The NCREC 2022 Virtual Educators Conference

The North Carolina Real Estate Commission was excited to welcome real estate instructors and various education providers to its 2022 Spring Educators Conference on Tuesday, March 29, 2022. This year’s event was conducted via Zoom technology, and highlighted the theme, Wizard of Oz.

The registration for this virtual conference was limited to 150 participants. However, the entire day’s presentations were recorded and will be available for viewing in early April. Thus, even those who could not attend the live virtual event will benefit from the information shared.

Wendell Bullard, Commission Chair, opened the conference at 8:30 with a welcome to all the attendees. After the welcome, the day-long event featured the following presentations by Commission staff members.

• News from the Emerald City by Miriam Baer, Executive Director
• Click your Heels Together: The Yellow Brick Roadmap by Corean Hamlin, Director of Education and Licensing
• Glinda the Good One: Course Administration by Pamela Rorie, Continuing Education Officer
• Don’t be a Cowardly Lion: Course Content and Materials for CE Update by Kizzy Crawford Heath, Legal Education Officer
• Help from the Munchkins: Course Content and Materials for Post & Pre, by Deborah Carpenter, Education & Examination Officer and Beth McGonigle, Education Content Officer
• Don’t be a Flying Monkey: Learning Objectives by Corean Hamlin, Director of Education and Licensing
• If I Only Had a Brain: Communicating Correct Grammar and Vocabulary, Avoiding Criticism, and Identifying Key Concepts & Correcting Student Misconceptions by Deborah Carpenter, Education & Examination Officer, Len Elder, Education Development Officer, and Pamela Rorie, Continuing Education Officer
• You Don’t Need Ruby Slippers: Classroom Management by Corean Hamlin, Director of Education & Licensing, Kizzy Crawford Heath, Legal Education Officer, and Beth McGonigle, Education Content Officer
• Avoid the Poppy Fields: Instructional Techniques, Instructional Aids & Assessment by Len Elder, Education & Development Officer

The conference culminated with the presentation of the 2022 Larry A. Outlaw Excellence in Education Award to Dana Rhodes by Commission Chair Bullard. The Commission established the Larry A. Outlaw Excellence in Education Award in 2016 to honor the Commission’s late former Director of the Education and Licensing Division.  As this year’s recipient of the Larry Outlaw award, Mr. Rhodes demonstrated ongoing excellence in outstanding contributions to real estate education in North Carolina.

The conference concluded with a final wrap-up/Q&A session moderated by Ms. Hamlin. The Commission thanks North Carolina’s real estate education community for its continued interest and support, and congratulates Mr. Rhodes on his award.

Employment Opportunities Available

Are you interested in joining the staff of the North Carolina Real Estate Commission? From time to time, employment opportunities become available. They are posted on the Commission’s website under the “About Us” tab.

We currently have opportunities available for the following positions:

Diversity, Equity and Inclusion Officer – Application deadline March 31, 2022.

Auditor – Application deadline April 4, 2022.

Consumer Protection Officer – Application deadline April 8, 2022.

Click here for more information.

NCREC Residential Square Footage Guidelines vs. ANSI Standard

When a real estate broker wishes to include the heated living area (“HLA”) (aka heated square footage) in any form of advertising, the broker must first verify the accuracy of the HLA by measuring and calculating the HLA or by hiring a qualified professional (preferably an experienced broker or licensed appraiser) to do so. Brokers are not permitted to rely upon the following sources for HLA: a seller’s representation, an appraisal prepared prior to the listing, a previous MLS listing, tax records, or a set of blue prints if the construction of the house has been completed. If a broker is unable or unwilling to verify the accuracy of the HLA, then the broker should refrain from including an HLA figure in any form of advertising as doing so may constitute false advertising and/or a misrepresentation of material fact.

The Commission does not specifically dictate which method a broker must use to determine the HLA. A broker may use the Commission’s Residential Square Footage Guidelines (“RSFG”) (aka “the yellow book”) or the American National Standards Institute (“ANSI”) standard or any other recognized professional standard.

