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Rule Changes Proposed

Following is a summary of proposed Commission rule changes which, if approved, would become effective July 1, 2010:

• Require retention of trust account and transaction records for a period of five years instead of three as the current rules require.

• Add questions to the Residential Property Disclosure Form for home sellers to disclose whether their properties are located within one mile of the boundary of certain military facilities and to disclose noise, air traffic, vibrations, lights and other impacts from nearby military facilities;

• Allow postponement and completion of continuing education, Broker-in-Charge, and postlicensing courses, and the payment of license renewal fees for individuals licensed as brokers and approved as instructors who are also members of theUnited States armed forces who are serving in combat or in presidentially-declared disaster areas.

• Clarify when and under what circumstances students in the Broker-in-Charge Course and in all continuing education courses may be absent during the scheduled classroom hours and still receive continuing education credit for attending the course.

A public hearing for comments on the proposed rule changes will be held at 9:00 a.m., February 10, 2010 in the Conference Room of the Commission’s office.

This article came from the October 2009-Vol40-2 edition of the bulletin.

Real Estate Law, Rules Book Updated

The Commission’s North Carolina Real Estate License Law and Commission Rules book has been updated and reprinted.

This 92-page book is published as a convenient, portable reference and contains four sections:

• North Carolina Real Estate Law

• Commission Rules

•   Trust Account Guidelines

• License Law and Rules Comments

The Rules and Comments sections are current with the rule changes effective July 1. The Comments section serves as a study guide for the initial licensing examination.

This article came from the October 2009-Vol40-2 edition of the bulletin.

Real Estate Commission Elects Marsha H. Jordan, Chairman

Marsha H. Jordan of Lincolnton has been elected Chairman of the North Carolina Real Estate Commission for the 2009-2010 term beginning August 1, it was announced by Phillip T. Fisher, Executive Director.

A graduate of the University of Virginia (MWC), Jordan entered the real estate business in 1986.

She is owner of Apple Realty in Lincolnton, a Graduate of the REALTOR® Institute and holds the Certified Residential Broker, Certified Residential Specialist, and GREEN designations.

Appointed to the Commission in 1999, Jordan is president of the North Carolina Real Estate Education Foundation and past president and 2001 REALTOR® of the Year of the Lincoln County Board of REALTORS®.

Active in community affairs, she is a former director of the Lincolnton Chamber of Commerce, past president for Downtown Development, and currently president of the Lincolnton Rotary Club.

Jordan and her husband, Max, a REALTOR® and contractor, reside in Lincolnton and have one son, Jason, a student at the University of North Carolina at Charlotte and a REALTOR®.

This article came from the October 2009-Vol40-2 edition of the bulletin.

Pocket Card Gets New Look

The pocket card you receive with your real estate license has been redesigned to be more useful and better protected. Issuance of the new design began in June with renewals following depletion of existing card inventory.

As shown, the card has a cover to shield the surface containing your name, license number and signature. Kept closed, it will prevent smudging.

The opposite side of the cover contains Commission contact information for easy access along with a continuing education deadline reminder.

This article came from the October 2009-Vol40-2 edition of the bulletin.

Outstanding Examination Performance Records July 1, 2008 – June 30, 2009

As part of the Real Estate Commission’s quality control program for its approved real estate schools and instructors, it monitors the performance of their students taking the license examination for the first time within 180 days of course completion.  The results are periodically reported to the schools/instructors and annually reviewed by the Commission.  The most recent annual performance record for each school may be found on the Commission’s website.

During the July, 2008-June, 2009 reporting period, 72% of all first-time candidates passed.  The Commission congratulates the following schools and instructors (which had six or more students tested) for having at least 80% of their students pass the license examination on their first attempt:


Allen Tate School of Real Estate, Charlotte;  Asheville-Buncombe Community College, Asheville/Madison; Cape Fear Community College, Wilmington; Central Piedmont Community College, Charlotte/Matthews/Huntersville; Coastal Carolina Real Estate Academy, Wilmington; Cumbie Institute of Real Estate, Asheville;  Galloway School of Real Estate, Hayesville/Murphy;  Mingle School of Real Estate, Charlotte/Cornelius; Mitchell Community College, Statesville/Mooresville;  Superior School of Real Estate, Charlotte/Concord/Cornelius/Huntersville


Oscar Agurs, Charlotte;  Richard Barden, Franklin; Pete Camak, Pine Knoll Shores; Lowell Dotson, Matthews; Rick Fuller, Greensboro; Bill Gallagher, Charlotte; Frank Galloway, Andrews; Scott Gibson, Raleigh; Violet Harrington, Durham;Sandra Hubbard, Kittrell; Carolyn Lambert, Charlotte; Dwight Lawing, Jr., Parkton; Stephen Lawson, Winston-Salem; Saundra Martin, Salisbury; Terri Minnis, Wilmington; Brian Pate, Wake Forest; Laurel Pettys, Wilmington; Rashad Phillips,Charlotte;   Bobby Potts, Asheville; Kevin Sensing, Goldsboro; Tim Terry, Charlotte; Jerry Thomas, Wrightsville Beach; Glenn Weeks, Holly Springs; Sandy Williams, Charlotte; Terry Wilson, Huntersville; Ben Wirtz, Iron Station

This article came from the October 2009-Vol40-2 edition of the bulletin.


