Asheville) – By Consent, the Commission suspended the broker license of Mr. Bourke for a period of 12 months effective September 19, 2017. The Commission then stayed the suspension for a period of probation. The Commission found that Mr. Bourke reported to the Commission that on November 1, 2016, he pleaded guilty to Level Two DWI and was placed on supervised probation for a period of eighteen months and forced to surrender his driver license for one year; and that Mr. Bourke had previously been convicted of Level Two DWI in 2010 and of Level 5 DWI in 2008.
ODELL F. BULLINGTON (Ocean Isle Beach) – By Consent, the Commission suspended the broker license of Mr. Bullington for a period of 12 months effective September 19, 2017. The Commission found that Mr. Bullington disclosed to the Commission his March 2016 conviction of felonious possession, with intent to manufacture, sell, or deliver a Schedule 1 Controlled Substance; that Mr. Bullington was incarcerated for six (6) months and received post-release supervision until June 4, 2017; that Mr. Bullington failed to report this conviction to the Commission within sixty (60) days of the judgement or his release from prison; and that a review of Mr. Bullington’s criminal record found that he also failed to disclose multiple misdemeanor convictions from the mid to late 1990’s on his 2000 license application.
MARTHA BRANNON BULLOCK (Greenville) – By Consent, the Commission suspended the broker license of Ms. Bullock for a period of 36 months effective September 1, 2017. The first two months of the suspension were active with the remainder stayed for a probationary period through August 31, 2020. Ms. Bullock may not engage in property management or act as a broker-in-charge for a period of five years. The Commission found that in October 2015, Ms. Bullock executed an Exclusive Property Management Agreement and Residential Rental Contract for a property and used her firm’s name as agent without the knowledge of her broker-in-charge (“BIC”); that the property owner terminated the agreement and hired another licensed firm; that the tenant security deposit transferred by Ms. Bullock to the new firm and the last rental proceeds check Ms. Bullock sent to the owner were not drawn from an account designated “trust” or “escrow” and were returned “NSF” by the new firm’s bank; that these funds were ultimately reimbursed by Ms. Bullock’s BIC by using Ms. Bullock’s earned commission from recent property closings; and that Ms. Bullock failed to maintain all documents regarding the management of this property and failed to follow all Commission trust account management rules.
CAROLINA VACATIONS INC. (Maggie Valley) – By Consent, the Commission reprimanded Carolina Vacations effective February 15, 2018. The Commission found that Carolina Vacations allowed an unlicensed individual to communicate with clients and potential clients of the firm in a manner that made the unlicensed individual appear to be a broker; that the unlicensed individual appeared to negotiate rental rates and fees on behalf of the firm; and that Carolina Vacations failed to supervise the receipt of agency agreements thereby allowing the firm to advertise and rent a property without having an executed agency agreement.
CHARLOTTE PROPERTY MANAGEMENT AND RENTAL SERVICES, LLC (Charlotte) – By Consent, the Commission suspended the firm license of Charlotte Property Management And Rental Services, LLC for a period of three years effective April 1, 2017. The Commission then stayed the suspension for a probationary period from April 1, 2017 to April 1, 2020. The Commission found that Charlotte Property Management And Rental Services, LLC failed to properly supervise an unlicensed bookkeeper it employed; failed to review and maintain its trust account records each month; that, as a result of these failures the unlicensed bookkeeper converted to personal use over $200,000 of money held in trust for others by the firm; and that the firm notified the North Carolina State Bureau of Investigations of the bookkeeper’s conversion of trust funds, has funded its trust accounts, and has new policies and procedures to prevent this type of issue in the future.
DAVID W COMBS (Rocky Mount) – By Consent, the Commission reprimanded Mr. Combs effective December 31, 2017. The Commission found that Mr. Combs, acting as qualifying broker and broker-in-charge of a licensed real estate firm, had an interest in a company which developed a subdivision, and an interest in a building company which built homes on lots it owned in the subdivision; that in 2007, plat approval for the subdivision was recorded after Mr. Combs posted a letter of credit for repairs to streets; that in May 2009, a buyer contracted to purchase a house through a contract for deed; that the buyer took possession, but closing was to take place after the purchase price was paid; that in 2014, the purchase was completed and the deed was recorded; that later the city asked Mr. Combs to provide renewed letters of credit or that he make needed repairs to the streets; that a bank acquired title to certain lots and common areas in the subdivision; that Mr. Combs failed to disclose these developments to the buyer; and that Mr. Combs executed a Residential Property and Owners’ Association Disclosure Statement and checked “No Representation” for all items pertaining to the subject property.
MELANIE ROACHE CORBETT (Zebulon) – By Consent, the Commission permanently revoked the broker license of Ms. Corbett effective December 13, 2017. The Commission found that Ms. Corbett, in and between 2008 and 2012, acted as broker-in-charge for a licensed property management firm and converted $15,000 in tenant security deposits held in the firm’s trust account.
MARINA JAMES DANE (Wilmington) – By Consent, the Commission suspended the broker license of Ms. Dane for a period of 24 months effective July 1, 2017. Six months of the suspension were active with the remainder stayed for a probationary period ending July 1, 2019. Mr. Dane shall be ineligible to become or act as a broker-in-charge until July 1, 2022. The Commission found that Ms. Dane on August 16, 2010, was convicted of DWI- Level 5 and was sentenced to 60 days in jail which was suspended to 24 months’ unsupervised probation; that Ms. Dane failed to report this conviction to the Commission; that on July 27, 2015, Ms. Dane was convicted of DWI- Level 2 and was sentenced to seven days in jail and 24 months’ supervised probation; that Ms. Dane failed to report this conviction to the Commission; that on November 18, 2015, Ms. Dane was convicted of Misdemeanor Larceny and failed to report this conviction to the Commission; that on January 23, 2017, Ms. Dane was convicted of Misdemeanor Larceny and was sentenced to 45 days in jail which was suspended to 12 months’ supervised probation; and that Ms. Dane failed to respond within 14 days to a Letter of Inquiry from the Commission’s staff.
