Real estate bulletin

              REAL ESTATE BULLETIN
N o r t h C a r o l i n a R e a l E s t a t e C o m m i s s i o n
V o l u m e 4 3 • M a y 2 0 1 2 • N u m b e r 1
NORTRTH CACARAROROLINANA REREREALAL ESTATATATATE COMMISSION
ESSE QUAUAMAM  I ERI
The annual renewal period begins
May 15, with online access at the Com-mission
Web site,
www.ncrec.gov,
available begin-ning
on that date,
and ending June
30. Your renewal
must be received
by the Commis-sion
(not just
deposited in the
mail) by June 30.
The fee remains $40, one of the lowest
in the nation.
If your renewal is not physically re-ceived
by June 30, your license status will
Watch your mail for that familiar blue and white postcard with the Com-mission
seal! That’s your reminder to renew your North Carolina real estate
license.
automatically be changed from active or
inactive to expired, effective July 1. You
cannot engage in
real estate broker-age
with an ex-pired
license.
Between July
1 and December
31, you may rein-state
your license
by paying a $55
reinstatement fee.
After December
31, a new application, background re-port
and fee are required. You may also
be required to take additional education
“Green building,” permit require-ments,
and summary ejectment proce-dures
will be the primary topics of the
2012-2013 Real Estate Update Course.
“Green building” will explore what is
meant by the term, by whose definition,
how it may be assessed, and its relative
costs and benefits. Related to building
or renovating is the issue of permits and
when they are required. General per-mitting
requirements will be discussed
and then applied to several different fact
situations for licensees to determine if a
permit might be required.
Consistent with the intent to include
content relevant to property manage-ment,
next year’s Update will provide an
overview of the laws governing summary
ejectment and the procedure for evict-lot
of homes are changing hands
on the courthouse steps. Last
year alone, more than
800,000 properties
went through fore-closure
and some ana-lysts
predict the num-ber
may soar to one
million in 2012.
With so many foreclosure properties
available, bargain hunters and investors
are sometimes in fierce competition
with each other. This is good because
the purpose of a foreclosure sale is to
maximize the sales price of a property to
repay the lender and, if there is money
left over, restore as much equity as pos-sible
to the defaulting homeowner.
THIS IS YOUR
NORTH CAROLINA REAL ESTATE LICENSE
RENEWAL NOTICE
North Carolina Real Estate Commission
P. O. Box 17100
Raleigh, NC 27619
NC Real Estate Broker
123 Any Street
Any Town, NC 27282
High foreclosure prices are not, how-ever,
what most investors are looking
for. Some bidders have resorted to illegal
agreements among themselves to keep
foreclosure property prices low. These
can range from elaborate “give or take”
arrangements, where one bidder pays
another for the right to bid free from the
other’s competing bid, to arrangements
in which bidders agree to take turns bid-ding
in successive sales – “I’ll-buy-this-one-
and-you-buy-the-next-one” deals.
Whether or not money changes hands
and whether the agreement is formal or
informal, all such arrangements are felo-nies
under the federal Sherman Anti-
Trust Act, 15 U.S.C.A. §1.
The Sherman Act declares every (See Bid-Rigging, page 6)
(See Update, page 3) (See Renewal, page 3)
By Thomas R. Miller, Former Legal Counsel, Director,
and Special Deputy Attorney General
“contract, combination..., or conspiracy
in restraint of trade or commerce among
the several states….” to be illegal. You
might think that a sale which occurs on
the steps of a county courthouse was so
local a matter that it could not trigger
the statute under the “among the sev-eral
states” language, but that issue was
settled long ago by the courts. Not only
do foreclosure sales often involve the
rights of a lender located in a state other
than the state where the property is lo-cated,
the sale is part of the machinery
of a system of interstate financing and
debt servicing.
Penalties under the law are severe.
Violators may be fined up to $1,000,000
2 Real Estate Bulletin May 2012
To request a speaker from the
Commission, please submit the
“Request for Program Presenter”
form available on the Commission’s
Web site, www.ncrec.gov.
taff
pdate
S
U
REAL ESTATE BULLETIN
Published as a service to real estate licensees to promote
a better understanding of the Real Estate License Law and
Commission rules, and proficiency in real estate practice.
The articles published herein shall not be reprinted or
reproduced in any other publication without specific refer-ence
being made to their original publication in the Com-mission’s
Real Estate Bulletin.
