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Disciplinary Actions

JESSE BURGER (SPRING LAKE) – The Commission accepted the permanent voluntary surrender of the temporary real estate license of Burger, effective February 14, 2024. The Commission dismissed without prejudice allegations that Burger violated provisions of the Real Estate License Law and Commission Rules. Burger neither admitted nor denied misconduct.

CHASITY ANN DEBARBER (JACKSONVILLE) – By Consent, the Commission reprimanded Debarber, effective February 1, 2024. The Commission found that Debarber, acting as the broker-in-charge of Roga LLC, advertised properties on social media for rent by others without obtaining written permission.

ZONDRA DENISE HALL (FAYETTEVILLE) – By Consent, the Commission suspended the broker license of Hall for a period of 12 months, effective February 1, 2024, but stayed the suspension after 1 month upon certain conditions. The Commission found that Hall purchased a property in the name of Hall’s LLC and made renovations and additions to the property.  Hall listed and advertised the property as connected to city sewer. Following closing, the buyer learned that the property was not connected to city sewer. Hall was notified and connected the property to city sewer.  Hall failed to verify that a permit was obtained for the renovations and additions to the property completed by one of Hall’s contractors, and failed to disclose the lack of that permit to the buyer. Hall also failed to provide a physical address for herself or the firm.

SARAH KIRAMA (GREENSBORO) – By Consent, the Commission suspended the broker license of Kirama for a period of 24 months, effective January 10, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Kirama acted as a listing agent for a residential property and received a home inspection report from a buyer who later terminated the contract. The inspection report noted certain items needed repair or replacement. Kirama relisted the property and noted in agent remarks on MLS that the report was available upon request but falsely stated that seller made all repairs mentioned in the report when her seller-client made some but not all repairs noted on the report. Kirama failed to advise her client to update the RPOADS form and failed to otherwise disclose material facts described on the inspection report that were not repaired by the seller. In two subsequent transactions, Kirama provided the inspection report only after the buyers went under contract.

LCW MANAGEMENT LLC (CLEMMONS) – The Commission accepted the permanent voluntary surrender of the real estate firm license of LCW Management LLC, effective February 14, 2024. The Commission dismissed without prejudice allegations that the firm violated provisions of the Real Estate License Law and Commission Rules. The firm neither admitted nor denied misconduct.

LATOYA NICOLE OWENS (NEW BERN) – By Consent, the Commission suspended the broker license of Owens for a period of 12 months, effective February 1, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Owens represented the buyer in the subject transaction.  Sellers advertised a $3,500 seller-paid closing credit and a 1% lender credit with the use of a preferred lender. Owens failed to include these terms in the offer to purchase and contract that was accepted by the seller. The sellers would not thereafter offer the credits. Owens failed to enter into a buyer agency agreement prior to the time of offer.

MANUEL PONCE DE LEON (JACKSONVILLE) – By Consent, the Commission suspended the broker license of Ponce de Leon for a period of 12 months, effective February 1, 2024. The Commission found that Ponce de Leon represented buyers in the purchase of the subject property.  The buyers asked Ponce de Leon if the subject property had previously flooded.  Ponce de Leon failed to inquire from the listing agent and failed to discover permits for work evidencing previous flooding to the subject property caused by a hurricane. Ponce de Leon failed to provide and review the Working with Real Estate Agents disclosure at first substantial contact and failed to provide fully executed documents to the buyers in the subject transaction.

JOSEPH R PUMA (HUNTERSVILLE) – By Consent, the Commission suspended the broker license of Puma for a period of 6 months, effective February 1, 2024. The Commission then stayed the suspension in its entirety upon certain conditions. The Commission found that Puma represented the sellers of the subject property. The buyer was represented by a buyer’s agent. Puma advertised the subject property as a “private lot home.” Puma failed to verify, prior to offer, the planned use of the multiple parcels of residential land adjacent to the subject property.  A preliminary plan for a 124-single family home subdivision had been proposed and noticed by the locality. Puma did not have actual knowledge of the proposed development plans for the adjacent land.  Buyer closed on the subject property and shortly thereafter, the land was sold, development of the subdivision received approval and construction began.

ROGA LLC (JACKSONVILLE) – By Consent, the Commission reprimanded ROGA LLC, effective February 1, 2024. The Commission found that the firm advertised properties on social media for rent by others without obtaining permission.

ALFRED S RUSHATZ (SANFORD) – The Commission accepted the permanent voluntary surrender of the real estate license of Rushatz, effective February 1, 2024. The Commission dismissed without prejudice allegations that Rushatz violated provisions of the Real Estate License Law and Commission Rules. Rushatz neither admitted nor denied misconduct.

