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Current Stats: Monthly Licensee Count as of October 1, 2021

Resources at your Fingertips

Have you checked out the Commission’s website (ncrec.gov) recently? Did you know the website offers a wide variety of resources for brokers and consumers?

Resources for brokers include:

Resources for consumers include:

Also, the Support page provides brokers and consumers with responses to frequently asked questions.

For more information, contact the Education & Licensing Division at ls@ncrec.gov or 919.875.3700.

A Broker’s E-mail Might Prove BINDING!

The ease and convenience of negotiating real estate transactions electronically may come with hidden pitfalls. Details and terms communicated in a broker’s e-mail or text might be considered by a court to be binding. Brokers and their clients want immediate responses regarding Offers to Purchase, amendments, or due diligence requests, especially in a fast-paced market. Some say we live in an “instant gratification” era; but at what risk?

A real estate contract must be a written agreement, signed by all parties, and then the fact that it has been signed must be communicated to all parties in order to satisfy the Statute of Frauds and contract law. However, many transactions today are negotiated quickly via e-mails and texts between listing brokers and buyer agents and between those brokers and their clients, before being reduced to writing on contract forms. Communications go back and forth between brokers expressing their client’s offer, counter offer or responses to the proposed terms of the transaction. Even after a contract is signed, negotiations continue about additional items including extensions of various dates, repair requests, additional inspections, and possession of the property.

The danger is, what a broker communicates electronically might be deemed binding. E-mails and electronic communications can become the subject of lawsuits and damaging to the parties involved. In a 2012 Massachusetts case, Feldberg, et al. v. Coxall, the buyer alleged that the emails exchanged by the buyer’s and seller’s attorneys evidenced the creation of a contract. The judge cited the Massachusetts Uniform Electronic Transactions Act saying “an e-mail signature block or even the “from” portion of the email may constitute valid electronic signatures in cases where the parties are conducting the transaction electronically.” Even though the seller argued that no contract was signed, the ruling opened up the possibility for a court to look at whether the e-mails constituted a binding agreement. (The parties eventually settled the matter out of court).

In North Carolina, the Uniform Electronic Transactions Act, Article 40 of Chapter 66 of the North Carolina General Statutes, can be found at the following link:  https://www.ncleg.net/enactedlegislation/statutes/html/byarticle/chapter_66/article_40.html

According to this statute, when deciding if the parties have agreed to handle the transaction electronically, the context and surrounding circumstances, including the parties’ conduct, is considered. The Act also states the requirement for a contract to be “in writing” may be satisfied if the provider delivered the communication in an electronic record capable of retention. 

Although to date, we know of no North Carolina Court that has held that electronic communication between brokers constituted a binding contract, by negotiating the possible terms of a transaction electronically, real estate brokers might be putting themselves and their clients in jeopardy and not realize it until it is too late.   

So, how can brokers protect themselves when negotiating electronically on their client’s behalf? Consider the following when communicating via email: 

You may want to include in your communications that your client must approve the terms of the transaction; negotiations are simply preliminary until all parties sign the agreement and properly communicate their acceptance. You might also state that your email or text does not create acceptance or a binding contract.  

At one time, Offers to Purchase were delivered by hand, in their entirety, initialed, signed and dated.  Counter offers with clearly marked changes, initialed and signed by all parties, were also hand delivered.  Today, most negotiations take place electronically, so taking steps to communicate clearly and safely by electronic means is essential. 

When a broker proposes or responds electronically to possible transaction terms on behalf of their client, it is imperative they use non-binding language to protect both themselves and their clients from possible pitfalls.

Additionally, once that written contract is signed and acceptance is communicated, don’t assume that subsequent negotiations are handled differently than the initial contract negotiations. Any changes to the written contract still require signatures and communication of acceptance. If your buyer client has submitted a Due Diligence Request and Agreement, and through emails the Listing Broker has described what the seller will repair, but the seller has not signed the document, don’t assume that the seller is bound to the terms of the agreement or to do the repairs. Because it is possible that the brokers’ communications could bind the parties, it is best to take care that the parties are not bound to repairs or other agreements by the brokers’ electronic communication. Instead, make sure that the contract documents are modified to reflect the parties’ agreements.

