The Commission has commenced rulemaking to reorganize and amend various rules. The specific text of each of the proposed changes is posted on the Commission’s homepage under the heading “Rules.” Following are the changes being considered (with the exception of two rules requiring only minor revisions):
General Brokerage
A. 0103 Licensee Name and Address – Move portions of Rule A. 0105 relating to business names and registration of assumed names into this rule, clarify that licensees doing business under assumed names must register with the register of deeds in each county where the licensee intends to do business, and update the rule concerning names of unlicensed, inactive, active and cancelled brokers in the name of a business.
A. 0105 Advertising – Reorganize the paragraphs to make a more logical presentation.
A. 0107 Handling and Accounting of Funds – Simplify and modernize the rule by separating it into three separate rules (A.0116, .0117, and .0118).
A. 0108 Retention of Records – Adopt a permanent rule the temporary rule recently adopted requiring the retention of broker price opinions and comparative market analyses. Clarify the length of time property management records must be kept after the management relationship ends. (See the BPO article in this issue of the Bulletin on page 1).
A. 0110 Broker-in-Charge – clarify the requirement for sole proprietorships to have a broker-in-charge (“BIC”), require that multiple firms in the same location with one BIC maintain a delivery address that is the same as the address of the BIC, clarify the process by which a broker is designated a BIC, require a BIC who loses BIC-eligibility to take the 12 hour BIC course before being re-designated, and eliminate the requirement that a BIC provide a statement to the Commission about an affiliated broker’s volume of work.
Licensing
A. 0503 License Renewal; Penalty for Operating While License Expired –Change the annual renewal fee from $40 to $45.
A. 0504 Active and Inactive License Status – Permit the submission of license activation forms online.
A. 0506 Provisional Broker to be Supervised by Broker – Require only the BIC to notify the Commission of the affiliation of a broker with the BIC to facilitate online notification of the affiliation to the Commission.
A. 0511 Licensing of Persons Licensed in Another Jurisdiction –Delete obsolete provisions relating to reciprocity and clarify licensing requirements for persons licensed in other states.
A. 0616 Procedures for Requesting Hearings When Applicant’s Character Is In Question – Update the procedures for applicants with character issues to conform to recent changes in the Real Estate License Law relating to mental and emotional fitness.
Broker Price Opinions and Comparative Market Analyses
A. 02201 – .2202 – adopt as permanent rules the temporary rules recently adopted concerning broker price opinions and comparative market analyses.
Time Shares
B. 0102 Registration Fee and B.0103 Renewal of Time Share Project Registration – standardize and increase certain timeshare registration fees.
Comments on any of these proposals are welcome.
This article came from the October 2012-Vol43-2 edition of the bulletin.
Outstanding achievement in REALTORS® Institute and Council of Residential Specialists courses earned three brokers Commission scholarships:
C. Lee Allen, Jr. of Albemarle received the Joe Schweidler Memorial Scholarship; Tony G. Johnson of Greensboro the Blanton Little Memorial Scholarship; and R. Lawrence Mahool of Charlotte the Phillip T. Fisher Scholarship.
Schweidler, Little and Fisher are former Executive Directors of the Commission. The North Carolina Real Estate Educational Foundation selected Allen and Johnson. The North Carolina Chapter of the National Association of REALTORS® Council of Residential Specialists chose Mahool.
This article came from the October 2012-Vol43-2 edition of the bulletin.
Jeffrey J. Sellers, a third-year law student at Campbell University, received the 2012 Allan R. Dameron Legal Internship Award from Commission Chairman Benjamin Cone III. The Commission gives the award annually in memory of and tribute to former Commission Chairman Dameron for his dedicated service in protecting the interests of North Carolina real estate consumers.
This article came from the October 2012-Vol43-2 edition of the bulletin.
There is a line between licensed and unlicensed in the world of real estate brokerage that requires the careful attention of brokers with unlicensed assistants who help them with their business and may work directly with buyers and sellers.
A complaint from a buyer or seller that the “broker” with whom they are working is not licensed as a broker is often followed by the actual broker explaining that the “broker” is really an unlicensed assistant.
The question then arises: Did the assistant cross the line between licensed and unlicensed when providing services requested by the client or the broker?
Because clients do not always know who is licensed in a brokerage office or precisely what rights a license confers, brokers should inform clients of the limits placed on their unlicensed assistants in providing services. Otherwise, there is considerable opportunity for confusion.
The best course of action is to explain matters to the client at the beginning of the relationship and, as an aid in doing that, provide the two lists below which draw that important line between what is allowable and what is not.