JOELLEN EUBANKS SHIPMAN (LAKE TOXAWAY) – Following a hearing, the Commission permanently revoked the broker license of Shipman, effective November 20, 2023. The Commission found that Shipman listed the subject property as a short-term vacation rental.  When Shipman was unable to successfully procure short-term tenants, the property owner agreed to allow for a long-term tenant in the subject property.  The lease agreement approved by the property owner prohibited pets without the prior written consent of the property owner.  Shipman altered the lease agreement previously approved by the property owner in order to allow pets in the subject property without obtaining consent of the property owner.  Respondent failed to provide an executed copy of the lease agreement to the property owner.  Respondent failed to timely deposit the tenant security deposit in her trust account.  

MICHAEL D SONBERT (CLEMMONS) – The Commission accepted the permanent voluntary surrender of the real estate license of Sonbert, effective February 14, 2024. The Commission dismissed without prejudice allegations that Sonbert violated provisions of the Real Estate License Law and Commission Rules. Sonbert neither admitted nor denied misconduct.

Case Study: Criminal Conviction

FACTS: A broker attended a social event on May 17, 2022. As the broker was driving home, she was stopped by the NC Highway Patrol.  When the State Trooper approached the car, he informed the broker that she was stopped for swerving over the center line.

During the traffic stop, the broker completed a field sobriety test. At the conclusion of the sobriety test, she was arrested for driving while impaired. The broker bonded out of jail the next morning. Upon being released, she noticed several missed telephone calls and text messages from her BIC.

The broker immediately called her BIC and explained that she had just been released from jail due to her arrest for DWI. During the conversation, the BIC informed the broker that she must notify the Commission if she is convicted of the DWI.

The broker’s case was disposed of on March 1, 2023. The judge found her guilty of a Class 1 misdemeanor. The broker informed the Commission of her misdemeanor DWI conviction on March 25, 2023 by submitting a Criminal Conviction Disciplinary Action Reporting Form.

ISSUE: Did the broker comply with Rule 58A .0113?

ANALYSIS:  Yes. Rule 58A .0113(a) states that a broker shall file with the Commission a Criminal Conviction Disciplinary Action Reporting Form within 60 days of a:

  1. final judgment, order, or disposition of any felony or misdemeanor conviction;
  2. disciplinary action or entering into a conciliation agreement or consent order with a governmental agency or occupational licensing agency;
  3. final judgment, order, or disposition of a military court-martial conviction; or
  4. notarial commission sanction pursuant to G.S. 10B-60.

The Criminal Conviction Disciplinary Action Reporting Form is available on the Commission’s website at www.ncrec.gov or upon request to the Commission and requires the broker to set forth their:

  1. full legal name;
  2. physical and mailing address;
  3. real estate license number;
  4. telephone number;
  5. email address;
  6. social security number;
  7. date of birth; and
  8. description of the criminal conviction, military court-martial conviction, notarial commission sanction, or professional license disciplinary action, including the jurisdiction and file number.

In this scenario, the broker was convicted on March 1, 2023. She notified the Commission on March 25, 2023, of her misdemeanor DWI conviction using the Criminal Conviction Disciplinary Action Reporting Form. The broker notified the Commission 24 days after her conviction. Therefore, she was in compliance with Rule 58A .0113(a)(1) which requires brokers to notify the Commission within 60 days of a final judgment, order, or disposition of any felony or misdemeanor conviction.

If the broker submitted the Criminal Conviction Disciplinary Action Reporting Form on May 1, 2023, or later, she would not have been in compliance with License Law and Commission Rule 58A .0113.

NOTE: Brokers do not have to notify the Commission if they have been arrested, charged or otherwise accused unless it results in a felony/misdemeanor conviction, disciplinary action, military court-martial, or notarial commission sanction.

RESOURCES:

N.C.G.S. § 93A-6(a) , 93A-6(a)(8), and 93A-6(a)(15)

License Law and Commission Rules: Rule 58A .0113

Form: Criminal Conviction Reporting

Reminder: Protect Yourself Against Scams

Scamming has become more prevalent due to technological advances. Hackers are taking advantage of technology innovations like Artificial Intelligence. So it is extremely important to be cautious prior to disclosing any personal/confidential information.  

Even the most tech savvy individuals can become a victim of fraudulent activity. Use these guidelines to help protect your personal information as well as your client and customer information.

