Responding to recommendations from its 2004 Vacation Rental Advisory Committee, the Real Estate Commission has agreed to support efforts to amend the North Carolina Vacation Rental Act.
One change would simplify the reporting requirements for vacation rental managers and property owners when selling property subject to a vacation rental agreement. Another would subject property owners to the same requirements for refunding rent regardless of whether the tenant is forced to leave the property due to a mandatory evacuation order or is unable to occupy it due to a mandatory evacuation order.
Also upon the recommendation of the advisory committee, the Commission will publish a brochure to better inform owners of vacation rental properties regarding security deposits, vacation interruption insurance, rent refunds and related matters. The full report of the advisory committee is available on the Commission’s website, www.ncrec.state.nc.us.
Serving on the advisory committee were Timothy M. Cafferty (Corolla), Linda A. Hess (Kill Devil Hills), Kim J. Johnson (Blowing Rock), Timothy W. Midgett (Hatteras), S.R. “Buddy” Rudd, Jr. (Oak Island), J. Alan Holden (Holden Beach), Assistant Attorney General Barbara Shaw, NCAR Director of Regulatory Affairs Rick Zechini, Bill Rowe from the N.C. Justice and Community Development Center, and Real Estate Commission members Skip Alston and WandaProffitt. Commission Executive Director Phillip T. Fisher facilitated the discussion.
The Real Estate Commission thanked the advisory committee members for their valuable service in addressing these and other important issues affecting vacation rental consumers, property owners and rental managers.
This article came from the November 2004-Vol35-2 edition of the bulletin.
The North Carolina Real Estate Commission was honored to receive the 2004 “Specialty Communications” award from the Association of Real Estate License Law Officials (ARELLO). The award recognized the North Carolina Real Estate Agent Safety Guide, a cooperative venture of the Real Estate Commission and the North Carolina Association of REALTORS®’ Real Estate Safety Council. The award was presented to the Commission at ARELLO’s annual conference inPittsburgh.
Based upon a similar publication of the Washington Real Estate Safety Council, the guide contains common sense safety tips for real estate agents. Since publication in March, more than 20,000 copies have been purchased from the Commission. Every licensee who takes the 2004-2005 continuing education Update Course will receive a copy together with instruction on how to apply the helpful information in their day-to-day real estate practices.
For information on how to purchase the Safety Guide, see the order form on page 7 of this Bulletin, or the Commission’s website, www.ncrec.state.nc.us.
This article came from the November 2004-Vol35-2 edition of the bulletin.
Matthew J. “Rick” Watts of Fayetteville has been elected chairman and Marsha H. Jordan of Lincolnton, vice chair, of the North Carolina Real Estate Commission for the 2004-2005 term beginning August 1; it was announced by Phillip T. Fisher, Executive Director.
Watts is Broker Associate and Senior Sales Executive with Coldwell Banker United Realty in Fayetteville. In 12 years with Coldwell Banker, he has been a member of the President’s Elite for five years and the President’s Circle for seven years.
Watts entered the real estate business in 1992 after retiring from a 30-year career with the U. S. Army where he achieved the rank of Command Retention Sergeant Major for the XVIII Airborne Corps.
Among numerous military honors, Watts holds the U. S. Army’s Legion of Merit, the highest peacetime award for military achievement and honorable service. He was also featured in the recent book, “100 Sergeants Major of Color”, and was selected as the Fayetteville and Cumberland County Ministerial Council’s “Citizen of the Year” for 2004.
He is a member of the Veterans of Foreign Wars, American Legion, the Airborne and Special Operations Museum Foundation Board and past member of the Executive Committee of the National Association for the Advancement of Colored People, among other organizations.
Watts and his wife, Margaret, a retired teacher with 31 years of service, live in Fayetteville. Their daughter, Tiffany, recently received her doctoral degree from the University of North Carolina at Chapel Hill.
A graduate of the University of Virginia, Jordan entered the real estate business in 1986. She is owner of Apple Realty in Lincolnton, a Graduate of the REALTORS® Institute and a Certified Residential Specialist.
Jordan is a director of the North Carolina Real Estate Education Foundation and a former president of the Lincolnton Board of REALTORS® and Dean of the REALTORS® Institute. Active in community affairs, she has served on the board of directors of the Lincolnton Chamber of Commerce and as president for Downtown Development, and is a member of the Lincolnton Rotary Club.
This article came from the November 2004-Vol35-2 edition of the bulletin.
By Gary R. Caddell
Senior Auditor/Investigator, Training Officer
Have you ever asked yourself questions like those in this article? Do you know the answers? If not, there’s a place where you can get the answers and much more. Plus, you will earn continuing education credit. All you need to do is register for the Real Estate Commission’s “Basic Trust Account Procedures” and “Trust Account Procedures for Resort Property Managers” courses.