What is the difference between the Commission’s Residential Square Footage Guidelines and the ANSI standard? The chart that follows this article shows a general comparison of some, but not all, of the components of the two. The chart is for comparison purposes only and is not a how-to guide for determining square footage. Any person wishing to use one of the two methods referenced in the chart should carefully review and follow all of the steps prescribed by the method chosen. The text for the Commission’s Guidelines is available on ncrec.gov under “Publications,” then “Guides.” The ANSI standard must be obtained from its publisher (American National Standards Institute).

There are two primary differences between the Commission’s Guidelines and the ANSI standard. First, the end users of the square footage data produced using the Commission’s Guidelines are residential buyers and sellers who want to know the total amount of HLA in the homes they want to buy or sell, respectively. The end users of the data produced by the ANSI standard are lenders, Fannie Mae, Freddie Mac, USDA, and the Veterans Administration who want to determine the value of the homes as collateral for the loans being requested by prospective buyers.

The second primary difference between the two methods is that the Commission’s Guidelines allow for the combination of all HLA in a home. The ANSI standard requires users to separately identify the Gross Living Area (“GLA”) as either “above-grade” or “below-grade.” When any exterior wall has soil against it, the ANSI standard requires its users to designate that entire floor as “below-grade.

Is there any reason for a broker to be familiar with both the Commission’s Square Footage Guidelines and the ANSI standard? Yes! Here are three common scenarios illustrating the need for a broker to be familiar with both methods.

1. A broker who is also licensed as an appraiser should know how to use both methods and when to use each one. Effective April 1, appraisers are required to use the ANSI standard for loans sold to Fannie Mae.
2. A listing agent who hires a professional to determine the HLA of a new listing should know and understand the method that will be used to determine the HLA. Additionally, the listing agent should review the completed work to verify that the HLA calculation includes only areas that qualify as HLA or GLA according to the method used.
3. A broker who encounters different representations of the square footage of a property should understand the differences that can result depending upon the method used. For example, suppose that a buyer agent represents a buyer whose lender orders an appraisal that indicates 2,400 square feet of GLA “above-grade.” The listing agent for this property advertised 3,000 square feet of HLA in the MLS. The buyer gets upset, believing that the listing agent overstated the HLA. The buyer agent should be familiar enough with the ANSI standard to check the appraisal report to see if it contains an additional 600 square feet of GLA designated as “below-grade” to account for the 600 square foot difference. If the appraisal indicates 600 square feet of GLA “below-grade,” then the calculations of both the listing agent and the appraiser are likely correct. If the appraisal report does not show 600 square feet of GLA “below-grade,” then all interested persons need to determine the correct HLA or GLA and proceed accordingly.

Remember, HLA is a material fact, because it is an important factor used by sellers, buyers and others in making decisions. It is therefore imperative that brokers exercise skill, care and diligence in providing accurate HLA information so that consumers can make informed decisions. Knowing and properly using the methods referenced in this article will help protect brokers and their clients and customers.

Staff Appearances

Miriam Baer, Executive Director of NC Real Estate Commission, spoke at the DeRonja Real Estate sales meeting on March 3.

Nick Smith, Consumer Protection Officer, spoke at the Mark Spain Real Estate meeting on March 15.

Sheryl Graham, Consumer Protection Officer, spoke at the HomeTowne Realty brokers office meeting on March 29.

Disciplinary Actions

BRUCE M ALEXANDER (ASHEVILLE) – By Consent, the Commission suspended the broker license of Mr. Alexander for a period of 1 year, effective March 15, 2022. The Commission then stayed the suspension effective March 15, 2022. The Commission found that Mr. Alexander acting as qualifying broker/broker-in-charge of a firm and also licensed by the NC Licensing Board for General Contractors, failed to report that, by Consent Order dated October 21, 2020, Mr. Alexander was disciplined by the NC Licensing Board for General Contractors. Pursuant to the Consent Order with the Contractors’ Board, Mr. Alexander was suspended for one year with three months active, ordered to pay a $5000 fine, and ordered to complete two courses.

