STEPHANIE ANDREW (Reidsville) – By Consent, the Commission reprimanded Ms. Andrew effective September 1, 2012. The Commission found that Ms. Andrew, acting a broker-in-charge of a real estate brokerage firm, allowed the firm to engage in deficit spending in the amount of $14,600 out of liabilities of $35,000. The Commission also found that checks issued by Ms. Andrew failed to consistently identify the purpose of disbursements or reference to property/owner ledgers and that she failed to identify the purpose of disbursements in her journals. The Commission noted that Ms. Andrew and the firm have refunded the accounts and have instituted procedures to bar deficit spending.
CHERRI LYNN BATES (Apex) – By Consent, the Commission revoked the broker license of Ms. Bates effective August 8, 2012. The Commission found that in December 2011, Ms. Bates was charged in Wake County with embezzling rental proceeds from Wilson Property Management, Inc. The Commission also found that Ms. Bates pled guilty to embezzling $26,435.01 in rental proceeds from Wilson Property Management and was sentenced to 60 months’ probation and ordered to pay restitution in the amount of $26,436.01.
JEFFERY A. BAXTER (Kitty Hawk) – By Consent, the Commission suspended the broker license of Mr. Baxter for a period of 12 months effective July 1, 2012. The Commission found that Mr. Baxter pled guilty in Currituck Superior Court to first-degree trespass on July 15, 2010. The Commission noted that Mr. Baxter reported the conviction appropriately to the Commission.
RECCILLE D. BEAMON (Greensboro) – By Consent, the Commission reprimanded Ms. Beamon effective July 1, 2012. The Commission found that Ms. Beamon, acting as rental agent for a residential property, promised to lease the unit to an individual and received $665 as a deposit, but failed to memorialize her agreement with the prospective tenant. The Commission also found that Ms. Beamon did not deposit the money in a trust account, instead remitting it to the owner, and when a dispute arose as to the property’s availability and the prospective tenant demanded a refund of the deposit, Ms. Beamon refused to either return or account for the deposit. The Commission finally found that Ms. Beamon had no written agency agreement with the owner of the property.
JASON BENTON (Knoxville, Tennessee) – By Consent, the Commission suspended the broker license of Mr. Benton for a period of six months effective May 1, 2012. The Commission found that Mr. Benton held a minority interest in a marketing organization which was an unlicensed entity and was an affiliate broker with a licensed real estate brokerage firm. Although Mr. Benton intended to sign a contract as representative of the licensed entity to market and sell real estate in North Carolina, he actually contracted to receive commissions through the unlicensed company. Following a ruling by the Federal District Court, Mr. Benton was barred from collecting any commissions as the contract was void because it was a brokerage contract entred into by an unlicensed entity.
RAMONA G. BRINSON (Arapahoe) – By Consent, the Commission suspended the broker license of Ms. Brinson for a period of thirty-six months effective April 1, 2012. One month of the suspension was active with the remainder stayed for a probationary period beginning on May 1, 2012 and ending on March 31, 2019. The Commission found that Ms. Brinson was convicted of driving while intoxicated, Level 1, driving while license revoked, and two counts of making harassing phone calls. The Commission also found that Ms. Brinson was sentenced to a term of imprisonment of two years, suspended on condition that Ms. Brinson serve 30 days in jail followed by supervised probation for 36 months, and refrain from consuming alcohol and obtain treatment for alcohol abuse. Finally, the Commission found that Ms. Brinson’s driver license was revoked because she had been convicted of three drinking and driving offenses in six years.
JAMES J. BURNS (Raleigh) – By Consent, the Commission reprimanded Mr. Burns effective August 8, 2012. The Commission found that Mr. Burns, acting as qualifying broker and broker-in-charge of a real estate brokerage firm, owned a residential property which was listed with his firm and advertised as having four bedrooms and which he sold; that subsequent to the sale, the home was destroyed by fire; that during reconstruction, the buyer discovered that the local health department had permitted the home for three bedrooms, not four; and that, as a result, the buyer rebuilt the house with only three bedrooms rather than upgrade the septic system.