You can stay up to date with various types of popular scams by visiting USA.gov.  You can also find other information there on how to report various scams.

Fair Housing: A Broker’s Guide

As real estate professionals, brokers play a crucial role in upholding fair housing principles and ensuring equal opportunities for all individuals in the housing market. In recent years, the landscape of fair housing needs has evolved, necessitating a deeper understanding and proactive approach from brokers.

Brokers must have a comprehensive understanding of federal, state, and local fair housing laws. The Federal Fair Housing Act prohibits discrimination based on race, color, religion, national origin, sex, familial status, and disability. It is also important to remember that in 2021, HUD expanded the definition of “sex” to include gender identity and sexual orientation. Brokers should regularly review and stay updated on these laws to ensure compliance in their real estate practices.

Implicit biases can impact decision-making processes, leading to unintentional discrimination in real estate transactions. Brokers must ensure fair treatment for all clients. Engaging in diversity training, self-reflection, and fostering an inclusive work environment can help brokers mitigate the effects of implicit bias in their practices.

In the event of a fair housing complaint, brokers must respond promptly and are advised to take appropriate actions to address the issue. This may involve conducting internal investigations, seeking legal guidance, and cooperating with Fair Housing authorities.

Fair housing practices are essential in the real estate industry. By staying informed, addressing implicit biases, providing equal access to housing opportunities, implementing inclusive marketing strategies, and responding effectively to fair housing complaints, brokers can contribute to a more equitable housing market for all individuals in North Carolina. Let us continue to work together to uphold the principles of fair housing and create a more inclusive future for our communities.

License Exam Change is HERE and it is GOOD!

As of March 1, 2024, the North Carolina Real Estate Commission (NCREC) is pleased to announce that the North Carolina real estate broker license examination will be administered through Pearson VUE. Pearson VUE is an international leader in exam administration for various industries in many states. In fact, they have been testing all the North Carolina insurance candidates for years.

Pearson VUE offers many testing locations throughout North Carolina and other states. In addition to 10 company-owned and operated test centers and 53 partner test centers in NC, testing sites are located on most NC Community College campuses. Also, many military bases have approved testing centers for candidates who have credentials to enter the base. You are encouraged to watch Touring a Pearson VUE Test Center if you would like more information.

The NCREC license exam is still a 2-part examination testing on the same content contained in the Broker Prelicensing Course Syllabus. The National section consists of 80 scored items and the State section consists of 60 scored items. More detailed exam information is contained in the Real Estate Licensing in North Carolina application booklet, available on the NCREC.gov website.

NOTICE: Thanks to the work of many dedicated NCREC staff members in the IT department and Education & Licensing Division, license candidates should experience no disruption in the licensing process due to the change in exam providers.

Are You Getting Notified of Rule Changes?

Did you know that you can opt-in to be notified of any proposed or final rule changes?  It’s a quick and easy process to subscribe to “rulemaking.”

What is Rulemaking? 

Rulemaking is the process by which the Commission implements or clarifies real estate brokerage procedure or practice requirements through the adoption, amendment, or repeal of rules. During permanent rulemaking, the Commission proposes rule language and sends it to the Office of Administrative Hearings (OAH). OAH publishes the proposed rule text in the North Carolina Register which provides notices to interested parties that the Commission has started the process to amend, adopt, or repeal a rule.

Why Should You Subscribe to Rulemaking?

Does This Subscription Provide Notice of Changes to Forms and General Statutes? No. Most forms are published by the North Carolina Association of REALTORS® (NCAR). NCAR publishes (to their members) a summary of changes to forms as soon as the new forms are released. General Statutes are enacted by the North Carolina General Assembly.

You can view the status of proposed bills (changes to General Statutes) or the final General Statutes online.  Statutes related to real estate are also published in the Commission’s License Law and Commission Rules booklet and the most pertinent changes are addressed in the Commission’s annual Update courses.

How to Subscribe to Rulemaking Notices

  1. Go to www.ncrec.gov
  2. Scroll down to License Law & Rules
  3. Select Subscribe to the Commission’s mailing list to receive notice of rulemaking
  4. Type your name and email address

Select Subscribe

Satisfying the NC Broker License Continuing Education Requirement

This year, there will be very few licensees who are exempt from the annual continuing education (“CE”) requirements. With over 7,000 licenses issued in the 2022-2023 license year, the elimination of equivalent credit, and the repeal of CE exemptions for brokers licensed in another state, there are quite a few brokers who must now complete North Carolina approved CE for the first time. In this article, we will review the CE requirement, how a broker can check their license record, and where to find CE courses for credit.