JACQUELINE N BARKEY (RALEIGH) – By Consent, the Commission reprimanded Ms. Barkey, effective March 15, 2022. The Commission found that as on-site agent /sales manager for a firm, Ms. Barkey was involved in selling lots and new construction homes in a subdivision that its affiliate had developed. The lots were located on a street which appeared to be a cul-de-sac and Ms. Barkey’s MLS listing directed potential buyers to turn “into the cul-de-sac” to get to the listed lots. Ms. Barkey represented to certain buyers that the lot they were interested in was in a cul-de-sac and would have a buffer of trees between the subdivision and a commercial development. In fact, the adjacent parcel had a right-of-way to connect a private drive to the cul-de-sac although both representations that the owner of the adjoining property had made in its re-zoning application and express conditions placed on the re-zoning when it was approved indicated a buffer would be maintained. In contracting to purchase, the buyer signed documents that agreed that they were “aware that some home sites are located near undeveloped property that is adjacent to the Community that could be developed in the future.”

MICHAEL JAMES BLACKBURN (CHARLOTTE) – By Consent, the Commission suspended the broker license of Mr. Blackburn for a period of 1 year, effective March 10, 2022. The Commission then stayed the suspension effective March 10, 2022. The Commission found that Mr. Blackburn acted as the broker-in-charge in three separate residential transactions. In one transaction, Mr. Blackburn’s broker failed to ensure that her seller client addressed all material issues noted on a previous buyer’s home inspection report prior to re-listing the property and/or failed to disclose any outstanding material items which were not corrected. Mr. Blackburn’s broker also initially advertised the subject property as having an outdoor pool along with hardwood and tile floors, when it did not. In the second transaction, Mr. Blackburn’s broker failed to pull the septic permit prior to listing the property as a 5-bedroom home. The septic permit only allowed for 3-bedroom occupancy. In the third transaction, Mr. Blackburn’s vendor buried parts of the outdoor pool beneath the back yard instead of removing it all from the property. The seller has now excavated and removed all of the items from beneath the yard after taking the home off the market. The listing agreement with Mr. Blackburn’s broker failed to include her license number and failed to comply with Commission rules by not placing the fair housing language in a clear and conspicuous manner.

PHILLIP B BOLLINGER (LENOIR) – By Consent, the Commission reprimanded Mr. Bollinger, effective March 10, 2022. The Commission found that a provisional broker (PB) under Mr. Bollinger’s supervision acted as the buyer agent in a residential purchase transaction. After the buyer-client went under contract, the PB recommended that the client use a licensed inspector or PB’s father, who was not a licensed inspector, to perform the home inspection for the subject property. The buyer-client chose to use PB’s father, which was the less expensive option. PB and the buyer-client were present during the inspection. PB’s father did not produce a report of any findings; however, PB instead took notes of any issues. Around ten (10) months after closing, the buyer-client had a home inspection performed by a licensed inspector. That inspection discovered issues not identified by PB’s father such as evidence of water intrusion to the home’s foundation, a water leak in the master bathtub, improper ventilation of the wood stove, and issues with the electrical panel. The Commission notes that Mr. Bollinger does have a firm policy for agents to recommend only licensed professionals to clients.

CLAY-TIN LLC (LENOIR) – By Consent, the Commission reprimanded Clay-Tin LLC, effective March 10, 2022. The Commission found that a provisional broker (PB) the firm acted as the buyer agent in a residential purchase transaction. After the buyer-client went under contract, PB recommended that the client use a licensed inspector or PB’s father, who was not a licensed inspector, to perform the home inspection for the subject property. The buyer-client chose to use PB’s father, which was the less expensive option. PB and the buyer-client were present during the inspection. PB’s father did not produce a report of any findings; however, PB instead took notes of any issues. Around ten (10) months after closing, the buyer-client had a home inspection performed by a licensed inspector. That inspection discovered issues not identified by PB’s father such as evidence of water intrusion to the home’s foundation, a water leak in the master bathtub, improper ventilation of the wood stove, and issues with the electrical panel. The Commission notes that Clay-Tin LLC does have a firm policy for agents to recommend only licensed professionals to clients.

MICHAEL PERRY GUPTON (LITTLETON) – By Consent, the Commission suspended the broker license of Mr. Gupton for a period of 60 days, effective March 1, 2022. The Commission then stayed the suspension in its entirety. The Commission found that in 2021, Mr. Gupton did not exercise reasonable care in negotiating contracts in which he was a Dual Agent.