North Carolina Real Estate Commission Works to Implement New Law Modernizing State’s Timeshare Laws

Passing with Unanimous & Bipartisan Support, Commission Hails New Law as Important for State’s Consumers, Businesses & Industry

With the signing of House Bill 531 into law on October 6, 2021, which updates North Carolina’s laws on timeshare regulation, the North Carolina Real Estate Commission is now working on its implementation. The Commission also hailed the new law, which passed the North Carolina General Assembly with unanimous and bipartisan support before being signed into law, as a needed and an important modernization to the state’s timeshare laws that will have positive impacts for consumers, businesses and the industry.

The new lawsubstantially revises the North Carolina Time Share Act by:

“North Carolina’s timeshare laws haven’t been updated for nearly 40 years, and because of that, they were no longer reflective of the industry and how it’s changed,” said Janet Thoren, Legal Counsel for the Commission. “By updating North Carolina’s timeshare laws, we’ve now brought them into the 21st century and they’re in line with the direction in which the industry is headed. It puts consumer protections in place, like regulating timeshare resale and exit company activity and codifying conduct that violates the law – all things that were needed and welcomed for a stronger, more robust consumer protection program.”

“As the body that regulates timeshare in the state, we’re proud to have gained the support of the North Carolina General Assembly to ultimately pass a law that sets our state ahead with the most up-to-date and current regulations in the nation,” said Thoren.

The Commission also thanked all those that came to the table to lend their outside knowledge and expertise on issues that they’re seeing and needed to be addressed to protect consumers.

“We’re also grateful to have had the help of the American Resort Development Association, the trade association for the timeshare industry, who graciously lent us their knowledge and expertise as we crafted and worked on this legislation,” said Thoren.

Here’s what third parties are saying about the update to the state’s timeshare laws:

“This new law includes language that addresses how the timeshare industry has evolved over the years,” said Robert Clements, Vice President of Regulatory Affairs and General Counsel for the American Resort Development Association (ARDA). “We commend the Commission for putting together a law that can serve as a model for other states looking to update what they have in statute, and we thank the General Assembly and the Governor for their support. We take pride in having been able to help the Commission, and we’re happy to continue to be a resource to them as they implement the law, as well as for any other states looking to modernize their timeshare laws.”

“This is a win for consumers, as this law regulates timeshare exit issues that harm timeshare owners and the industry as a whole,” said Elizabeth Baker, Vice President, State Legislative/Regulatory Official Outreach for the American Resort Development Association-Resort Owners’ Coalition (ARDA-ROC), an organization that represents over 1.6 million timeshare owners. “As we’ve seen time and again, unscrupulous exit companies take advantage of owners looking for exit options, and this is a first-of-its-kind legislation that works to combat that.”

Staff Appearances

Sheryl Graham, Consumer Protection Officer, spoke at the Albemarle Area Association of REALTORS meeting on October 12.

Steve Fussell, Chief Consumer Protection Officer, spoke the ReMax Master Key meeting on October 27.

Disciplinary Actions

FRANK FRANCIN (HIGH POINT) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Francin, effective October 13, 2021. The Commission dismissed without prejudice allegations that Mr. Francin violated provisions of the Real Estate License Law and Commission rules. Mr. Francin neither admitted nor denied misconduct.

FRANKLIN HOME STORE INC (FRANKLIN) – By Consent, the Commission reprimanded Franklin Home Store Inc., effective October 15, 2021. The Commission found that Franklin Home Store Inc. was required under the management agreement to maintain a $250 expense fund on behalf of the property owner and failed to do so. When one tenant vacated a property without leaving a forwarding address, Franklin Home Store Inc. sent the security deposit to that tenant’s relative, instead of holding it for six months as required by N.C. Gen. Stat. 42-52. After a property owner gave notice of termination, Franklin Home Store Inc. failed to timely transfer the tenant’s security deposit to the owner or his new management company. Franklin Home Store Inc. failed to disburse earned management fees from the rental trust account each month, which caused commingling.