Pursuant to Rule 58A .1702, all North Carolina brokers must complete eight hours of CE each license year. These eight hours of CE are earned by successfully attending a four-hour elective course and a four-hour General Update (GENUP) or Broker-In-Charge Update (BICUP) course. Brokers who are BIC-Eligible, whether they are designated as a Broker-In-Charge or not, must attend the BICUP course to satisfy their continuing education requirement. All other brokers must complete the GENUP course. Every broker licensed prior to July 1, 2023, must complete eight hours of continuing education by 11:59 PM EST on June 10, 2024, to remain eligible for active licensure.

If you are unsure whether you have completed any continuing education that applies to this year’s requirements, you can go to the Commission’s website and access your Licensee Login. On the Commission’s homepage, select Licensing, and then select Licensee Login. Once you have logged in, select “CE License Information.” 

Under your name are two lines of text, “Current Update Hours completed for the 23-24 License Year” and “Elective Hours completed for the 23-24 License Year.” A four beside either of these phrases means that you have satisfied that portion of your CE requirement. If there is a zero, then you have not completed that CE requirement. Therefore, you will need to complete this requirement prior to June 10, 2024, at 11:59 PM EST to maintain an active license status on July 1st.

If you need to find an Update course, click the Education tab on the Commission’s homepage. In the drop-down select “Search CE Course Schedules.” You can then search for the course you need to complete and even limit your search to a specific location, education provider, instructor, etc. The course number for the synchronous (live online) GENUP course is 5924; the in-person one is 9924. The course number for the synchronous BICUP course is 5824; the in-person one is 8824. While the Update course can only be taken live, whether online or in-person, electives can be taken in-person, synchronously or via distance format (self-paced online).

NOTE: You can either search for live electives on this page or go to the Distance Continuing Education Providers page to find a provider that offers self-paced online electives.

For each CE course you complete, the education provider of that course is required to provide you with a course completion certificate and report your course completion to the Commission within 7 days. It is your responsibility to keep that course completion certificate in your personal records and review your license record to ensure the course completion has been reported. If the course has not posted to your license record within 10 days, contact the education provider and request that they report your course completion as soon as possible. In addition to completing your CE requirement, do not forget to renew your license between May 15th and June 30th.  While you do not need to complete CE prior to renewing your license, you will need to complete it prior to June 10, 2024, at 11:59PM EST.

When Does an Offer Become a Contract?

The Standard Form 2-T is called the “Offer To Purchase and Contract” for good reason. The form begins its life as an offer usually submitted by a prospective buyer to a seller through their respective agents. The offer may later become a contract if and only if all of the criteria set forth in the Statute of Frauds are satisfied.

In order to satisfy the Statute of Frauds for the creation of a binding real estate sales contract, there must be a written agreement signed by all parties and the fact that it has been signed by all parties must be communicated to any party against whom enforcement is sought. Until all of these criteria have been satisfied, there is no contract.

In our investigations of complaints filed against brokers, we sometimes find that brokers have informed buyers, sellers, and/or other brokers that the sellers have “orally accepted” an offer or that there is an “oral or verbal agreement” between the sellers and buyers. Use of such terms is misleading and therefore inappropriate, because these terms can lead others into falsely believing that a binding contract has been formed.

When a seller says, “I will accept that offer,” the seller is orally expressing a willingness to accept the offer. However, acceptance means that a seller has signed a buyer’s written offer without making any changes. Therefore, expressing a willingness to accept an offer is not equivalent to accepting (i.e. signing) a written offer and does not create a contract. Until a seller signs a buyer’s written offer without making any changes and communicates that fact to the buyer (or buyer agent), no contract has been formed and the seller is free to consider and accept an offer from another buyer. For these same reasons, an oral offer can never become a contract and a buyer agent should encourage their buyer-clients to reduce all offers to writing.

When a buyer agent submits a written offer and the listing agent replies that the seller has “accepted” the offer, the buyer agent should immediately ask the listing agent, “Have all the sellers signed the offer?” If the listing agent replies, “No,” then the seller has NOT legally accepted the offer, and the buyer agent should not inform the buyer that the seller has accepted the offer. If the listing agent replies, “I don’t know,” then the broker cannot be certain whether a contract has been formed, because although the so-called “acceptance” has been communicated, it is not clear whether the offer has been signed.  