CAPE FEAR REALTY, LLC (Wilmington) – By Consent, the Commission suspended the firm license of Cape Fear Realty for a period of one year effective September 1, 2012. The Commission then stayed the suspension for a probationary period of two years ending August 31, 2014. The Commission found that between 2005 and 2008 Cape Fear Realty participated in a series of condominium sales transactions; that an unlicensed entity may have been paid for producing investor buyers of the condominium units; and that adequate disclosures may not have been made to the investor buyers concerning the value of the condominium units they were purchasing. The Commission noted that prior to and during the course of these transactions, Cape Fear Realty was represented by counsel and acting on the advice of counsel.
LAWRENCE L. DOMONKOS (Cornelius) – By Consent, the Commission suspended the broker license of Mr. Domonkos for a period of 12 months effective July 1, 2012. The Commission then stayed the suspension for a probationary period of 24 months ending June 30, 2014. The Commission found that Mr. Domonkos drafted a memorandum relating to a lot-purchase contract which provided that if the seller failed to purchase a tract of land adjoining the subdivision where the lot was located, the seller would repurchase the lot from the buyer; that, relying on the memorandum, the buyer purchased the lot; that the seller subsequently did not purchase the other tract; and that when the buyer demanded that the seller buy the lot back, the seller repudiated the memorandum. The Commission also found that Mr. Domonkos, who acted as seller’s agent, was not licensed as an attorney and that the memorandum purporting to secure the parties’ rights which Mr. Domonkos prepared was not a pre-printed contract form. The Commission noted that Mr. Domonkos has offered to refund to the buyer the commission Mr. Domonkos received.
NATHALIE HENRIETTE DUEZ (Wrightsville Beach) – By Consent, the Commission suspended the broker license of Ms. Duez for a period of six months effective May 9, 2012. The Commission found that Ms. Duez was convicted on June 29, 2011 for Impaired Driving, level 2, and placed on probation for 12 months, and on November 21, 2011 was convicted for Resisting a Public Officer and Intoxicated and Disruptive and was placed on unsupervised probation for 12 months and ordered to pay a fine and costs of court. The Commission noted that both convictions were timely reported to the Commission as required by Commission rule. The Commission also found that the Commission had suspended the broker license of Ms. Duez for three months in April 2009 and placed Ms. Duez on probation for 21 months for her conviction for Impaired Driving Level 2 and for failure to respond to Letters of Inquiry.
RICHARD D. EVANS (Fayetteville) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Evans effective August 22, 2012. The Commission dismissed without prejudice allegations that the Mr. Evans violated provisions of the Real Estate License Law and Commission rules. Mr. Evans neither admitted nor denied misconduct.
BRIAN D. FULTON (Jacksonville) – Following a hearing, the Commission revoked the broker license of Mr. Fulton effective August 30, 2012. The Commission found that Mr. Fulton, acting as qualifying broker and broker-in-charge of a licensed real estate brokerage firm and as property manager of a condominium development, failed to respond to multiple Letters of Inquiry from the Commission during 2011and 2012 on two separate matters. The Commission also found that Mr. Fulton failed to account for or remit monies coming into his possession which belonged to others.
HASTY REALTY, INC. (Laurinburg) – By Consent, the Commission reprimanded Hasty Realty effective August 1, 2012. The Commission found that Hasty Realty managed property for a landlord-client and received excess rent payments from a tenant, but failed to credit the tenant with the overpayments and filed an inaccurate 1099 for its landlord-client. The Commission also found that Hasty Realty failed to maintain trust accounts and agency agreements in accordance with Commission rules, failed to perform reconciliations for over three years, and had an $8,000 overage in the sales trust account. The Commission noted that Hasty Realty revised the inaccurate 1099 and repaid the landlord-client for the overpayments the client had to refund to the tenant.