MARGARET M. DYER (Corolla) – By Consent, the Commission suspended the broker license of Ms. Dyer for a period of one year effective November 1, 2017. Two months of the suspension were active with the remainder stayed. The Commission also permanently prohibited Ms. Dyer from acting as or becoming a broker-in-charge, from maintaining or accessing a trust account, and from practicing property management including managing vacation rentals. The Commission found that Ms. Dyer, acting as the qualifying broker and broker-in-charge of real estate brokerage firm, failed to properly supervise, review, and maintain the firm’s trust account records in accordance with the Real Estate License Law and Commission rules; that Ms. Dyer failed to safeguard funds held in the firm’s trust accounts; and that a broker supervised by Ms. Dyer converted $20,000 in trust money to personal use.
TODD MATTHEW DUNNUCK (Lake Lure) – By Consent, the Commission suspended the broker license of Mr. Dunnuck for a period of two years effective January 1, 2018. The Commission then stayed the suspension for a probation period until January 1, 2020. The Commission found that Mr. Dunnuck, as qualifying broker and broker-in-charge of a licensed real estate firm, listed a tract of undeveloped land as suitable for “Multi-Family, Private Estate, Recreational/2nd House, Residential, Subdevelopment [sic]”; that in 2006, the prior owner ordered a soil test; that soil test which found the soil on the property to be structurally unsuitable to support construction for the proposed project; that a neighboring owner and potential buyer requested the soil test from Mr. Dunnuck; that Mr. Dunnuck passed the soil test on to a potential buyer of the subject property; that subsequently, a licensed real estate broker made an offer and purchased the subject property and that at no time before or during the closing did Mr. Dunnuck provide a copy of the soil test to the broker; that after closing, the broker discovered the soil was structurally unsuitable for the proposed project; and that Mr. Dunnuck and the broker have since reached a mutually satisfactory resolution.
MICHELE DYER (Corolla) – By Consent, the Commission permanently revoked the broker license of Ms. Dyer effective August 17, 2017. The Commission found that Ms. Dyer, while working for a licensed real estate brokerage firm, failed to safeguard funds held in the firm’s trust accounts; that Ms. Dyer commingled personal funds with trust funds and converted trust money to personal use; that Ms. Dyer authorized a $20,000 payment from the firm’s trust account to her brother-in-law to repay a personal loan; and that Ms. Dyer’s actions resulted in a shortage in the firm’s trust accounts.
CASSANDRA LEA ELLISON (Blowing Rock) – By Consent, the Commission reprimanded Ms. Ellison effective October 1, 2017. The Commission found that Ms. Ellison was the broker-in-charge of a rental services firm between June 2014 and November 2015; that a Commission spot audit of the firm’s trust account records from August to September 2015 revealed improperly labeled deposit tickets and ledgers that were not maintained in compliance with the Real Estate License Law and Commission rules; that the firm did not maintain subsidiary ledgers and failed to properly reconcile its accounts; that the firm engaged in deficit spending in owner accounts with; and that the firm’s trust accounts had an overage exceeding $18,000.
CRYSTAL SHULL GRAGG (Hickory) – By Consent, the Commission reprimanded Ms. Gragg effective October 1, 2017. The Commission found that Ms. Gragg, acting as the listing agent for a property, did not measure the subject property prior to listing it in the MLS and, instead, initially relied on the Caldwell County tax records and her sellers’ representations about the subject property’s square footage.
SUSAN B. GRAHAM (Charlotte) – By Consent, the Commission suspended the broker license of Ms. Graham for a period of 30 months effective April 12, 2017. The first six months of the suspension were active with the remaining stayed for a 24-month period of probation. The Commission found that Ms. Graham, while acting as a buyer’s agent on two separate occasions, failed to execute an agency agreement to be signed by her buyer clients; that instead, Ms. Graham admitted to creating a DocuSign account under both of the buyer’s names, and signing the buyers’ names to key Agency Agreements, without their knowledge or consent. The Commission notes that Ms. Graham fully cooperated with the investigation and that both buyers ultimately purchased the subject properties with the help of other agents.
STEPHEN WORTH GUTTU (Edenton) – By Consent, the Commission suspended the broker license of Mr. Guttu for a period of 24 months effective October 18, 2017. The Commission found that Mr. Guttu pled guilty on March 13, 2017 to misdemeanor Assault to Inflict Serious Injury and was sentenced to 60 days in jail that was suspended to 18 months supervised probation.
RYAN A. HOLLINS (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Hollins for 36 months effective April 1, 2017. Six months of the suspension were active with the remainder stayed for a probationary period through April 1, 2020. The Commission found that Mr. Hollins, acting as the Qualifying Broker and Broker-in-Charge of a licensed property management and rental services firm, failed to properly supervise an unlicensed bookkeeper employed by the firm; that Mr. Hollins failed to review and maintain the firm’s trust account records each month; and that, as a result of Mr. Hollins’ failures, the unlicensed bookkeeper converted over $200,000 of money held in trust for others by the firm to her personal use. The Commission noted that Mr. Hollins notified the North Carolina State Bureau of Investigations of the bookkeeper’s conversion of trust funds, funded the firm’s trust accounts, and implemented new policies and procedures to prevent this type of issue in the future.