The statistics here generally reflect the activities of the Real Estate Commission during the period from May 1, 2008 to April 30, 2009.


•     246,609 telephone calls

•     1.5 million+ Web site “hits”


•     640,000+ publications distributed to brokers, consumers, applicants


•    8,645 student rosters electronically processed for CE courses and 859 for post licensing courses


•      457,468 license records changed

•     5,663 applications processed for licenses by examination

•     5,273+ license examinations administered

•     2,993 licenses by examination issued

•     339 licenses issued by reciprocity

•     1,051 firm licenses issued

•     209 expired, surrendered and suspended licenses reinstated

•     2,243 Certificates of License History issued

•     216 license applications reviewed by Commission for character issues

•     106 license applicant conferences     conducted


•       7 new private real estate school licenses issued and 66 renewed

•     27 real estate instructors approved (a 19% increase) and 109 renewed

•     83 new continuing education elective courses approved (for a total of 437 courses)

•     28 new continuing education sponsors approved (for a total of 231)

•     13 new continuing education Update Course instructors approved (for a total of 190)

•     41 Broker-in-Charge Course sessions conducted for 2,027 licensees


•     152 field investigations completed

•     196 trust accounts examined

•     373 persons interviewed

•     13 trust account sessions conducted for 310 students

•     1,848 students instructed for trust account portion of BIC course


•   1,037 case (complaint) files opened and 1,101 closed

•       33 licensees reprimanded

•     70 licenses suspended

•     70 licenses revoked

•     20 licenses surrendered

•     95  cases with conditional remedies

This article came from the October 2009-Vol40-2 edition of the bulletin.

New Law Affects Property Raffles

By Charlene D. Moody
Deputy Legal Counsel

The Real Estate Commission often gets calls from licensees and homeowners seeking alternative ways to bring about sales. One such method suggested by callers is to raffle a home. The seller would sell raffle tickets, the winning ticket-holder would receive the property, and the seller would receive the proceeds.

In the past, the answer was clear that under North Carolina law, no real estate could be offered as a raffle prize under any circumstance. However, in May 2009, the N.C. General Assembly amended N.C.G.S. §14-309.15 to allow real property to be offered as a prize in a raffle by certain organizations.

The maximum appraised value of the real property to be raffled is $500,000 for any one prize and the total appraised value of all real estate prizes offered by one nonprofit organization may not exceed $500,000 in any one calendar year.

Licensees must note that the statute authorizes only nonprofit organizations or government entities to conduct raffles.

Sellers might ask if they would qualify if they donated a portion of the raffle proceeds to a charity. However, the statute provides that the proceeds of the raffle may not be used to compensate any person to conduct a raffle. The Commission, therefore, takes the position that the seller may not receive any part of the raffle proceeds nor may a licensee receive any fee or commission from the raffle proceeds.

A person conducting a raffle in violation of N.C.G.S. §14-309.15 shall be guilty of a Class 2 misdemeanor.

Additionally, licensees and the public should be aware that there may be surprising tax consequences of winning a real estate raffle. Licensees should advise any participant in such a raffle to consult a tax advisor concerning the tax consequences to the winner. For example, in the current tax year, the home may be reportable as ordinary income, leading to a large income tax bill.

Further, when the winner decides to sell the home, he or she may encounter a large capital gains tax because the cost basis for the home will be the ticket price rather than the value of the home.

This article came from the October 2009-Vol40-2 edition of the bulletin.

North Carolina Partners with Federal Agencies in Builder Fraud Case; Nets $50 Million National Settlement

(The following is excerpted from ARELLO® Boundaries, the newsletter to members of the Association of Real Estate License Law Officials.)

The North Carolina Real Estate Commission recently joined numerous federal agencies and the state’s Commissioner of Banks in announcing the resolution of an inter-agency investigation of Beazer Homes, a home building company based inAtlanta, Georgia, with operations in at least 21 states, and its wholly-owned subsidiary, Beazer Mortgage Corporation.

In a criminal Bill of Information filed along with a Deferred Prosecution Agreement resolving the case, the United States Attorney for the Western District of North Carolina (Charlotte Division) charged the company with engaging in massive and complicated schemes that included discount point fraud, down payment assistance fraud, HUD-licensing fraud and mortgage loan stated-income fraud.