MICHAEL ELMER HORTON (Hendersonville) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Horton effective August 22, 2012. The Commission dismissed without prejudice allegations that Mr. Horton violated provisions of the Real Estate License Law and Commission rules. Mr. Horton neither admitted nor denied misconduct.
RODNEY HYSON, SR. (Bald Head Island) – By Consent, the Commission suspended the broker license of Mr. Hyson for a period of one year effective September 1, 2012. The Commission then stayed the suspension for a probationary period of two years ending August 31, 2014. The Commission found that between 2005 and 2008 Mr. Hyson participated between in a series of condominium sales transactions; that an unlicensed entity may have been paid for producing investor buyers of the condominium units; and that adequate disclosures may not have been made to the investor buyers concerning the value of the condominium units they were purchasing. The Commission noted that prior to and during the course of these transactions, Mr. Hyson was represented by counsel and acting on the advice of counsel.
RODNEY JAMES HYSON, JR. (Bald Head Island) – By Consent, the Commission suspended the broker license of Mr. Hyson for a period of one year effective September 1, 2012. The Commission then stayed the suspension for a probationary period of two years ending August 31, 2014. The Commission found that between 2005 and 2008 Mr. Hyson participated between in a series of condominium sales transactions; that an unlicensed entity may have been paid for producing investor buyers of the condominium units; and that adequate disclosures may not have been made to the investor buyers concerning the value of the condominium units they were purchasing. The Commission noted that prior to and during the course of these transactions, Mr. Hyson was represented by counsel and acting on the advice of counsel.
INNSPIRED MANAGEMENT, INC. (Hendersonville) – The Commission accepted the permanent voluntary surrender of the firm license of Innspired Management effective August 22, 2012. The Commission dismissed without prejudice allegations that Innspired Management violated provisions of the Real Estate License Law and Commission rules. Innspired Management neither admitted nor denied misconduct.
MARLIN MAURICE JACKSON (Raleigh) – By Consent, the Commission suspended the broker license of Mr. Jackson for a period of three months effective May 15, 2012. The Commission found that Mr. Jackson, a property manager for apartments, submitted a Criminal Conviction Disciplinary Action Reporting Form indicating that he had been convicted on January 14, 2011, of Possession of Marijuana stemming from an incident that occurred on November 18, 2010, and was given a suspended sentence of 45 days, placed on probation for 18 months, and ordered to pay a fine and to complete 100 hours of community service.
VAN M. JOHNSON (Charlotte) – By Consent, the Commission suspended the broker license of Mr. Johnson for a period of two years effective August 1, 2012. The Commission then stayed the suspension for a probationary period of three years ending August 1, 2015. The Commission found that Mr. Johnson, while his license was inactive, formed a company which has never been licensed by the Commission as a real estate broker and which operated as a tenant locator service to procure tenants, prepare leases, and collect security deposits for his personal properties and for other property owners. The Commission also found that Mr. Johnson failed to execute written agency agreements with landlord-clients and that the unlicensed firm retained security deposits as its compensation and required its landlord clients to refund tenant security deposits from their own personal funds. The Commission further found that Mr. Johnson failed to hold tenant security deposits in a trust or escrow account and that Mr. Johnson’s and the unlicensed firm’s lease contracts required tenants to pay fees in violation of North Carolina General Statutes. Finally, the Commission found that Mr. Johnson failed to report a 2010 conviction for injury to real property and resisting a public officer.
BRUCE M. MANEY (Sneads Ferry) – The Commission accepted the voluntary surrender of the broker license of Mr. Maney for a period of one year effective August 8, 2012. The Commission dismissed without prejudice allegations that Mr. Maney violated provisions of the Real Estate License Law and Commission rules. Mr. Maney neither admitted nor denied misconduct.
SOPHIA ELIZABETH MATTHEWS (Huntersville) – The Commission accepted the voluntary surrender of the broker license of Ms. Matthews for a period of three years effective August 8, 2012. The Commission dismissed without prejudice allegations that Ms. Matthews violated provisions of the Real Estate License Law and Commission rules. Ms. Matthews neither admitted nor denied misconduct.
