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Wilson Leaves Commission

Real Estate Commission member and former Chairman Lanny T. Wilson (Wilmington) has resigned as a member of the Commission.

A member of the State Board of Transportation, Mr. Wilson was also recently appointed by Governor Easley to the newly created North Carolina Turnpike Authority.

The Commission members joined Governor Easley in thanking Mr. Wilson for his leadership and service to North Carolina.

This article came from the February 2003-Vol33-3 edition of the bulletin.

Travel Agent Referral Fees OK Under New Commission Rules

By Pamela V. Millward, Associate Legal Counsel

Before September 1, 2002, the Real Estate License Law and Commission rules forbade real estate licensees from compensating or sharing compensation with unlicensed persons for acts that require licensure by the Commission.  However, in September the Commission created a narrow exception to its rules that allowed brokers to pay referral fees to travel agents for procuring a tenant for a vacation rental as defined in the North Carolina Vacation Rental Act.

Under Commission rules, eligible travel agents must be primarily engaged in the business of acting as an intermediary between persons who purchase air, land, and ocean travel services and those who provide these services.  They must spend the bulk of their time arranging travel for others.  In addition, individuals permitted to sell airline tickets by the Airlines Reporting Corporation (ARC) are also eligible for a referral fee under the rules.

To receive compensation from a real estate broker, a travel agent:

• May only introduce the tenant to the broker and in the regular course of the           travel agent’s business.

• May not discuss lease conditions.

• May not negotiate the price of the rental or on behalf of the tenant.

• May not perform any other acts which normally require a real estate license.

• May not engage in brokerage on the pretext of being a travel agent.

• May not seek, or come into possession of, any other monies in connection with the vacation rental.

• May be paid only at the conclusion of the transaction and only by a duly licensed real estate broker. Salespersons may not pay travel agents for referrals.

As for the mechanics of making a referral, before a vacation rental agreement is created between the vacationer and the property manager, the real estate agent must provide the vacationer with a written statement advising him or her to rely only upon the agreement itself and the real estate broker’s statements when deciding whether to undertake the rental agreement.

Finally, real estate brokers must keep accurate records of all payments made to any travel agent for a minimum of three years. This includes the name of the tenant, the property rented and dates of tenancy, name and address of the travel agent, and the amount of the referral.

Brokers implementating this rule change and needing further information may contact the Commission’s legal division.

This article came from the February 2003-Vol33-3 edition of the bulletin.


June 30, 2003
License renewal deadline
July 1, 2003
License expiration period begins
December 31, 2003
Last day to reinstate expired license with $55 fee only
January 1, 2004 thru June 30, 2006
Period to reinstate by exam, completing prelicensing course or possessing other state’s active real estate license
July 1, 2006
Reinstate as new licensee by prelicense education and exam or as active licensee in another state


This article came from the February 2003-Vol33-3 edition of the bulletin.

Rule Changes To General Assembly

Proposed amendments to the Commission’s rules have been approved by the Rules Review Commission, the legislature’s independent review board and final step before submission to the General Assembly. If the Assembly makes no objection, the rules will go into effect July 1, 2003.  The proposed rule changes include:

A .0107 – Amend to permit a vacation rental manager to maintain accounts payable ledgers containing specifically defined data in lieu of subsidiary ledger sheets.

A .0113 – Amend to clarify that licensees must report disciplinary actions taken against them by any governmental agency as well as criminal convictions, within 60 days.

A .0302 – Amend to prevent an individual who has applied for licensure as a real estate salesperson from applying for licensure as a real estate broker during the pendency of the salesperson license application.

A .0502 – Amend to place upon the principal broker of a firm several new responsibilities, which include the duty to secure and preserve the transaction and trust account records of the firm whenever there is a change of Broker-in-Charge and the duty to notify the Commission if these accounts are out-of-balance or have not been properly reconciled.

E .0203 – Amend to require that video tapes provided by update course instructor applicants be made within the previous year.

Contact the Commission’s rule-making coordinator, Pamela Millward, for further information or for copies of the full text of these proposed rules.

This article came from the February 2003-Vol33-3 edition of the bulletin.

Reapplying For Exam Made Simpler, Faster

Beginning January 1, 2003, the Real Estate Commission and its examination services provider, Psychological Services, Inc. (PSI), implemented new simplified reapplication and examination rescheduling procedures for license applicants who are unsuccessful on their license examinations (or who fail to take the examination within their 90-day examination eligibility period).

These new procedures allow unsuccessful examination candidates to electronically refile their applications the day after failing an examination and to simultaneously schedule an examination retake, typically within 2-4 days.

Prior to January 1, 2003, a license applicant who was unsuccessful on his/her license examination was required to file another complete paper license application and application fee with the Commission and wait to receive a notice of examination eligibility before the applicant could contact PSI to schedule and retake the license examination.

Due to the large volume of paper applications from first-time applicants that the Commission also has to process, it had become common for a repeat applicant who promptly filed another paper application with the Commission to have to wait two weeks or more before receiving a notice authorizing him/her to schedule an examination retake with PSI.

This article came from the February 2003-Vol33-3 edition of the bulletin.


Bart H. Allen has assumed the position of Auditor/Investigator in the Auditing and Investigations Division.  He performs field investigations of licensees and audits real estate companies.  Prior to joining the Commission, Mr. Allen was a Realtor with Allen Tate Co. in Charlotte, N.C.  Mr. Allen has also worked in the accounting department of Belk Store Services and in Commercial Banking with Bank of America.