HOMEPLACE PROPERTY MANAGEMENT LLC (Raleigh) – By Consent, the Commission permanently revoked the firm license of Homeplace Property Management effective December 13, 2017. The Commission found that the broker-in-charge (BIC) of Homeplace Property Management allowed her unlicensed son and his wife, a provisional broker, to perform all brokerage activities and trust accounting for the firm and merely reviewed financials provided to her by her son; that the BIC ceased acting as broker-in-charge of Homeplace Property Management in and around July 2016, but did not cancel the firm license or confirm that the firm had ceased operations; and that the unlicensed operator of Homeplace Property Management converted approximately $128,000 in trust funds to his own use both during and after the period the BIC acted as broker-in-charge.
JAMES SCOTT HUNTER (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Hunter for a period of two years effective December 31, 2017. The Commission then stayed the suspension for a probationary period, ordered that Mr. Hunter comply with all NC DMV license restrictions, and restricted him from transporting customers or clients should his vehicle require an interlock device. The Commission found that Mr. Hunter pleaded guilty to Level 5 DWI in 2009, in Mecklenburg County and that he failed to report this conviction to the Commission; that Mr. Hunter pleaded guilty to Level 2 DWI in 2016, in Mecklenburg County and failed to report this conviction to the Commission; and that Mr. Hunter pleaded guilty to Level 1 DWI in 2017, in Mecklenburg County and that Mr. Hunter timely reported this conviction to the Commission. Mr. Hunter has met all of the terms of his unsupervised probation.
STEPHANIE RAE HUDSPETH JOHNSON (Asheville)- Following a hearing, the Commission suspended the license of Ms. Johnson, effective January 31, 2018, for a period of twenty-four (24) months. The Commission then stayed the suspension for a probationary period through January 30, 2020, upon Ms. Johnson’s completion of certain real estate education. The Commission found that Ms. Johnson was affiliated with a licensed real estate firm, but after leaving the firm, Ms. Johnson communicated with tenants occupying a property managed by the firm regarding their receipt of a notice to vacate and upcoming summary ejectment hearing; that Ms. Johnson accessed a Zip forms database used to manage the property; that Ms. Johnson created and filled out a Move-in Inspection Form for the tenants and backdated the document; that the Move-in Inspection Form was then presented by the tenants to a magistrate during a summary ejectment hearing where the magistrate denied the firm’s motion to summarily eject the tenants.
KARICHELE REALTY INC. (Corolla) – By Consent, the Commission permanently revoked the firm license of Karichele Realty effective November 1, 2017. The Commission found that Karichele Realty, through its qualifying broker/broker-in-charge, failed to properly maintain its trust account records in compliance with Commission Laws and rules; that Karichele Realty failed to safeguard funds held in its trust accounts; that personal funds were commingled with trust funds and an unaffiliated broker converted trust money to personal use; that Karichele Realty’s actions resulted in a shortage in the trust accounts; and that the firm failed to timely remit money owed to property owner clients.
WILLIAM F. LUTHER III (Hope Mills)- By Consent, the Commission revoked the broker license of Mr. Luther effective January 2, 2018. The Commission found that Mr. Luther, acting as broker-in-charge of a licensed firm, gave full control of the firm’s trust accounts to another broker who subsequently admitted to converting trust monies to her and the firm’s own use leading to a trust account shortage in excess of $80,000; and that Mr. Luther failed to safeguard the funds held for others or to maintain and retain trust account records as required by the Commission.
DAVID N. MATTHEWS (Lake Lure) – By Consent, the Commission suspended the broker license of Mr. Matthews for a period of 24 months effective September 19, 2017. The Commission found that Mr. Matthews, acting as the qualifying broker of a licensed real estate brokerage firm, failed to maintain a trust account journal, property ledgers, or a trial balance for the firm’s trust account; that an audit of the account also discovered a shortage and deficit spending due to Mr. Matthews’ failure to perform monthly reconciliations; that the firm’s website used an unregistered assumed name and the rental agreements failed to comply with the Vacation Rental Act; and that Mr. Matthews handled all aspects of the business because the broker-in-charge was largely absent.
JOHN D. MCCONNELL JR. (Raleigh) – By Consent, the Commission suspended the broker license of Mr. McConnell for a period of three years effective November 1, 2017. The Commission found that Mr. McConnell executed a $125,000 promissory note in favor of a creditor for a loan; that a Deed of Trust was recorded in Wake County that pledged two commercial properties as collateral for the loan; that the two commercial properties that secured the promissory note were sold in a foreclosure sale; that unaware of the foreclosure sale, the creditor loaned $125,000 to Mr. McConnell; that at no time prior to the execution of the promissory note and deed of trust did Mr. McConnell disclose to the creditor that the two commercial properties were subject to foreclosure; that at no time after the deed of trust was recorded or after the foreclosure sale did Mr. McConnell disclose to the creditor that the properties were sold in foreclosure; that Mr. McConnell signed a Confession of Judgment confessing he owed the creditor $125,000 in principal, plus interest and attorneys’ fees; and that at the time of this Consent Order, Mr. McConnell had paid the creditor funds totaling $101,225.89.
MTN LAND PROPERTIES LLC (Lake Lure) – By Consent, the Commission suspended the firm license of MTN Land Properties for a period of two years effective January 1, 2018. The Commission then stayed the suspension for a probation period until January 1, 2020. The Commission found that MTN Land Properties listed a tract of undeveloped land as suitable for “Multi-Family, Private Estate, Recreational/2nd House, Residential, Subdevelopment [sic]”; that in 2006, the prior owner ordered a soil test; that soil test found the soil on the property to be structurally unsuitable to support construction for the proposed project; that a neighboring owner and potential buyer received the soil test from MTN Land Properties; that MTN Land Properties passed the soil test on to a potential buyer of the subject property; that subsequently, a licensed real estate broker made an offer and purchased the subject property and that at no time before or during the closing did MTN Land Properties provide a copy of the soil test to the broker; that after closing, the broker discovered the soil was structurally unsuitable for the proposed project; and that MTN Land Properties and the broker have since reached a mutually satisfactory resolution.