JAMES R. MCCOOK, JR. (Laurinburg) – By Consent, the Commission reprimanded Mr. McCook effective August 1, 2012. The Commission found that Mr. McCook, as broker-in-charge of a real estate brokerage firm, managed property for a landlord-client and received excess rent payments from a tenant but failed to credit the tenant with the overpayments and filed an inaccurate 1099 for his landlord-client. The Commission also found that Mr. McCook failed to maintain trust accounts and agency agreements in accordance with Commission rules, failed to perform reconciliations for over three years, and had an $8,000 overage in the sales trust account. The Commission noted that Mr. McCook revised the inaccurate 1099 and repaid the landlord-client for the overpayments the client had to refund to the tenant.
MARK G. PARKER (Raleigh) – By Consent, the Commission suspended the broker license of Mr. Parker for a period of six months effective August 1, 2012. The Commission then stayed the suspension on certain conditions. The Commission found that Mr. Parker, acting as broker-in-charge of a real estate brokerage firm, failed to adequately supervise an associated broker who performed Broker Price Opinions (BPOs) for various lending institutions and their agents, but did not confirm with the BPO clients that there was a reasonable opportunity to list the properties on which the BPOs were performed and did not obtain listing agreements to sell any of the properties examined.
PLATINUM PROPERTIES USA LLC (Leland) – By Consent, the Commission suspended the firm license of Platinum Properties USA for a period of one year effective August 1, 2012. The Commission then stayed the suspension for a period of one year ending August 1, 2013. The Commission found that Platinum Properties, acting as listing agent for a real estate development company and with a qualifying broker who was a member-manager of the development company, listed a subdivision and advertised to buyers that it would have full amenities, private streets maintained by a Homeowners Association, and that septic permits would be available; over five years after the first closings, the amenities have not been completed although the developer continues to attempt to complete the project. The Commission also found that Platinum Properties failed to indicate on a Working With Real Estate Agents brochure that it represented only the seller, failed to use an appropriate contract form for the type of transaction, and failed to issue a subdivision street disclosure statement to buyers.
DAWN CRAIG POTTER (Sneads Ferry) – By Consent, the Commission permanently revoked the broker license of Ms. Potter effective May 9, 2012. The Commission found that Ms. Potter ran a real estate brokerage firm after its broker-in-charge stopped supervising the firm, but did not remove himself as broker-in-charge and never notified the Commission of his retirement. The Commission further found that Ms. Potter stopped keeping trust account records at the end of 2010, but continued to manage properties until October 2011.
DEWEY W. PROPST (Southport) – By Consent, the Commission revoked the broker license of Mr. Propst effective July 12, 2012. The Commission found that Mr. Propst pled guilty to one count of fraudulently burning a dwelling, was sentenced to 6-8 months in prison, which was stayed for a supervised probationary period of 18 months, and ordered to pay $1,049.50 in court costs, fines and legal fees.
R. D. EVANS REALTY, INC. (Fayetteville) – The Commission accepted the permanent voluntary surrender of the firm license of R. D. Evans Realty effective August 22, 2012. The Commission dismissed without prejudice allegations that R. D. Evans Realty violated provisions of the Real Estate License Law and Commission rules. R. D. Evans Realty neither admitted nor denied misconduct.
BRENDA H. SMITH (Graham) – By Consent, the Commission suspended the broker license of Ms. Smith for a period of one year effective June 1, 2012. The Commission then stayed the suspension for a probationary period of two years ending June 1, 2014. The Commission found that Ms. Smith refinanced her home in 2007 and at the insistence of the loan officer and under some duress from him, paid the loan officer a fee outside of closing that was not disclosed on the HUD-1 closing statement. The Commission noted that Ms. Smith has not defaulted on her loan.