Unlicensed assistants MAY:
Receive and forward phone calls, texts and emails to the employing broker or other licensees in a firm;
Submit listings and changes to a MLS provider, but only if the listing or change is based upon data supplied by a broker;
Assist a broker in compiling documents for closing;
Research and obtain copies of documents in the public domain, such as the Registers of Deeds, Clerks of Court, or tax offices;
Obtain keys for listed properties;
Record and deposit trust monies under the close supervision of the office broker-in-charge (BIC);
Type in offer to purchase, contract and lease forms with information provided by brokers;
Check license renewal records and other personnel information pertaining to brokers at the direction of the BIC;
Prepare commission checks and otherwise act as bookkeeper for the firm’s operating account under the close supervision of the BIC;
Place “For Sale” or “For Rent” signs on property at the direction of a broker;
Order and supervise routine and minor repairs at the direction of a broker;
Act as a courier at the direction of a broker;
Coordinate or confirm appointments between brokers and other persons;
Schedule appointments for showing properties listed for sale or rent;
Show rental properties managed by the broker to prospective tenants;
Complete and execute preprinted form leases for rental property managed by the firm.
Answer basic questions from prospective buyers and others about listed properties if the broker has provided the information in promotional materials.
Only licensed brokers MAY:
Show properties for sale to prospective buyers;
Answer questions from prospective buyers and others about listed properties.
Offer opinions as to the seller’s or landlord’s intentions about a listed property;
Solicit listings or management contracts from prospective clients;
Prepare information to be placed in promotional material or advertisements for properties for sale or lease;
Discuss or explain listings, management agreements, offers, agency agreements, leases or other similar matters with persons outside the firm;
Negotiate the amount of rent, earnest money deposits, due diligence fees or other contract provisions in connection with properties listed for sale or rent by the firm.
Finally, remember that if you are a broker-in-charge, you are responsible for all money being held in a trust account and the accuracy of all advertising. Brokers-in-charge should be closely supervising all actions in those areas, especially when those duties are performed by unlicensed persons.
This article came from the October 2012-Vol43-2 edition of the bulletin.
The Commission’s 2013-14 Real Estate Manual is projected to be published in January 2013.
Updated content will include discussion of:
• new law and rules permitting non-provisional brokers to prepare a BPO for a fee;
• a major revision of the Mechanics’ Lien Law; and
• use of the revised Residential Property and Owners’ Association Disclosure Statement effective January 1, 2013.
The Manual will be available in printed form and in electronic forms as a CD-ROM and as a subscription on the Commission’s Web site.
This article came from the October 2012-Vol43-2 edition of the bulletin.
Governor Beverly E. Perdue has reappointed Everett “Vic” Knight of Raleigh to the Real Estate Commission for a term ending in 2015. Knight has been a Commission member since 2009.
This article came from the October 2012-Vol43-2 edition of the bulletin.
Walter “Walt” F. Crayton, Jr., of New Bern has been appointed to the Commission by Governor Beverly E. Perdue. The appointment, as the Bulletin went to press, is for a three-year term through July 2015. He succeeds former Vice Chairman Alice L. Mosteller of Waynesville.
This article came from the October 2012-Vol43-2 edition of the bulletin.
The North Carolina General Assembly recently enacted important amendments to both the Real Estate License Law and the Appraisers Act regarding the extent to which a broker may perform a broker price opinion (BPO) or comparative market analysis (CMA) for a fee. The Real Estate Commission has adopted temporary rules implementing the License Law changes, effective October 1, 2012.
The Primary Law Changes
A “non-provisional” broker whose license is in good standing and on active status may prepare a broker price opinion (BPO) or comparative market analysis (CMA) and charge and collect a fee for the opinion. The BPO may now be performed for a fee for a variety of persons and entities for a variety of reasons, not just for actual or prospective brokerage clients. Note, however, that a provisional broker (i.e., a broker who has not completed all postlicensing courses and thereby removed his or her “provisional” status) may no longer perform a BPO or CMA for a fee for anyone. (The Appraisers Act previously allowed any real estate licensee to perform a CMA for a fee, but only for an actual or prospective client or for property involved in an employee relocation program.)
A broker who performs a BPO for a fee must provide the BPO in writing, estimating only the “probable selling or leasing price” of a property (not the “value” or “worth” of a property). The BPO must NOT be referred to as a “valuation” or “appraisal.” A broker may NOT prepare a BPO for an existing or potential lienholder (e.g., mortgage lender) where the BPO is to serve as the basis to determine the value of a property for the purpose of originating a mortgage loan, including first and second mortgages, refinances or equity lines of credit.
A “broker price opinion” and a “comparative market analysis” are defined as synonymous terms in both the Real Estate License Law and Appraisers Act.
Standards for Performing a BPO
The Commission’s rules set out the standards for performing BPOs and require that the broker:
• have knowledge of, and access to, market data in the subject property’s local area;
• exercise objective, independent judgment;
• inspect the subject property, unless the client expressly waives an inspection in writing;
• use methodology (analysis of comparable sales and/or income analysis) that is appropriate for the particular assignment;
• select comparable sold or leased properties and make necessary adjustments;
• include information about local market conditions and each method used in deriving the estimate of probable selling or leasing price; and
• explain the basis for any range in probable selling or leasing price when the higher figure exceeds the lower figure by more than ten percent.
Most of the standards addressed in the Commission rules for performing a BPO/CMA are not new! The Commission has for many years applied these standards to any CMA/BPO performed by a licensee, whether or not the CMA/BPO is performed for a fee, and these standards are required to be taught in prelicense and postlicense courses.