MARK HENDEL (WAXHAW) – The Commission accepted the permanent voluntary surrender of the broker license of Mr. Hendel, effective October 13, 2021. The Commission dismissed without prejudice allegations that Mr. Hendel violated provisions of the Real Estate License Law and Commission rules. Mr. Hendel neither admitted nor denied misconduct.

APRIL J MOORE (FRANKLIN) – By Consent, the Commission reprimanded Ms. Moore, effective October 15, 2021. The Commission found that Ms. Moore as the qualifying broker and broker-in-charge was required under the management agreement to maintain a $250 expense fund on behalf of the property owner and failed to do so. When one tenant vacated a property without leaving a forwarding address, Ms. Moore sent the security deposit to that tenant’s relative, instead of holding it for six months as required by N.C. Gen. Stat. 42-52. After a property owner gave notice of termination, Ms. Moore failed to timely transfer the tenant’s security deposit to the owner or his new management company. Ms. Moore failed to disburse earned management fees from the rental trust account each month, which caused commingling.

BRADLEY JAMES O’CONNOR (CORNELIUS) – By Consent, the Commission suspended the broker license of Mr. O’Connor for a period of 12 months, effective October 1, 2021. The Commission then stayed the suspension in its entirety. The Commission found that Mr. O’Connor, was qualifying broker/broker-in-charge of a licensed firm which conducted one day lot liquidation sales in or about June, 2020 and October, 2020. The firm’s advertisements failed to disclose that certain lot types were extremely limited. The firm employed approximately 60 unlicensed sales representatives to conduct the lot sales including showing buyers lots, answering questions, writing offers, and receiving sales commissions. The sales reps did not review the “Working with Real Estate Agents” disclosure with any of the buyers who attended the sale. The firm has taken steps to remedy these issues including limiting unlicensed employee duties.

LAMODREZ POWE (SOUTHERN PINES) – The Commission accepted the voluntary surrender of the broker license of Mr. Powe, for a period of 1 year, effective October 13, 2021. The Commission dismissed without prejudice allegations that Mr. Powe violated provisions of the Real Estate License Law and Commission rules. Mr. Powe neither admitted nor denied misconduct.

ALLISON ELIZABETH SCHOEN (BANNER ELK) – By Consent, the Commission suspended the broker license of Ms. Schoen for a period of 12 months, effective October 1, 2021. The Commission then stayed the suspension in its entirety. The Commission found that Ms. Schoen on behalf of her Firm conducted conducted one day lot liquidation sales in or about June, 2020 and October, 2020. The firm’s advertisements failed to disclose that certain lot types were extremely limited. On or about October 4, 2020, Ms. Schoen scheduled an appointment with a prospective buyer to show lots but failed to review the “Working with Real Estate Agents” disclosure at any time. Ms. Schoen provided brokerage services on behalf of her Firm but failed to affiliate with the Firm until reminded twice by Commission staff.

SKYECROFT REALTY GROUP (WAXHAW) – The Commission accepted the permanent voluntary surrender of the broker license of Skyecroft Realty Group, effective October 13, 2021. The Commission dismissed without prejudice allegations that Skyecroft Realty Group violated provisions of the Real Estate License Law and Commission rules. Skyecroft Realty Group neither admitted nor denied misconduct.

WATERFRONT GROUP PLC LLC (CORNELIUS) – By Consent, the Commission suspended the broker license of Waterfront Group PLC LLC for a period of 12 months, effective October 1, 2021. The Commission then stayed the suspension in its entirety and placed Waterfront Group PLC LLC on probation until October 1, 2022. The Commission found that Waterfront Group PLC LLC conducted one day lot liquidation sales in or about June, 2020 and October, 2020. The firm’s advertisements failed to disclose that certain lot types were extremely limited. Waterfront Group PLC LLC employed approximately 60 unlicensed sales representatives to conduct the lot sales including showing buyers lots, answering questions, writing offers, and receiving sales commissions. The sales reps did not review the “Working with Real Estate Agents” disclosure with any of the buyers who attended the sale. Waterfront Group PLC LLC has taken steps to remedy these issues including limiting unlicensed employee duties.