Brokers who buy, sell, or lease properties they own or will own are held to a higher standard than other buyers and property owners. Brokers are required to disclose all material facts to all parties, whether they own the property being sold or are buying a property.
Most sellers of residential properties of one to four units are required to provide the Residential Property and Owners’ Association Disclosure Statement (RPOADS) to all buyers before an offer is made. That includes brokers selling their own properties. Brokers may choose to select “No Representation” on the RPOADS, but this does not relieve them of the obligation to disclose all material facts.
General Statute 93A-6(1) states “The Commission has power to suspend or revoke at any time a license… or to reprimand or censure any licensee, if, following a hearing, the Commission adjudges the licensee to be guilty of: (1) Making any willful or negligent misrepresentation or any willful or negligent omission of material fact.” General Statute 93A-6(b)(3) adds that, “The Commission may suspend or revoke any license … or reprimand or censure any licensee when… (3) The licensee has violated any of the provisions of G.S. 93A‑6(a) when selling, leasing, or buying the licensee’s own property.
In addition to disclosure of material facts, a broker selling their own residential property may not represent the buyer in the transaction, according to Commission Rule 58A .0104(o). This Rule allows a broker selling their own commercial property to represent the buyer, but only if the broker’s ownership interest is less than 25%, and the buyer consents to the representation after full written disclosure of the broker’s ownership interest.
In any transaction where a broker is the buyer, seller, tenant, or landlord, the broker is encouraged to disclose to the other party in the transaction that the broker is a licensed real estate broker. The Commission recommends this disclosure because having a license may give the broker an advantage during negotiations. The disclosure can be made orally or in writing.