The schedule for the Spring 2005 Trust Account Caravan offers twelve “Basic Trust Account Procedures” courses and four “Trust Account Procedures for Resort Property Managers” courses at the following locations: Asheville, Fayetteville, Greensboro,Greenville, Huntersville, Kill Devil Hills, Murphy and Wilmington. You can register on line (it’s faster), or use the registration form in this issue of the Bulletin (See page 10). Each course counts as four hours of elective continuing education credit.
The “Basic Trust Account Procedures” course emphasizes instruction on the preparation and maintenance of trust account records and the reconciliation process. It covers the Commission’s rules on handling and accounting of trust funds in detail, and also covers related topics, such as the Tenant Security Deposit Act. This class is a must for brokers-in-charge and bookkeepers. (Unlicensed bookkeepers are welcome.)
The “Trust Account Procedures for Resort Property Managers” class is designed to assist resort property managers with the complicated process of maintaining trust account records on vacation rentals. This course will also cover recent recommendations from the Real Estate Commission concerning changes to the Vacation Rental Act. Since this course focuses on issues specific to resort property management, the Commission recommends that you attend the Basic course prior to attending the Resort course. The Resort course is only offered during the Spring Caravan, so don’t miss it!
The Spring 2004 Trust Account Caravan was very successful, with a total of 531 attendees. Since demand is expected to remain high, we encourage you to register early to ensure your spot at the Spring 2005 Trust Account Caravan.
Commission Initiates Rulemaking Process
The Real Estate Commission at its October meeting agreed to commence the rulemaking process.
The Commission will consider changes in rules relating to agency agreements and disclosures, proof of licensure, advertising, handling and accounting of funds, offers and sales contracts, business entities and continuing education.
A public hearing will be scheduled, most likely in January, once specific text for these rules has been developed. Licensees should visit the Commission’s website, www.ncrec.state.nc.us, for further information.
This article came from the November 2004-Vol35-2 edition of the bulletin.
The statistics here reflect the activities of the Real Estate Commission during the period from May 1, 2003 to April 30, 2004.
Contact
• 232,500 telephone calls (a 16% increase)
• 2,100,000+ website “hits” (an 840% increase)
Publications
• 805,000 publications distributed to licensees, consumers and applicants
Technology
Made more effective use of technology by:
• Completing migration of 89,000 licensee records to a new and faster Windows-based database system
• Increasing online license renewals to 31%
Licensing
• 167,000 license record changes
• 11,409 applications processed for licenses by examination (a 23% increase)
• 10,430 license examinations administered (a 23% increase)
• 5,281 licenses by examination issued (a 23% increase)
• 3,294 broker licenses issued without examination (a 20% increase)
• 374 licenses issued by reciprocity
• 1,001 firm licenses issued (a 41% increase)
• 278 expired, surrendered and suspended licenses reinstated (a 70% increase)
• 306 license applications regarding character issues reviewed
• 123 license applicant conferences conducted (a 50% increase)
• 6 new and 51 renewed private real estate school licenses
Education
• 42 approvals (a 163% increase) and 22 renewed approvals issued to instructors
• 64 new continuing education elective courses approved (for a total of 305 courses)
• 13 new continuing education sponsors approved (for a total of 179)
• 8 new continuing education Update Course instructors approved (for a total of 109)
• 48 Broker-in-Charge Course sessions conducted for 2,719 licensees
• 2,700 student rosters electronically processed for CE courses
Audits/Investigations
• 109 field investigations completed
• 228 trust accounts examined (a 34% increase)
• 481 persons interviewed
• 26 trust account sessions conducted for 794 students
• 39 “spot inspections” performed on 70 different trust accounts
Legal
• 1,117 case (complaint) files opened (+234 over last year) and 1,098 closed (+193 over last year)
• 19 licensees reprimanded
• 54 licenses suspended
• 26 licenses revoked
• 14 licenses surrendered
• 53 cases utilized conditional remedies
• 14 Recovery Fund hearings conducted
• 26 license application hearings held
This article came from the November 2004-Vol35-2 edition of the bulletin.
Dear Licensee:
The Real Estate Commission’s staff writes to licensees for many reasons, including to inquire about a complaint that has been filed against you or against another agent concerning a matter in which you were involved.
When you receive a Letter of Inquiry from the Commission, you should read and respond to it promptly, no later than 14 days from receipt. If you cannot do so, you may request an extension of time (in advance). You are not required to hire an attorney to respond on your behalf, although you are welcome to hire one if you choose.
To avoid delays, it is important that the Commission has your current residence and business addresses at all times. You must notify this office no later than ten (10) days following any change.
You are required to provide copies of all documentation requested in a Letter of Inquiry. Typically, these might include records of transactions and trust accounts, advertisements, brochures, maps, course completion certificates or even a copy of your complete file pertaining to a transaction.
Most licensees who receive Letters of Inquiry take the letters seriously and respond in a timely manner. However, those few who fail to respond are subject to disciplinary action by the Commission. If you need more time, ask for it. If you have questions, contact the staff member who wrote to you and he or she will be glad to clarify the request.