RANDY DALE NEALEY (Charlotte) – Following a hearing, the Commission permanently revoked the broker license of Mr. Nealey effective November 20, 2017. The Commission found that Mr. Nealey, acting as broker-in-charge and qualifying broker of a real estate brokerage firm, conducted property management for its landlord clients; that a landlord client filed a complaint with the Commission alleging that Mr. Nealey had not remitted rental proceeds for January, February, and March 2016, had not communicated since January 2016, and that all of Mr. Nealey’s phone numbers were out of service; that another landlord client filed a complaint with the Commission alleging that Mr. Nealey was not collecting rent from tenants, did not collect a tenant security deposit from the current tenants, and had ceased all communications; that the Commission attempted to contact Mr. Nealey but was unable to locate him or to receive responses to any form of communication; that Mr. Nealey did not provide any records requested by the Commission; and, that a review of Mr. Nealey’s bank records revealed two accounts from which transfers were made for personal use, funds of landlord clients were commingled with his own, and the accounts were not in compliance with the Real Estate License Law and Commission rules.
NORMA CLAYTON REALTY CO LLC (Brevard) – By Consent, the Commission reprimanded Norma Clayton Realty effective January 1, 2018. The Commission found that Norma Clayton Realty failed to maintain trust account and trust account records in compliance with the Real Estate License Law and Commission rules; that deposit tickets were not properly labeled or maintained, ledgers were not properly maintained, reconciliations were not accurate, trial balances were not regularly performed, and, in some cases, Norma Clayton Realty failed to re-issue client checks that had gone uncashed for a period of time; and that an audit of Norma Clayton Realty’s trust account revealed an overage.
DUKE GREGORY PARRISH (Brevard) – By Consent, the Commission reprimanded Mr. Parrish effective January 1, 2018. The Commission found that Mr. Parrish, acting as the qualifying broker and broker-in-charge of a licensed real estate brokerage firm, failed to maintain the firm’s trust account and trust account records in compliance with the Real Estate License Law and Commission rules; that deposit tickets were not properly labeled or maintained, ledgers were not properly maintained, reconciliations were not accurate, trial balances were not regularly performed, and, in some cases, Mr. Parrish failed to re-issue client checks that had gone uncashed for a period of time; and that an audit of Mr. Parrish’s trust account revealed an overage.
PATTON PROPERTY GROUP LLC (Asheville) – By Consent, the Commission suspended the firm license of Patton Property Group for a period of 12 months effective December 31, 2017. The Commission then stayed the suspension for a period of probation. The Commission found that the broker-in-charge (BIC) of Patton Property Group supervised a provisional broker and allowed the provisional broker to sign an Exclusive Buyer Agency Agreement and Offer-to-Purchase Contract on behalf of another licensed firm with whom he was not affiliated; that the BIC of Patton Property Group failed to actively and directly supervise the provisional broker who failed to ensure that personal property requested by the buyer client to be conveyed with the real property was actually conveyed at closing; that the BIC of Patton Property Group allowed the provisional broker to receive compensation from someone other than his BIC; and that the BIC of Patton Property Group allowed a licensed broker from another firm to work with her firm as a showing agent when the necessary secondary affiliation paperwork was never filed with the Commission.
ROWENA PATTON (Asheville) – By Consent, the Commission suspended the broker license of Ms. Patton for a period of 12 months effective December 31, 2017. The Commission then stayed the suspension for a period of probation. The Commission found that Ms. Patton, while acting as broker-in-charge, supervised a provisional broker and allowed the provisional broker to sign an Exclusive Buyer Agency Agreement and Offer-to-Purchase Contract on behalf of another licensed firm with whom he was not affiliated; that Ms. Patton failed to actively and directly supervise the provisional broker as he failed to ensure that personal property requested by the buyer client to be conveyed with the real property was actually conveyed at closing; that Ms. Patton allowed the provisional broker to receive compensation from someone other than Ms. Patton; and that Ms. Patton allowed a licensed broker from another firm to work with her firm as a showing agent when the necessary secondary affiliation paperwork was never filed with the Commission.
BRENDA R. PORTER (Raleigh) – By Consent, the Commission revoked the broker license of Ms. Porter effective January 1, 2018. The Commission found that Ms. Porter in 2014, obtained a license for a firm and designated herself as its qualifying broker and broker-in-charge; that Ms. Porter allowed her unlicensed son and his wife, a provisional broker, to perform all brokerage activities and trust accounting for the firm and merely reviewed financials provided to her by her son; that Ms. Porter ceased acting as broker-in-charge of the firm in and around July 2016, but did not cancel the firm license or confirm that the firm had ceased operations; and that the unlicensed operator of the firm converted approximately $128,000 in trust funds to his own use both during and after the period Ms. Porter acted as broker-in-charge.
PROPERTIES PLUS INC. (Statesville) – By Consent, the Commission suspended the firm license of Properties Plus effective September 19, 2017. The Commission then stayed the suspension for a probationary period. The Commission found that Properties Plus held a Property Management Agreement (“PMA”) to manage eight rental properties; that Properties Plus failed to provide monthly statements of all monies received and disbursed to the property owners as required by the PMA; that during an audit of the firm’s trust account, deficient spending was discovered and the broker-in-charge immediately funded the account; and that it does not appear that any consumers were harmed. The Commission notes that upon termination of the PMA by the property owners, all entrusted funds were accounted for and sent to the new management company.
SCARLETT PROPERTIES LLC (Charlotte) – By Consent, the Commission suspended the firm license of Scarlett Properties for a period of 12 months effective December 31, 2017. The Commission then stayed the suspension of Scarlett Properties for a probationary period. The Commission found that Scarlett Properties acted as the listing firm for a residential property which received multiple offers; that at the seller’s request, Scarlett Properties asked all of the buyer agents to submit their client’s highest and best offer and disclosed the terms of the current highest offer to those agents; that Scarlett Properties failed to receive the express authority of the offering party before disclosing this information; and that the seller ultimately went under contract with a buyer other than the one whose offer details were disclosed.