M. Spier Holloman has assumed the position of Auditor/Investigator in the Auditing and Investigations Division. She will investigate consumer complaints against licensees, audit trust accounts and assist the instructors of the Trust Account
Courses. Prior to joining the Commission, Ms. Holloman worked in real estate sales and rentals. She also served on the Grievance and Professional Standards committees for her local board.

This article came from the February 2003-Vol33-3 edition of the bulletin.


No Listing, No Sign, No Sale, No Service

By Janet R. Thoren
Deputy Legal Counsel


Q:  The owner of a commercial subdivision has asked me to place my “for sale” sign at the entrance. Can I do so, even though I do not have a written listing agreement with him?

A:  No. Advertising another’s property for sale or rent requires not only permission of the owner but also a written agreement outlining the services you will provide.

Q:  I have a written listing agreement but it has expired. Nevertheless, the owner tells me I can leave my sign up and she will pay me a commission if the property is sold through me. Can I continue to offer the property for sale under this arrangement?

A:  No. Although the owner has verbally permitted you to continue to advertise and offer the property for sale, you may not do so without a valid written agreement for brokerage services with the owner.

Q:  I realize that I cannot offer property for sale without a written agency agreement. But can I offer it for rent?

A:  No. Since September 1, 2002, Commission rules now require brokers to have written agreements for brokerage services before they can offer property for rent.

Q:  I received a letter from a property owner that states “I give you and your firm permission to place a sign on my property and advertise it for sale. Although I do not know if I am ready to sell, if you want to work on it for me, go ahead and I’ll look at any offers you bring.” Based upon this letter, can I proceed in offering to sell the property?

A:  No. Although the letter gives you the owner’s permission to conduct brokerage services on his behalf, it does not contain the following elements required by Commission rule: A definite time period for the agency agreement, termination without prior notice at the expiration of the period, and specific non-discrimination language.

Q:  Is there a standard listing agreement that I must use?

A:  Although standard listing forms are available, many brokers are now offering limited services to sellers which are not contemplated by these forms. However, you are reminded that the agreement you use must be in writing and comply with Commission rules. It is also prudent to include in the agreement terms governing the fee you expect for your services and when the fee is earned.

This article came from the February 2003-Vol33-3 edition of the bulletin.

New Q&A Publication on Earnest Money Deposits, Licensing Booklet Divided

Questions and Answers on: Earnest Money Deposits, a new Commission publication, examines issues arising from the payment of earnest money deposits prior to closing a residential real estate sales transaction. The brochure is available for $.25 a copy.

In addition, an existing publication has been divided into two separate booklets.

Real Estate Licensing in North Carolina evolved from the old publication of the same name but with an exclusive focus on the licensing process. It contains the license application form and is free of charge.

North Carolina Real Estate License Law and Commission Rules (also including Trust Account Guidelines and Comments on the Law and Rules) is the remainder of the content that was originally in the licensing publication. This booklet sells for $3.

All Commission publications may be ordered online at the Commission website, www.ncrec.state.nc.us, or by mailing or faxing the appropriate publications order form found on pages 6 and 7 as well as online. The text for all publications is available on the website as well, free of charge.

This article came from the February 2003-Vol33-3 edition of the bulletin.

License Law Amendment Shortens Fee-Only Reinstatement Period

A recent amendment to the Real Estate License Law has shortened the period of time within which, by merely paying a fee, you may reinstate an expired license.  Now, if you fail to renew your license by June 30 of any year, you only have until the following December 31 (i.e., six months) to reinstate it merely by paying the prescribed fee.

The new reinstatement fee is $55 regardless of how long your license has been expired (whether one day, one year, three years, etc.).

If you fail to reinstate your license within this six-month period, the Commission may consider you as never having been licensed and, therefore, subject you to the requirements for original licensure–including the license examination. Accordingly, the Commission has adopted the following guidelines:

If your license has been expired for more than six months but not more than three years, you must either (1) pass the current license examination; or (2) complete the 67-hour Salesperson Prelicense Course within one year before applying to reinstate a salesperson license (or the 60-hour Broker Prelicense Course to reinstate a broker license); or (3) possess an active real estate license in another state (a broker license to reinstate a North Carolina broker license).

If your license has been expired for more than three years, you must satisfy all prelicense education and examination requirements unless you hold a real estate license in another state (a broker license to reinstate a North Carolina broker license).

Most persons who allow their licenses to expire simply forget to renew them on time.  Others think that licenses on inactive status do not require renewal each year. And still others change real estate firms and/or their residence addresses without notifying the Commission.  If you place your license on inactive status, you must renew it each year and pay the renewal fee to preserve the right to activate it later (after making up any continuing education deficit).  Also, be careful to notify the Commission promptly of any business or residence address change so you will receive your renewal notice. Otherwise, you may find yourself having to repeat a prelicense course and/or retake the license examination.

This article came from the February 2003-Vol33-3 edition of the bulletin.

How to Order Publications

Changes to the process of ordering publications and the implementation of new charges for certain Commission publications became effective October 1 as follows:

–To place an order, you are now able to do so on the Commission website, www.ncrec.state.nc.us, with either Visa or MasterCard.

–For mail or fax orders, the Publications Order Form (see pages 6 and 7 and the website) has been divided into two separate forms in the Bulletin. The form for publications with charges includes Working With Real Estate Agents, Questions and Answers on: Home Inspections, Questions and Answers on: Earnest Money Deposits, Residential Square Footage Guidelines and a new booklet containing the NC Real Estate Law, Commission rules and Trust Account Guidelines. Credit card ordering is now permitted when using this form, which is to be mailed to the address shown on it for fulfillment. The other form is for publications that are free of charge and should continue to be sent to the Commission.

The Commission cannot accept telephone orders.

This article came from the February 2003-Vol33-3 edition of the bulletin.