Sincerely yours,
Stephen L. Fussell
Consumer Protection Officer
This article came from the November 2004-Vol35-2 edition of the bulletin.
Gov. Michael F. Easley has reappointed Real Estate Commission Chairman Matthew J. “Rick” Watts and members Raymond A. “Buddy” Bass and Sang J. Hamilton, Sr., to three-year terms expiring July 31, 2007 and the North Carolina Senate, upon the recommendation of Senate President Pro Tem Marc Basnight, has reappointed Vice Chairman Marsha H. Jordan to a term ending July 31, 2005.
This article came from the November 2004-Vol35-2 edition of the bulletin.
By: Blackwell M. Brogden, Jr., Chief Deputy Legal Counsel
Did you know that the Real Estate License Law allows the Commission to apply to the Superior Court for an injunction to prevent unlicensed people and firms from engaging in real estate brokerage? Unfortunately, the Commission has had to turn to this remedy more often recently than at any time in its history in order to protect the public.
An injunction is an order issued by a judge directing a person or firm to refrain from specified acts or conduct. This form of judicial action is used when a simple judgment for money will not protect the rights of a party in a civil action. Injunctions are used in real property cases to enforce restrictive covenants, stop trespassers, or prevent other interference with an owner’s rights in a property; in commercial cases to prevent misuse of trademarks, copyrighted or patented material or breach of an agreement not to compete; and, in cases brought by a government agency, such as the Commission, to end continuing violations of law or prevent further violations of law.
In order to obtain an injunction, the Commission first files a complaint in civil court and serves the unlicensed person or firm. The defendants can answer the complaint and raise any defenses they may have, e.g. that they are properly licensed or that they are not engaged in unlicensed activity. Ultimately, the question of whether unlicensed conduct has occurred is decided by the court. If the Commission proves the unlicensed activity, the court can issue an injunction requiring the unlicensed person or firm to stop. Failure to comply can result in punishment for contempt of court, including fines and imprisonment.
Of course, not all unlicensed activity is prohibited by law. For example, buying, selling or leasing one’s own property has always been exempt from the License Law. However, occasionally someone without a license will attempt to broker real estate transactions, including leases or sales, without a license. Although such persons may call themselves “consultants” or “advisors,” if they are assisting others in buying, selling, or leasing, for a fee, their conduct is unlawful.
On the other hand, in some cases, unscrupulous persons and firms, while claiming to be dealing on their own account, are actually acting as unlicensed brokers by unlawfully “flipping” property or renting real estate of others through the use of unrecorded sham transactions or using recorded documents that misrepresent the true nature of the transaction.
The Commission’s Legal Division has pursued the civil remedy of injunctive relief against persons and firms who, while claiming to be dealing on their own account, are actually engaged in the unlicensed practice of real estate brokerage. In other cases, the Commission, together with the Consumer Protection Section of the Attorney General’s office, have jointly filed civil suits to halt unlicensed brokerage and to end unfair and deceptive trade practices being used against consumers. In these cases, the Commission and Attorney General’s office may pursue violations of additional statutes, such as the laws governing credit repair services, discount buying clubs, the sale of products regulated as insurance or security interests, and loan fraud.
There are several important actions a licensee can take when confronted with a transaction that may involve unlicensed brokerage activity masquerading as something else:
(1) Advise your client to consult with their own attorney before entering into a transaction with unusual documents or a “creative” approach;
(2) Consult the Consumer Protection Section of the Attorney General’s Office, (919) 716-6000 or www.ncdoj.com;
(3) Contact the Commission’s Legal Services Division, (919) 875-3700, Ext. 131 for additional information.
This article came from the November 2004-Vol35-2 edition of the bulletin.
Previously given only to persons taking the Broker-in-Charge Course, the Real Estate Commission is now making its Broker-in-Charge Guide available to all real estate licensees and interested persons.
The recently revised and redesigned Guide is required reading for anyone who wishes to become the broker-in-charge of a real estate office. What administrative duties are imposed on the broker-in-charge? What supervisory functions must be performed? What are a broker-in-charge’s responsibilities regarding trust accounts? These and many other questions are answered in this informative publication.
Also now available is the latest edition to the Commission’s popular series of “questions and answers” brochures–Questions and Answers on: Real Estate Closings.
Designed to answer many of the questions frequently asked by purchasers about residential real estate closings, the pocket-sized publication covers such topics as loan commitment letters, property inspections, title insurance, deeds, homeowner associations, and closing statements.
For information on purchasing the Broker-in-Charge Guide and Real Estate Closings brochure, see page of this Bulletin or the Commission website (www.ncrec.state.nc.us).
This article came from the November 2004-Vol35-2 edition of the bulletin.
By Emmet R. Wood Director, Audits and Investigations
If you are the broker-in-charge of a real estate office and need to open a bank account to deposit trust funds, the bank account:
For more information on opening trust accounts, please see the Trust Account Guidelines, Section IV under TRUST ACCOUNTS.
This article came from the November 2004-Vol35-2 edition of the bulletin.