ROBERT B. SECHRIST (Statesville) – By Consent, the Commission reprimanded Mr. Sechrist effective September 19, 2017. The Commission found that Mr. Sechrist was affiliated with a licensed real estate brokerage firm and signed a Property Management Agreement (“PMA”), on behalf of the firm to manage eight rental properties owned by three siblings; that Mr. Sechrist, despite knowing that current tenants of these properties were bound by pre-existing leases which contained some unlawful language, failed to execute new leases with these tenants; and that Mr. Sechrist also failed to provide monthly statements of all monies received and disbursed to the property owners as required by the PMA. The Commission notes that upon termination of the PMA by the property owners, all entrusted funds were accounted for and sent to the new management company.
JASON REID SMITH (Stanfield) – By Consent, the Commission permanently revoked the broker license of Mr. Smith effective September 13, 2017. The Commission found that Mr. Smith in October 2012 induced a recent widow to invest in two properties owned by Mr. Smith; that the widow invested $50,000 for each property for a total investment of $100,000; that Mr. Smith signed two promissory notes promising to pay the widow the principal plus interest; that the promissory notes state that the investments are secured by the properties; that Mr. Smith has defaulted on both promissory notes and never recorded deeds of trust in the county register; that in July 2016, Mr. Smith promised an investigator for the Consumer Protection Division of the North Carolina Department of Justice that he would repay the principal of the investment to the investor; and that Mr. Smith at this time has not repaid any money to the widow.
SQUARE REALTY INC. (Charlotte) – Following a hearing, the Commission permanently revoked the firm license of Square Realty Inc. effective November 20, 2017. The Commission found that Square Realty conducted real estate brokerage and property management for its landlord clients; that on or about March 29, 2016, a landlord client filed a complaint with the Commission alleging that Square Realty had not remitted rental proceeds for January, February, and March 2016, had not communicated since January 2016, and that the phone numbers of Square Realty and its broker-in-charge were out of service; that on May 12, 2016, a landlord client filed a complaint with the Commission alleging that Square Realty was not collecting rent from tenants, did not collect a tenant security deposit from the current tenants, and had ceased all communications; that the Commission attempted to contact Square Realty but was unable to locate the firm or to receive responses to any form of communication; that Square Realty did not provide any records requested by the Commission; and, that a review of Square Realty’s bank records revealed two accounts from which transfers were made for personal use, funds of landlord clients were commingled with those of the broker-in-charge, and the accounts were not in compliance with the Real Estate License Law and Commission rules.
APRIL ATKINSON TAYLOR (Wilson) – The Commission accepted the permanent surrender of the broker license of Ms. Taylor effective September 13, 2017. The Commission dismissed without prejudice allegations that Ms. Taylor violated provisions of the Real Estate License Law and Commission rules. Ms. Taylor neither admitted nor denied misconduct.
THE COMBS COMPANY LLC (Rocky Mount) – By Consent, the Commission reprimanded The Combs Company effective December 31, 2017. The Commission found that David Combs had an interest in a development company which developed a subdivision, and an interest in a building company which built homes on lots it owned in the subdivision; that in 2007, plat approval for the subdivision was recorded after David Combs posted a letter of credit addressing repairs to the streets; that in 2009, a buyer contracted with the building company to purchase a house through a contract for deed; that in 2014, the buyer completed the purhasing, and the deed was recorded; that in 2009 and 2010, the City asked David Combs to provide renewed letters of credit or make needed repairs to the streets; that during this same period, the developer’s bank acquired title to certain lots and common areas in the subdivision; that the Combs Company failed to disclose these developments to the buyer; that also in 2014, David Combs executed a Residential Property and Owners’ Association Disclosure Statement and checked “No Representation” for all items pertaining to the subject property.
THE PROFESSIONALS GROUP (Asheville) – By Consent, the Commission reprimanded The Professional Group effective December 31, 2017. The Commission found that The Professionals Group, a licensed real estate firm, executed an Exclusive Buyer Agent Agreement with a client and represented this client in the purchase of a residential house; that The Professionals Group allowed a provisional broker, who was not affiliated with the firm, to execute both the agency agreement and the Offer to Purchase on behalf of the firm; that The Professionals Group failed to supervise the provisional broker while he represented the firm; that after closing, The Professionals Group paid a commission directly to the provisional broker, rather than to his broker-in-charge; and that The Professionals Group also allowed one of its brokers to work with another firm as a showing agent when the necessary secondary affiliation paperwork was never filed with the Commission.
UNLIMITED RESOURCES LLC (Cary) – By Consent, the Commission permanently revoked the firm license of Unlimited Resources effective December 1, 2017. The Commission found that Unlimited Resources received compensation for a maintenance referral without providing full and timely disclosure to its principal; that Unlimited Resources improperly applied the tenant security deposit for various expenses and failed to provide the tenant with accounting; that Unlimited Resources failed to provide all documents requested by Commission staff; that a review of Unlimited Resources’ tenant security account found that cancelled checks and deposit tickets lacked the required identifying information and were not properly retained; that two expenses from this account were used for a broker’s personal benefit; that a trust escrow journal was not maintained; that an audit trail was lacking and a shortage was present; and that a review of Unlimited Resources’ rental deposits account found that the account contained an overage and that some owners were being overpaid, causing deficit spending.
CHESTER ARTHUR WALKER, JR. (Pineville) – The Commission accepted the voluntary surrender of the broker license of Mr. Walker for a period of one year effective November 15, 2017. The Commission dismissed without prejudice allegations that Mr. Walker violated provisions of the Real Estate License Law and Commission rules. Mr. Walker neither admitted nor denied misconduct.