Example: You’re a listing agent and receive a written offer from a buyer or buyer agent. The seller and buyer negotiate orally through you and the buyer agent via phone or text until they come to mutually-agreeable terms. The seller has signed nothing. Then you receive a written offer from a second buyer or buyer agent. Until the seller signs a written offer from the 1st buyer without making any further changes and you communicate that fact to the first buyer (or buyer agent), the only thing you can tell the second buyer (or buyer agent) with your seller’s permission is, “There is an offer on the table.” Saying that there is a “verbal or oral contract” or a “verbal or oral agreement” is improper, because the use of the term “oral” contract or agreement falsely implies there is a binding agreement between the seller and the first buyer. Use of the term “verbal” agreement is ambiguous because “verbal” simply means “in words” – which might be oral or might be written, and again can imply that there is a binding agreement when in fact there is not. Such an implication can discourage the second buyer from looking at the property and making an offer.

A seller’s agent has a duty to get the best price and terms for the seller. One way to do this is by soliciting as many offers as possible. If the seller’s agent misleads a second prospective buyer into believing there is a binding agreement between the seller and the first buyer;  thereby discouraging the second buyer from making what could be a better offer than submitted by the first buyer, then the seller’s agent is doing a disservice to the seller-client and giving an unfair advantage to the first buyer to the detriment of the second buyer.

Until all of the criteria set forth by the Statute of Frauds have been satisfied, the following statements are prohibited:

It is a misrepresentation of material fact, and therefore improper, for a broker to inform a buyer that their offer has been accepted when the seller has not signed an unchanged offer. North Carolina General Statutes § 93A-6(a)(1), (8), and (10) authorize the Real Estate Commission to pursue disciplinary action against a broker who misrepresents a material fact, is unworthy or incompetent to act in a manner which protects the public, or engages in improper conduct, respectively.  We recommend that you educate yourself, your clients and your customers regarding the requirements for forming a contract.

The Commission publishes a variety of brochures to help brokers and consumers better understand various aspects of real estate transactions. One such brochure is entitled, “Questions & Answers on: Offer & Acceptance.” This brochure will help you and your clients better understand this part of the home-buying process. If, after reading this article and the aforementioned brochure, you are unclear regarding the criteria for forming a valid and binding contract and how to communicate this process to buyers and sellers, then you should immediately consult your Broker-In-Charge as this is an extremely important part of every real estate sales transaction. 

Using Artificial Intelligence for Real Estate Brokerage

Victoria, NCREC’s first AI generated assistant, appeared in the January 2024 eBulletin on behalf of the Tech Study Group.

Once Victoria made her debut appearance in the eBulletin, the Commission consistently received the following question, “How did you create the video?”

In the following instructional video, Victoria explains how she was created. She also mentions how brokers/brokerages can use AI videos while practicing real estate to help educate and communicate with clients and consumers.

Simplified Continuing Education Hours to Increase Professional Competence

Pursuant to Rule 58A. 1702, North Carolina brokers must complete eight credit hours of real estate continuing education each license year. The eight hours consist of:

All brokers without BIC-Eligible status and provisional brokers must attend the General Update Course and all Brokers-in Charge and BIC Eligible Brokers must attend the Broker-in-Charge Update Course. A broker is required to complete eight credit hours of continuing education by June 10th at 11:59 PM EST. This requirement begins upon the second renewal following initial licensure and upon each subsequent annual renewal.

In the past, Rule 58A .1708 permitted brokers to request equivalent credit for a course that was not approved by the North Carolina Real Estate Commission by submitting a $50 fee, course outline and completion certificate. On July 1, 2023, the availability of equivalent credit was removed for all brokers, except an instructor who either authored or taught a course. Therefore, there is no equivalent credit offered for a course that is not approved by NCREC.  A broker who previously submitted courses for equivalent continuing education credit should take the required Update course and an approved North Carolina elective prior to the June 10th deadline.

Rule 58A .1708 was changed to ensure that all North Carolina brokers are required to take North Carolina approved courses. The change also eliminates the need for brokers to pay additional fees, especially when courses were not approved for equivalent credit.

Rule 58A .1711 previously exempted brokers who were licensed in another state from the continuing education requirements in North Carolina. On July 1, 2023, the Commission repealed that rule. All brokers licensed in North Carolina must meet the same eight hour continuing education requirement. The prevalence of online courses means that this is no longer an unreasonable burden for licensees living outside North Carolina. These rule changes were intended to make things simpler for brokers and to assure that all brokers in North Carolina obtain the same education regarding North Carolina rules, statutes and information to ensure the competence of brokers practicing in the state. If you have questions about the status of your continuing education, you can login and check your continuing education record on the Commission’s website.