VERRIA HAIRSTON (CHARLOTTE) – By Consent, the Commission suspended the broker license of Ms. Hairston for a period of 1 year, effective March 10, 2022. The Commission then stayed the suspension effective March 10, 2022. The Commission found that Ms. Hairston acted as the listing agent in three separate residential transactions. In one transaction, Ms. Hairston failed to ensure that her seller client addressed all material issues noted on a previous buyer’s home inspection report prior to re-listing the property and/or failed to disclose any outstanding material items which were not corrected. Ms. Hairston also initially advertised the subject property as having an outdoor pool along with hardwood and tile floors, when it did not. In the second transaction, Ms. Hairston failed to pull the septic permit prior to listing the property as a 5-bedroom home.  The septic permit only allowed for 3-bedroom occupancy. In the third transaction, Ms. Hairston’s vendor buried parts of the outdoor pool beneath the back yard instead of removing it all from the property. The seller has now excavated and removed all of the items from beneath the yard after taking the home off the market. Ms. Hairston’s listing agreement failed to include her broker license number and failed to comply with Commission rules by not placing the fair housing language in a clear and conspicuous manner.

DOUGLAS RICHARD HINDMAN (RALEIGH) – By Consent, the Commission reprimanded Mr. Hindman, effective March 15, 2022. The Commission found that as on-site agent /sales manager for a firm, Mr. Hindman was involved in selling lots and new construction homes in a subdivision that its affiliate had developed. The lots were located on a street which appeared to be a cul-de-sac and Mr. Hindman’s MLS listing directed potential buyers to turn “into the cul-de-sac” to get to the listed lots.. In fact, the adjacent parcel had a right-of-way to connect a private drive to the cul-de-sac although both representations that the owner of the adjoining property had made in its re-zoning application and express conditions placed on the re-zoning when it was approved, indicated a buffer would be maintained. In contracting to purchase, the buyer signed documents that agreed that they were “aware that some home sites are located near undeveloped property that is adjacent to the Community that could be developed in the future.”

SONMI MOORE LEWIS (GREENBORO) – By Consent, the Commission suspended the broker license of Ms. Lewis for a period of 1 year, effective February 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found that as qualifying broker/broker-in-charge of a firm, a review of Ms. Lewis’ trust account records showed that Ms. Lewis failed to retain check backs, failed to identify the purpose of remittance on checks and failed to reconcile timely leading to an inability to create an accurate audit trail. Ms. Lewis identified an overage of approximately $4000 in approximately $140,000 in held trust monies.

JOHN JUNIOUS LEWIS III (GREENBORO) – By Consent, the Commission suspended the broker license of Mr. Lewis for a period of 1 year, effective February 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found that as bookkeeper and affiliated broker of a firm, a review of Mr. Lewis’ trust account records showed that Mr. Lewis failed to retain check backs, failed to identify the purpose of remittance on checks and failed to reconcile timely leading to an inability to create an accurate audit trail. Mr. Lewis identified an overage of approximately $4000 in approximately $140,000 in held trust monies.

ALBIN DENNIS NOVINEC (JACKSONVILLE) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Novinec effective March 16, 2022. The Commission dismissed without prejudice allegations that Mr. Novinec violated provisions of the Real Estate License Law and Commission rules. Mr. Novinec neither admitted nor denied misconduct.

STEVEN CHINEDU ONYEBERECHI (GREENSBORO) – By Consent, the Commission suspended the broker license of Mr. Onyeberechi for a period of 2 years, effective January 31, 2022. The Commission then stayed the suspension effective January 31, 2022. The Commission found that Mr. Onyeberechi managed a residential property for lease and also executed an Option to Purchase agreement with the tenants and received a $6,965 option fee, unbeknownst to the property owner. Mr. Onyeberechi failed to account for the option fee and failed to maintain entrusted funds in accordance with Commission rules. In another transaction, Mr. Onyeberechi entered into a Buyer Holding Fee Agreement, which did not comply with Commission rules and collected a $6,000 fee. Mr. Onyeberechi failed to account for the fee and failed to maintain entrusted funds in accordance with Commission rules. Mr. Onyeberechi made promises to the buyer regarding returning the fee and failed to fulfill those promises. Mr. Onyeberechi also formed a company to assist individuals repair/restore their credit rating and collected money up front.  On multiple occasions, Mr. Onyeberechi has failed to fulfill promises made to those persons regarding improving their credit rating and obtaining homeownership. The Commission notes that Mr. Onyeberechi has agreed to cease his credit repair/restoration operations and has made reimbursements.