DIANE MICHELLE WEEDEN (Denver) – By Consent, the Commission suspended the broker license of Ms. Weeden for a period of 24 months effective June 14, 2017, and prohibited Ms. Weeden from serving as a broker-in-charge for five years from December 14, 2017. The Commission found that Ms. Weeden, a provisional broker whose license has been inactive since December 2016, was issued a broker license by the Commission in January 2016 based on information provided by Ms. Weeden in her application and state background checks; that it has now been discovered that Ms. Weeden failed to report that she was found guilty in United States District Court for the Western District of New York of six (6) counts of Bankruptcy Fraud in December 2005, was ordered to pay a $2,500 fine, was incarcerated 14 months, and placed on supervised release for two years.
DEWEY J. WIGGINS (Lenoir) – By Consent, the Commission suspended the broker license of Mr. Wiggins for a period of 24 months effective October 18, 2017. The Commission then stayed the suspension for period of probation. The Commission found that Mr. Wiggins was convicted in District Court on January 26, 2016 of Level 5 DWI and Level 2 DWI; and that Mr. Wiggins was convicted on February 13, 2017 of Aggravated Level I DWI and received 24 months of supervised probation and lost his driving privileges. The Commission noted that Mr. Wiggins timely reported his convictions to the Commission.
EDITH ANNETTE WISE (Asheville) – By Consent, the Commission reprimanded Ms. Wise effective December 31, 2017. The Commission found that Ms. Wise was broker-in-charge of a licensed real estate firm and allowed a provisional broker, who was not affiliated with the firm, to execute both an agency agreement and Offer to Purchase for a client on behalf of the firm; that Ms. Wise failed to supervise the provisional broker while he represented the firm; that after closing, Ms. Wise paid a commission directly to the provisional broker, rather than to his broker-in-charge; and that Ms. Wise also allowed one of her brokers to work with another firm as a showing agent when the necessary secondary affiliation paperwork was never filed with the Commission.
MICHAEL DAVID ZIOLKOWSKI (Huntersville) – By Consent, the Commission suspended the broker license of Mr. Ziolkowski for a period of 12 months effective October 1, 2017. The Commission then stayed the suspension for a probationary period ending October 1, 2018. The Commission found that Mr. Ziolkowski, in January 2017, submitted an application for a firm license; and disclosed a 2003 DUI conviction in New Hampshire and a 2016 possession of marijuana conviction in Utah; that in Mr. Ziolkowski’s 2012 broker application, he failed to disclose the 2003 conviction; that on October 3, 2016, Mr. Ziolkowski was convicted of Possession or Use of a Controlled Substance and Use or Possession of Drug Paraphernalia in Utah and was placed on 18 months’ supervised probation and ordered to a pay a fine; and that Mr. Ziolkowski failed to report the 2016 conviction within 60 days of final judgment.
This article came from the February 2018-Vol48-3 edition of the bulletin.
By Elizabeth W. Penney, Information Officer
Lucky you! You’ve just placed a “hot” listing on the market and you already have an offer. Before you can deliver the offer to the seller, second and third offers arrive.
While you may feel confident in your ability to handle and negotiate a single offer, you may feel less certain in a multiple offer situation. Diligence and fairness to all including your seller-client and the prospective buyers is required to avoid problems. Emotions run high and care is needed to avoid a complaint. Buyers and their agents are impatiently waiting for an answer. Here are a few suggestions to consider when multiple offers occur.
Present all offers immediately. Commission Rule A .0106 states that “every broker shall deliver a copy of any written agency agreement, contract, offer, lease, rental agreement, option or other related transaction documents to their client within five days of the document’s execution.” Preferably, a broker will not wait five days but will deliver an offer to their client as soon as possible. Presenting an offer means personally delivering the offer or transmitting a copy of it to the seller. Oral communication of an offer is not sufficient to satisfy the Commission’s rule. If multiple offers arrive at the agent’s office before he or she has the opportunity to present any offer, the listing agent should try to present all offers at the same time to the seller.
A seller can elect to work only with one offer, or if the seller does not find any offer acceptable, the seller may ask some or all the prospective buyers to submit their highest and best offers. It is the seller who must make that decision, not the listing agent. If the seller calls for highest and best offers, the listing agent should advise all buyers they can submit a new offer or stand by their original offer. Contrary to some thinking, there is no ”first in the door” rule. In other words, in multiple offer situations there is no priority to one offer over another. A seller is not bound to consider offers in the order in which they were received, whether they are full price or exceed full price without concessions.
Shopping offers is strictly prohibited. Since 2008, Commission Rule A.0115 has prohibited brokers from sharing the price or other material terms in offers with competing parties without the express authority of the offering party (the buyer). Generally, there is no advantage to a buyer in sharing their offer’s terms with competing buyers.
In today’s market there are seasoned sellers as well as sellers who need assistance in evaluating offers and assessing the differences in the various terms and conditions. A listing agent can assist the seller in reviewing the different terms in order to choose the best offer for that particular seller. Once an offer is accepted, the seller may consider a back-up offer.
Occasionally a buyer agent asks to be present when an offer is presented. A listing agent should discuss such a request with the seller and allow the seller to make that decision.
Communicate with all prospective purchasers and their agents. A broker is not required to disclose a multiple offer situation, but should answer any questions about whether or not there are multiple offers honestly. The broker should follow the direction of their seller in what the seller wishes to be communicated, but the broker also should not “go dark” and fail to respond to contact attempts by buyers and their agents. By following the advice above, multiple offers can be handled successfully and efficiently with all parties being treated fairly and honestly.
This article came from the October 2017-Vol48-2 edition of the bulletin.