BPOs/CMAs Performed for NO FEE
Any broker (non-provisional or provisional) has always been permitted to perform a BPO/CMA for any party when NO FEE is charged, and this continues to be the case under the revised law and rules. Note that the Commission does not consider compensation of a broker for general brokerage services under a brokerage agreement to constitute a “fee” under the BPO law. Such services include the provision by a licensee of a CMA or BPO. Similarly, the possibility of entering into a brokerage agreement (and earning a brokerage fee) does not constitute a “fee” when a licensee performs a CMA/BPO for a prospective client without charging a fee for the CMA/BPO.
It is important for licensees to remember, however, that the Commission expects every CMA/BPO performed by a licensee to be performed in a competent manner and without any undisclosed conflict of interest, even if no fee is received for the CMA/BPO. Thus, as a practical matter, a licensee performing a CMA/BPO for no fee should still look to the standards described in the new Commission rules for guidance regarding the proper performance of a CMA/BPO.
Education on BPOs in Update Course, CE Electives and Real Estate Manual
The BPO law and rule changes are addressed in the current Real Estate Update Course, which licensees are urged to take as soon as possible. The Update coverage does not, however, attempt to address how to properly perform a BPO/CMA. For instruction on the proper performance of BPOs/CMAs, licensees are urged to attend a CE elective course on this topic that has been updated to reflect the recent law/rule changes. Updated coverage of proper performance of BPOs/CMAs will also be included in the next edition (2013-14 edition) of the Commission’s North Carolina Real Estate Manual that will be available in January 2013. The complete law and rule changes may also be found on the Commission’s Web site at www.ncrec.gov.
This article came from the October 2012-Vol43-2 edition of the bulletin.
The Residential Property and Owners’ Association Disclosure Statement has been revised to make it easier for users to complete.
Required for all properties placed on the market on or after January 1, 2013, the revised form replaces the current form’s use of lead-in and subordinate questions with 37 independent questions.
The first 31 questions of the new form, presented in a slightly different sequence, cover the conditions and characteristics of both the property and dwelling to be sold. The content of the questions remains essentially unchanged from the current form with the following exceptions:
• the date the dwelling was constructed, rather than the age of the structure;
• an expanded list of possible materials used to make the exterior walls;
• the date the roof was installed, rather than the age of the roof;
• if the fuel is stored in a tank, whether the tank is above or below ground, and whether it is leased or owned by the seller;
• a shared well included as a possible water supply source;
• whether the owner has knowledge of the number of rooms permitted for a septic system, and if so, the number of permitted rooms;
• problems with “appliances that may be included in the conveyance” rather than “built-in appliances;”
• “structural additions or other structural or mechanical changes” rather than “additions or other structural changes to the dwelling(s) to be conveyed;”
• whether the owner has “been notified by a governmental agency” regarding violations of zoning ordinances, restrictive covenants, or building codes, including the failure to obtain proper permits for changes or improvements.
The last 6 questions pertain to only those properties subject to a HOA, and remain essentially unchanged. As has been the case, the questions offer the options of answering “yes” or “no,” where appropriate, or “no representation.”
For those properties placed on the market prior to January 1, 2013 that require a corrected Disclosure Statement, the new form should be used to make any updates.
The form is available on the Forms page of the Commission’s Web site.
This article came from the October 2012-Vol43-2 edition of the bulletin.
Benjamin Cone III of Raleigh has been re-elected Chairman and Everett “Vic” Knight of Raleigh elected Vice Chairman of the North Carolina Real Estate Commission, it was announced by Miriam J. Baer, Executive Director.
Knight succeeds former Vice Chairman Alice L. Mosteller of Waynesville for the remainder of the 2012-2013 term.
A member of the Commission since 2007, Chairman Cone is Managing Director of Milestone Partners, LLC, in Charlotte. He has held management positions in the textile and commercial furniture industries.
He is a graduate of the University of North Carolina with a Bachelor of Arts in Economics and North Carolina State University with a Bachelor of Science in Textile Management, Magna Cum Laude.
Knight, a licensed broker since 1984, is also a certified appraiser and the owner of Chapel Hill Appraisals and Consultants. He previously was broker/owner of Century 21 Vic Knight Realty in Hillsborough for 10 years.
A native of Burlington, Knight graduated from North Carolina State University with a BS in Civil Engineering and worked internationally for Bechtel Corporation for several years. He was a licensed General Contractor in North Carolina.
Knight is currently a director of the National Association of REALTORS®, a past president and member of the board of directors of the North Carolina Association of REALTORS®, and past president of the Chapel Hill Board of REALTORS® and the Triangle Multiple Listing Service. He is a Continuing Education Instructor for the Real Estate Commission and the North Carolina Appraisal Board, and serves on the Board of Trustees of the Appraisal Foundation.
Knight has two daughters, “Krystle” Gray VanDeventer and “Victoria” Scarlet Knight and is a member of Hillsborough United Church of Christ.
This article came from the October 2012-Vol43-2 edition of the bulletin.