OPENDOOR BROKERAGE LLC (CHARLOTTE) – By Consent, the Commission suspended the firm license of Opendoor Brokerage LLC for a period of 18 months, effective March 10, 2022. The Commission then stayed the suspension effective March 10, 2022. The Commission found that Opendoor Brokerage LLC acted as the listing firm in three separate residential transactions. In one transaction, Opendoor Brokerage LLC’s broker failed to ensure that the seller client addressed all material issues noted on a previous buyer’s home inspection report prior to re-listing the property and/or failed to disclose any outstanding material items which were not corrected. Opendoor Brokerage LLC’s broker also initially advertised the subject property as having an outdoor pool along with hardwood and tile floors, when it did not. In the second transaction, Opendoor Brokerage LLC’s broker failed to pull the septic permit prior to listing the property as a 5-bedroom home. The septic permit only allowed for 3-bedroom occupancy. In the third transaction, Opendoor Brokerage LLC’s vendor buried parts of the outdoor pool beneath the back yard instead of removing it all from the property. The seller has now excavated and removed all of the items from beneath the yard after taking the home off the market. The listing agreement with Opendoor Brokerage LLC’s broker failed to include her license number and failed to comply with Commission rules by not placing the fair housing language in a clear and conspicuous manner.

EDWARD BARBER PEASE (RALEIGH) – By Consent, the Commission reprimanded Mr. Pease, effective March 15, 2022. The Commission found that as Vice President of a firm, Mr. Pease was involved in selling lots and new construction homes in a subdivision that its affiliate had developed. The lots were located on a street which appeared to be a cul-de-sac and the MLS listing directed potential buyers to turn “into the cul-de-sac” to get to the listed lots. In fact, the adjacent parcel had a right-of-way to connect a private drive to the cul-de-sac although both representations that the owner of the adjoining property had made in its re-zoning application and express conditions placed on the re-zoning when it was approved, indicated a buffer would be maintained.

ROSHONDA CHENISE PEELE (LILLINGTON) – By Consent, the Commission reprimanded Ms. Peele, effective March 16, 2022. The Commission found that on August 18, 2021, Ms. Peele was convicted of misdemeanor shoplifting/concealment of goods. She was assessed a fine and performed community service. Respondent stated that she proceeded through a retail self-checkout without paying for all of the items in her cart.

RENEE ROTTHOFF (RALEIGH) – By Consent, the Commission reprimanded Ms. Rotthoff, effective March 15, 2022. The Commission found that as on-site agent /sales manager for the sale of lots in a subdivision developed and marketed by firm, Ms. Rotthoff was involved in selling lots and new construction homes in a subdivision that its affiliate had developed. The lots were located on a street which appeared to be a cul-de-sac and Ms. Rotthoff’s MLS listing directed potential buyers to turn “into the cul-de-sac” to get to the listed lots. In fact, the adjacent parcel had a right-of-way to connect a private drive to the cul-de-sac. Ms. Rotthoff represented to certain buyers that the lot they were buying would have a buffer of trees between the subdivision and the commercial development In fact, the adjacent parcel had a right-of-way to connect a private drive to the cul-de-sac although both representations that the owner of the adjoining property had made in its re-zoning application and express conditions placed on the re-zoning when it was approved, indicated a buffer would be maintained. In contracting to purchase, the buyer signed documents that agreed that they were “aware that some home sites are located near undeveloped property that is adjacent to the Community that could be developed in the future.”

LUCINDA DIANA BAILEY CARTER SANTANGELO (CHARLOTTE) – Following a hearing, the Commission permanently revoked the license of Ms. Santangelo, effective February 8, 2022. The Commission found that Ms. Santangelo advertised her services as a property manager, actively managed properties for others, and collected entrusted funds without ever being designated broker-in-charge of her sole proprietorship. Furthermore, Ms. Santangelo deposited rent payments that she collected into her personal bank account, which was not designated “trust” or “escrow”, and which caused these funds to be comingled with her personal funds. Funds from the account were then used to make purchases for food, shopping, gas, and to make payments on her credit card.  Ms. Santangelo failed to create, maintain, or retain trust account records in accordance with Commission rules. Ms. Santangelo failed to provide all records or documents to the Commission’s investigator upon request. Ms. Santangelo was previously sanctioned in 2011 for similar issues and received a three (3) year suspension at that time.