Kaitlin T. Romanelli of Alpharetta, Georgia, Campbell University third-year law student, with Commission Chair Robert J. Ramseur, Jr., and Vice Chair Anna Gregory Wagoner, received the Allan R. Dameron Legal Internship Award at the Real Estate Commission’s June meeting. The award is presented annually in memory of and tribute to former Commission member Allan R. Dameron for his dedicated service in protecting the interests of consumers.
This article came from the October 2017-Vol48-2 edition of the bulletin.
By Stephen L. Fussell,
Sr. Consumer Protection Officer
In April of 2017, a real estate sales transaction was about to close. The buyers’ agent received an email from someone she believed to be a member of the closing attorney’s staff. The email asked for the buyers’ email address. The buyers’ agent replied with the buyers’ email address.
The buyers received a telephone call from someone who identified himself or herself as an employee of their mortgage company advising them that they would soon receive an email with instructions for wiring money to the closing attorney. The buyers then received an email from someone they believed was their agent. This email contained instructions for the buyers to perform a wire transfer to send their down payment in the amount of $52,200 to the closing attorney. The buyers followed these instructions and then sent an email to their agent confirming that they had sent the money as their agent had instructed. The buyers’ agent quickly responded that she had not sent them an email with wire transfer instructions.
The buyers’ agent immediately contacted the closing attorney’s office and discovered that it had not received the $52,200 from the buyers and that all of the aforementioned communications were from a person or group of persons scheming to steal the buyers’ money. Apparently, the person or group of persons had hacked into the broker’s email account and/or computer.
The emails sent by the fraudster(s) contained exact copies of the email signatures of the closing attorney’s office staff member and the buyers’ agent. These email signatures gave the impression of authenticity. However, the email addresses from which these emails were sent were very close to but not the actual email addresses of the closing attorney’s office or the buyers’ agent.
The closing attorney reported the incident to the FBI and contacted the bank that transferred the money and the bank that received the money. However, the receiving bank refused to put a hold on the money thereby enabling the scammers to walk away with the money.
This true story was a difficult lesson for the buyer agent and her buyer-clients. All brokers can learn from this incident. If you receive an email or telephone call from someone asking for personal or financial information about you or a client, exercise care to verify the identity of the person requesting the information before disclosing such information.
In this incident, the buyers’ agent could have called the closing attorney’s office to verify that they needed the buyers’ email address. The agent should have used the attorney phone number she knew, not a phone number provided in the email. This one call would have enabled the buyers’ agent to discover that the closing attorney’s office had not requested the buyers’ email address. The buyers’ agent should also have advised her clients to be cautious about verifying information as well and to not wire money without speaking to someone in the closing attorney’s office first.
Please use this incident as a guide for your future real estate dealings and consider creating procedures to prevent such scams from happening to you or your clients.
This article came from the October 2017-Vol48-2 edition of the bulletin.
By Charlie Moody
Assistant Director, Regulatory Affairs Division
Bokers continue to grapple with the questions: “What can I add to standard form purchase contracts?” “What is drafting?;” “When have I crossed the line?” Commission rule A .0111 allows brokers to complete contract forms when authorized to do so by the parties. In other words, they may “fill in” the blanks in preprinted contract forms, usually with dates or dollar amounts, but may not draft contracts or special contract provisions between other parties.
Any document imposing an obligation between two or more separate persons or entities and supported by consideration is generally a contract, including a “letter of intent” or “memorandum,” an additional provision or addendum to a contract, a lease, option, etc. No matter what such documents are called, they are often actually contracts which must be drafted by an attorney, not a broker.
Brokers are advised to always refer parties to an attorney to have a contract, addendum or special provision drafted when an appropriate form is not available. Moreover, do not use documents from prior transactions that were created for other parties as “forms” to be completed for current transactions. Every situation is unique and may need different language to adequately protect a user’s interests. Don’t draft atypical, special provisions for insertion in contract forms.
But why can’t I?
The Commission cautions against drafting additional terms because it could lead to at least two potential problems:
(1) It could constitute the unauthorized practice of law, and
(2) it often results in the use of vague terms which may confuse the parties or otherwise create problems.
The “practice of law,” as determined by statute and court decisions, includes the drafting of documents which define the rights of others. “Drafting” means composing phrases and sentences to convey an intended meaning by choosing which words to use and the order in which to use them. Therefore, although brokers may believe they are capable of competently drafting contract terms, they are not legally authorized to do so unless they are also Iicensed attorneys. “If”, “then”, “must”, and “shall” are all words that would definitely indicate contract terms are being drafted.
Further, non-attorney brokers drafting contract provisions increase the possibility of vague terms/conditions being used. Vague terms/conditions confuse the parties as to their contractual obligations and/or inadequately protect their interests.
A common type of vague contract term is adding a condition instead of a date. For example, a closing date described as “when the buyer gets financing” is too vague. When is that? Is it when the buyer gets loan approval? Or is it when the lender gives final authorization to disburse? Lenders have been known to back out at any time prior to the disbursement. How is the contingency fulfilled? What happens when ten months have passed and the buyer doesn’t have a loan yet? Has there actually been a breach? Can the seller terminate?
Another commonly added condition requires a party’s satisfaction with certain occurrences. Who determines the standard of “satisfactory”? The buyer? The seller? What if they disagree? A provision drafted and added to or deleted from the contract is especially problematic if the change conflicts with some other term of the contract. Contracts work as a whole with one paragraph often referring to another. Brokers may not always consider that a change to a provision in paragraph 12 may affect rights in paragraph 5.
Parties sometimes disagree over the meaning of a contractual term, and its interpretation is then ultimately determined by the courts. When a court considers a term to be so vague that it can be interpreted two ways, the court usually will interpret it in favor of the party who did not draft it. Therefore, a broker who drafts vague terms does so to the detriment of his or her own client, and risks disciplinary action by the Real Estate Commission, injunctive relief through the State Bar, as well as the possibility of criminal charges.