SOUTHEASTERN CAROLINA REALTY, INC. (Jacksonville) – After a hearing, the Commission revoked the firm license of Southeastern Carolina Realty effective August 30, 2012. The Commission found that Southeastern Carolina Realty, acting as property manager of a condominium development, failed to respond to multiple Letters of Inquiry from the Commission during 2011 and 2012 on two separate matters. The Commission also found that Southeastern Carolina Realty failed to account for or remit monies coming into its possession which belonged to others.
SUN REALTY OF NAGS HEAD d/b/a THE OUTER BANKS SCHOOL OF REAL ESTATE (Harbinger) – By Consent, the Commission suspended the school license of the Outer Banks School of Real Estate for a period of six months effective October 1, 2013. The Commission then stayed the suspension for a probationary period through and including October 1, 2013. The Commission found that Outer Banks School of Real Estate conducted a prelicensing course in an unapproved facility with knowledge that the facility had not been approved because it did not meet Commission requirements. The Commission also found that Outer Banks School of Real Estate registered students and accepted student fees but failed to obtain enrollment contracts with the students.
ELIZABETH E. WHITCRAFT (Harbinger) – By Consent, the Commission suspended the approval of Ms. Whitcraft to teach prelicensing, postlicensing, Update and Broker-in-Charge Annual Review courses for a period of one year effective September 5, 2012. The Commission found that Ms. Whitcraft, as director of a licensed real estate school, during 2012 conducted a prelicensing class in an unapproved facility which she knew had not been approved because it did not meet Commission requirements. The Commission also found that Ms. Whitcraft registered students and accepted student fees but failed to obtain enrollment contracts with her students. The Commission noted that Ms. Whitcraft is not currently employed with the school.
CHRISTINE R. WILLARD (Reidsville) – By Consent, the Commission suspended the broker license of Ms. Willard for a period of two years effective May 15, 2012. The Commission then stayed the suspension for a probationary period of two years effective May 15, 2012. The Commission found that Ms. Willard served as listing agent for a property with an original listing price of $89,000, had the owner sign a short sale addendum, and advised the seller to stop paying the mortgage, and had the seller sign documentation authorizing a third party negotiator who is not licensed as an attorney or by the Commission and whose firm had been administratively dissolved in 2007 to act on the seller’s behalf with lienholders. The Commission further found that Ms. Willard prepared a comparative market analysis (“CMA”) for the seller as potential client showing a value range of $84,000 to $104,000, but produced a second CMA and subsequent broker priced opinion for the seller’s lienholders showing a value range of $38,000 to $58,000 although other properties in the neighborhood were listed in the range of $90,000 to $109,000. Finally, the Commission found that Ms. Willard falsely represented to the lienholders that the property was owner-occupied.
WILLIFORD & ASSOCIATES, INC. (Garner) – By Consent, the Commission reprimanded Williford & Associates effective June 30, 2012. The Commission found that Williford & Associates served as listing agent for a house owned by its qualifying broker’s building company and failed to disclose to the prospective buyer the existence of moisture-related damage to wooden structural components in the crawlspace. The Commission also found that when the buyer discovered the damage, Williford & Associates refused to refund the due diligence of $500 but offered to reduce the purchase price, and when Williford & Associates subsequently offered to resolve this matter with the buyers by refunding to them the due diligence fee of $500, the buyers rejected the offer.
MARGARET E. WILLIFORD (Garner) – By Consent, the Commission reprimanded Ms. Williford effective June 30, 2012. The Commission found that Ms. Williford, acting as qualifying broker and broker-in-charge of a licensed real estate brokerage firm, contracted to sell a house owned by her building company and listed with her brokerage firm and failed to disclose to the prospective buyer the existence of moisture-related damage to wooden structural components in the crawlspace. The Commission also found that when the buyer discovered the damage, Ms. Williford refused to refund the due diligence fee of $500 but offered to reduce the purchase price; and that Ms. Williford subsequently offered to resolve this matter with the buyers by refunding to them the due diligence fee of $500, but the buyers rejected the offer.
This article came from the October 2012-Vol43-2 edition of the bulletin.
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.