In the world of real estate, rules governing brokerage practices help keep everything running smoothly. They protect the public, guide professionals, and make sure laws are applied fairly and consistently. But how are these rules made? Let’s break it down.
Who Makes the Rules?
In North Carolina, the Real Estate Commission (REC) is authorized to create rules not inconsistent with State law. These rules are written by the REC and then sent to the North Carolina Rules Review Commission (RRC). The RRC reviews the rules to make sure they are legal, clearly written, and adhere to the rulemaking process. If RRC approves the rules, they are then entered into the North Carolina Administrative Code, Chapter 58.
What’s the Rulemaking Process?
The process of creating or changing a rule is called rulemaking. In North Carolina, the rulemaking process must follow the Administrative Procedure Act’s (APA) strict guidelines.
There are three types of rulemaking:
Temporary and emergency rules are only used in special situations and still must go through the permanent process eventually. That’s why this guide focuses on how permanent rules are made.
Step 1: Identifying the Need
It all starts when the REC sees a need to create a new rule, change an old one, or remove a rule that no longer makes sense. This might happen because of new laws, industry trends, or feedback from brokers or the public.
Step 2: Public Notice
Next, the REC writes a draft of the proposed rule and publishes a notice in the North Carolina Register and on the REC’s website. This notice includes:
This notice also goes out to real estate brokers and industry groups to encourage feedback. You can sign up for email updates on rule notifications by subscribing to REC’s mailing list.
Step 3: Public Comment
There’s a minimum 60-day period where anyone—brokers, consumers, or industry groups—can give feedback in writing or by speaking at a public hearing. The goal is to get input and make sure the rule works well in practice. REC encourages brokers to participate and considers all feedback before making its final decision to adopt the rule and proceed with the rulemaking process.
Step 4: Final Adoption
After reviewing public comments, the REC may make small changes to the rule before the final submission to RRC. If the changes are major, the Commission may ask for more public feedback and open another public comment period. Alternatively, the Commission may decide not to proceed based upon the feedback received. If the Commission chooses to proceed, once the final rule text is ready, the REC must vote to officially adopt the rule.
Step 5: Final Review
The adopted rule is then sent to the RRC to ensurethe rule:
If the rule passes this review, it’s published in the official rulebook (NC Administrative Code) and becomes effective—usually at the beginning of the next month or on a set date, such as July 1.
In Summary
Laws (also called statutes) give the overall direction and are passed by the General Assembly and typically signed by the Governor. Rules fill in the details, so everyone understands how to follow the laws in real-life situations. Rules don’t just appear. They go through a careful process that includes research, public input, legal review, and approval. As a broker, staying informed and involved helps shape the rules that affect your profession every day.