The Bottom Line: Do not draft contractual terms. If the language supplied by a form does not appropriately address the issues, refer the parties to their attorneys. If another agent or a party to the transaction or even an attorney drafts a contractual term, review it carefully, but also advise your client to have an attorney review the language to see if it meets the needs of the client. Be particularly concerned about any provision which includes a subjective standard (such as “satisfactory”) or is otherwise vague as to fulfillment, does not set a deadline for fulfillment, or does not specifically require notice to the other party and specify how parties are to notify each other of fulfillment.
If you are adding words or conditions other than referencing preprinted addenda, you are likely to be drafting contract language. To ensure that you are best serving your clients and avoiding violating the law as well as treating all of your customers fairly, be sure that drafting the rights and obligations of the parties to the transaction is left to a licensed attorney who can create documents or language specifically for that client or customer.
This article came from the October 2017-Vol48-2 edition of the bulletin.
Three North Carolina brokers recently received scholarships from the Commission for academic excellence in real estate courses.
The recipients, each of whom received $400 for tuition, are Gloria O. Brinkley, Lexington, the Joe Schweidler Memorial Scholarship Award; Julie L. Parrish, Durham, the Blanton Little Memorial Scholarship Award; and Linda J. Mehner, Wilmington, the Phillip T. Fisher Scholarship Award.
Brinkley and Parrish were selected by the North Carolina Association of REALTORS® for achievement in the Graduate Realtors® Institute (GRI) program. Mehner was selected by the North Carolina Chapter of the Council of Residential Specialists for achievement in the Certified Residential Specialists (CRS) program.
Little and Schweidler were former Secretary-Treasurers of the North Carolina Real Estate Licensing Board. Fisher was Executive Director of the Real Estate Commission from 1981 to 2010.
This article came from the October 2017-Vol48-2 edition of the bulletin.
In the article, “Due Diligence Fees: When Are They Refunded?”, in the May 2017 Bulletin, the following sentence appears as the result of a production error: Buyers and sellers may enter into other addenda that may provide for a due diligence fee refund but those provisions must be drafted by the parties or, preferably, by an attorney or by a broker.” The statement, “…or by a broker”, is incorrect; only an attorney or the parties to the contract can draft language for contracts or addenda.
This article came from the October 2017-Vol48-2 edition of the bulletin.
(The following article is copyrighted by and reprinted with the permission of the Association of Real Estate License Law Officials (ARELLO®)).
The Consumer Financial Protection Bureau (CFPB) recently finalized amendments to its “Know Before You Owe” mortgage disclosure rules, one of which should make it easier for real estate professionals to obtain access to the “new” Closing Disclosure (CD) form.
The CFPB TILA-RESPA Integrated Mortgage Disclosure rules (commonly referred to as “TRID”, but labeled “Know Before You Owe” by the CFPB) took effect in October 2015. The rules replaced the previous disclosure forms required in all “federally-related” residential mortgage transactions, including the once familiar HUD-1 settlement statement, with the CFPB’s mortgage Loan Estimate and Closing Disclosure forms.
When the lengthy and intricate new TRID rules took effect, much attention was focused on the resulting compliance issues and mortgage process disruptions that were experienced by mortgage lenders/ originators, title companies and other transaction service providers. Less publicized was an unintended consequence of the rules that left many real estate licensees with difficulties in obtaining copies of completed Closing Disclosure forms from lenders. The problem arose from lender concerns regarding the privacy provisions of the Graham-Leach-Bliley Act (GLBA) and Regulation P, which restrict lender disclosure of customers’ “nonpublic personal information” (NPI) to third parties. This complication, as well as the nature and contents of the Closing Disclosure form, also prompted some state regulators to address the impact of TRID on real estate license law matters such as recordkeeping and transaction closing statement requirements.
The National Association of REALTORS® (NAR) has previously pointed out to the CFPB that, prior to implementation of TRID, real estate agents routinely had access to and used the now-defunct HUD-1 settlement statement to answer client questions about matters such as concessions, escrows, commissions and prorated taxes. NAR has also urged the CFPB to clarify that, under Regulation P, “…it is just as acceptable now as it was before Know Before You Owe for a lender to share the [Closing Disclosure] with third parties ….”
For its part, the CFPB’s rulemaking proposal issued in July 2016 acknowledged that the Real Estate Settlement Procedures Act (RESPA) and its implementing regulations required settlement agents to issue the HUD-1 form to lenders, borrowers, sellers, and their agents. The CFPB also acknowledged that, in accordance with applicable exceptions to the privacy requirements of the GLBA, it [is] “usual, accepted, and appropriate” for creditors and settlement agents to provide the new Closing Disclosure form to consumers, sellers, and their real estate brokers or other agents. Consequently, the CFPB’s recent final rules incorporate its previous informal guidance on the subject and modify the official TRID commentaries to clarify that a creditor may provide separate disclosure forms to a consumer and seller if state law prohibits sharing information in the disclosure form, as well as in any other situation where the creditor chooses to provide separate disclosures, and establishes the three methods that may be used to make such modifications.
Among numerous other amendments, the final rules also create tolerances for “total of payments” calculations, adjust an exemption mainly affecting housing finance agencies and nonprofits, and extend coverage of the disclosure requirements to cooperative units.
This article came from the October 2017-Vol48-2 edition of the bulletin.
Cindy S. Chandler and Thomas R. Lawing, Jr., both of Charlotte, have been reappointed to the North Carolina Real Estate Commission for three-year terms beginning August 1, 2017 and July 1, 2017, respectively, it was announced by Miriam J. Baer, Executive Director.
Chandler was reappointed by President Pro Tempore of the Senate Phil Berger and Lawing was reappointed by Speaker of the House Tim Moore.
This article came from the October 2017-Vol48-2 edition of the bulletin.