SEMPER FI REALTY (JACKSONVILLE) – The Commission accepted the permanent voluntary surrender of the broker license of Semper Fi Realty effective March 16, 2022. The Commission dismissed without prejudice allegations that Semper Fi Realty violated provisions of the Real Estate License Law and Commission rules. Semper Fi Realty neither admitted nor denied misconduct.

SJL PROPERTIES OF THE TRIAD LLC (GREENBORO) – By Consent, the Commission suspended the broker license of SJL Properties of the Triad LLC for a period of 1 year, effective February 15, 2022. The Commission then stayed the suspension in its entirety. The Commission found in review of SJL Properties of the Triad LLCs’ trust account records showed that SJL Properties of the Triad LLC failed to retain check backs, failed to identify the purpose of remittance on checks and failed to reconcile timely leading to an inability to create an accurate audit trail. SJL Properties of the Triad LLC identified an overage of approximately $4000 in approximately $140,000 in held trust monies. 

PERRY VERILLE (RALEIGH) – By Consent, the Commission suspended the broker license of Mr. Verille for a period of 2 years, effective March 15, 2022. The Commission then stayed the suspension effective March 15, 2022. The Commission found that as broker-in-charge, Mr. Verille was responsible for the conduct of advertising and supervision of affiliated brokers in relation to adherence to disclosure requirements. Mr. Verille’s firm sold lots and new construction homes in a subdivision that its affiliate had developed. The lots were located on a street which appeared to be a cul-de-sac and the firm’s MLS listing directed potential buyers to turn “into the cul-de-sac” to get to the listed lots. In fact, the adjacent parcel had a right-of-way to connect a private drive to the cul-de-sac although both representations that the owner of the adjoining property had made in its re-zoning application and express conditions placed on the re-zoning when it was approved indicated a buffer would be maintained. In contracting to purchase, the buyers signed documents that agreed that they were “aware that some home sites are located near undeveloped property that is adjacent to the Community that could be developed in the future.”

ALISHA SMITH WALKER (HUDSON) – By Consent, the Commission suspended the broker license of Ms. Walker for a period of 6 months, effective March 10, 2022. The Commission then stayed the suspension effective March 10, 2022. The Commission found that Ms. Walker acted as the buyer agent in a residential purchase transaction. After her buyer-client went under contract, Ms. Walker recommended that her client use a licensed inspector to perform a home inspection, but also gave her client the option to use an unlicensed person to do a “home consultation” on the subject property since it was less expensive.  The buyer-client chose to have  the less expensive home consultation. Ms. Walker and her buyer-client were present during the  home consultation. The unlicensed person did not produce a report of any findings; rather, Ms. Walker  took notes of  issues that the unlicensed person discovered. Around ten (10) months after closing, the buyer-client had a home inspection performed by a licensed inspector. That inspection discovered issues such as evidence of water intrusion to the home’s foundation, a water leak in the master bathtub, improper ventilation of the wood stove, and issues with the electrical panel. Ms. Walker disputes that the issues found in the inspection were present the day of closing. Ms. Walker has only recommended licensed professionals to perform home inspections for her clients since this incident.

CHRISTOPHER RYAN WALLACE (CHARLOTTE) – By Consent, the Commission reprimanded Mr. Wallace, effective March 10, 2022. The Commission found that Mr. Wallace was a broker for the listing firm in a residential transaction. The previous buyer terminated after discovering issues during their home, well, and septic inspections and emailed these reports to the Listing Agent. The house was then taken off the market while repairs were made to the septic system. When the subject property was re-listed, Mr. Wallace handled the transaction in place of the Listing Agent and failed to disclose material issues noted in the previous buyer’s home inspection report, which were not repaired by the property owner. Mr. Wallace was aware that a previous buyer had terminated the contract and that the property had been re-listed. A number of the same material issues were noted during the final buyer’s home inspection as were noted in the previous buyer’s inspection. The final buyer and seller agreed that the seller would pay money in lieu of repairs and the final buyer closed on the subject property.

Current Stats: Monthly Licensee Count as of March 1, 2022