In the Deferred Prosecution Agreement executed by the United States Attorney and Beazer, the company agreed to pay up to $50 million dollars in restitution over several years.

The announcement of the investigation and resolution of the case included public statements by officials of the many agencies involved in the investigation including U.S. Attorney Edward R. Ryan, HUD Secretary Shaun Donovan, the North Carolina Deputy Commissioner of Banks and North Carolina Real Estate Commission Deputy Chief Counsel Janet Thoren.

Thoren said, “The North Carolina Real Estate Commission is committed to the fight against mortgage fraud. We are pleased that we were able to partner with the U.S. Attorney’s Office in the Western District and each of the other agencies involved in this complicated and detailed investigation and work together to bring about a result that includes restitution to so many consumer victims, both in North Carolina and nationwide.”

This article came from the October 2009-Vol40-2 edition of the bulletin.

Matters of Survey Matter

From The North Carolina Society of Surveyors, Inc.

(Reprinted from the March 2004 Real Estate Bulletin)

There is a school of thought that it is not necessary to obtain a current survey when purchasing real estate–that title insurance and affidavits from sellers sufficiently protect the purchaser’s interests or that the purchaser can simply rely upon a previous survey. However, real estate agents should be aware that purchasers face potential problems typically referred to as “matters of survey” when a current field survey of property is not performed.

Matters of survey relate to anything that could negatively affect the use of property being purchased.  These include, encroachments across property lines or building restriction lines; fences/walls, landscaping features, wells, swimming pool decks; the location of utilities, access ways, etc., relative to easements, property lines or buildings; the existence of flood zones; and other similar matters.

It is possible that matters of survey may be covered in title insurance policies. But coverage that protects the purchaser=s interests is unlikely to be included unless a survey is performed prior to issuance of the policy. ALender=s policies@ maycover matters of survey without requiring a current survey, but they do not protect the purchaser. The risk associated with lenders= policies is often acceptable to the title insurer because claims from a lender are not likely to occur until the purchaser defaults on the loan.

In recent years, it has become popular to have the seller sign an affidavit effectively guaranteeing that no matters of survey negatively affect the property. However, in doing so, the seller may be unwittingly accepting some unwarranted risks of liability. The buyer may also be tempted to simply rely upon a survey document from a previous transaction, but such survey may not contemplate changes to the property since the earlier survey was performed.

Many people choose not to obtain a current survey because they believe it will delay closing the transaction. This may be true if it is not ordered from the surveyor until closing of the transaction is assured. However, if the purchaser decides that a current survey is desired, it can be ordered early enough so as not to delay the closing date.

An informed purchaser knows that an accurate, current survey will provide peace of mind that cannot be obtained from any other source.

This article came from the October 2009-Vol40-2 edition of the bulletin.

Knight, Mosteller Appointed To Real Estate Commission

Governor Beverly E. Perdue has appointed Everett “Vic” Knight of Raleigh and Alice L. Mosteller of Lake Junaluska to the Real Estate Commission, it was announced by Phillip T. Fisher, Executive Director.

Knight, a licensed broker since 1984, is also a certified appraiser and the owner of Chapel Hill Appraisals and Consultants. He previously was broker/owner of Century 21 Vic Knight Realty in Hillsborough for 10 years.

A native of Burlington, Knight graduated from North Carolina State University with a BS in Civil Engineering and worked internationally for Bechtel Corporation for several years. He was a licensed General Contractor in North Carolina.

Knight is currently a director of the National Association of REALTORS®, a past president and member of the board of directors of the North Carolina Association of REALTORS®, and past president of the Chapel Hill Board of REALTORS® and the Triangle Multiple Listing Service. He is a Continuing Education Instructor for the Real Estate Commission and the North Carolina Appraisal Board.

Knight has two daughters, “Krystle” Gray Knight, 23, and “Victoria” Scarlet Knight, 16, and is a member of Hillsborough United Church of Christ.

Mosteller is Vice President/Managing Broker of the Beverly Hanks & Associates office at Waynesville. She formerly owned Apple Realty, Inc., in Waynesville for 18 years until selling it to Beverly Hanks in 2004.

A graduate of Appalachian State University, she taught at schools in North Carolina and Virginia for 20 years. She received her real estate license in 1984.

She is a former Haywood County and North Carolina REALTOR® of the year and a past president of the Haywood County Board of REALTORS®

Mosteller has two daughters, Debra Bryant, a Registered Nurse in Raleigh, and Paulette Childers, a broker at Beverly Hanks in Waynesville.

This article came from the October 2009-Vol40-2 edition of the bulletin.