NORTH CAROLINA REAL ESTATE COMMISSION
1313 Navaho Drive
P. O. Box 17100
Raleigh, North Carolina 27619-7100
Phone (919) 875-3700
www.ncrec.gov
Beverly E. Perdue, Governor
COMMISSION MEMBERS
Benjamin Cone III, Chairman Raleigh
Alice L. Mosteller, Vice Chairman Waynesville
L. S. “Cindy” Chandler Charlotte
Everett “Vic” Knight Raleigh
Thomas R. Lawing, Jr. Charlotte
Jeffery J. Malarney Manteo
Jerry A. Mannen, Jr. Wilmington
S. R. Rudd, Jr. Oak Island
M. Rick Watts Fayetteville
Miriam J. Baer
Executive Director
ADMINISTRATION
Mary Frances Whitley Director
Paula L. Ricard Financial Officer
Vickie R. Crouse Technology Administrator
Wendy C. Harper Administrative Officer
Jake A. Gore Network Administrator
Robert L. Forshaw Publications Officer
Brenda Hollings Information Services Officer
AUDITS AND INVESTIGATIONS
Emmet R. Wood Director
Bart H. Allen Sr. Auditor/Investigator
Jennifer K. Boger Sr. Auditor/Investigator
William F. Dowd Sr. Auditor/Investigator
M. Spier Holloman Sr. Auditor/Investigator
Pamela M. Vesper Sr. Auditor/Investigator
Andrew Baker Auditor/Investigator
Amanda H. Hohl Auditor/Investigator
EDUCATION AND LICENSING
Larry A. Outlaw Director
Anita R. Burt Education/Examination Officer
Pamela R. Rorie Continuing Education Officer
Patricia A. Moylan Legal Education Officer
Matthew A. Wentz License Application Analyst
LEGAL
Janet B. Thoren Director, Legal Counsel
Charlene D. Moody Chief Deputy Legal Counsel
S. Adam Stallings Deputy Legal Counsel
Curtis E. Aldendifer Associate Legal Counsel
Michael B. Gray Chief Financial Fraud
Investigator
D. Scott Schiller Financial Fraud Investigator
Stephen L. Fussell Sr. Consumer Protection Officer
Joan H. Floyd Sr. Consumer Protection Officer
Jean A. Wolinski-Hobbs Consumer Protection Officer
Peter B. Myers Information Officer
Elizabeth W. Penney Information Officer
Glenn M. Wylie Information Officer
Editor-In-Chief
Miriam J. Baer
Editor
Robert L. Forshaw
Janet B. Thoren has been named
Director, Legal Coun-sel,
of the Commis-sion’s
Legal Division.
She joined the Le-gal
Division in 1997
and for a brief period
served as Director of Legal Resources
for the Association of Real Estate Li-cense
Law Officials (ARELLO). She is
also designated by the U.S. Justice De-partment
as a Special Assistant United
States Attorney for the Western District
of North Carolina.
Sarah E. Harding, has been em-ployed
as Legal Case
Management Spe-cialist
in the Legal
Division. She holds
an Associate of Ap-plied
Science in Para-legal
Studies and has been in the legal
field since 2007.
Web Site Bulletin Archives Expanded
Every edition of the Real Estate Bulletin since its inception in the
spring of 1970 is now available in searchable PDF format on the Com-mission’s
Web site, www.ncrec.gov. To access the archives, open
the Commission’s Home page, click on “Publications/Bulletins” and
then on “Bulletins.” The files are divided into two sections - those pub-lished
in the last five years (current) and those published previously
(archives). The Bulletins and other files on the Web site can also be
searched using the general “Search” function at the top of the Home
page; this search method will yield links to current Bulletins only. Or,
click on the link to “Search the Current Bulletins” or “Search the Bul-letin
Archive” in the Bulletin archive section of the Web site.
REAL ESTATE BULLETIN
N o r t h C a r o l i n a R e a l E s t a t e C o m m i s s i o n
V o l u m e 4 3 • M a y 2 0 1 2 • N u m b e r 1
NORTRTH CACARAROROLINANA REREREALAL ESTATATATATE COMMISSION
ESSEQUAUAMAM  I ERI
Janet Thoren, Director, Legal
Counsel, of the Legal Division, spoke to
the Wake County Real Property Law-yers
Association.
Charlene D. Moody, Deputy Chief
Legal Counsel, spoke to the High Point
Regional Association of REALTORS®.
Peter B. Myers, Information Offi-cer,
spoke at the Greenville Area Prop-erty
Managers Associations’ Security
Deposit Seminar.
Betsy Penney, Information Officer,
spoke to the Burlington Alamance As-sociation
of REALTORS®.
Glenn M. Wylie, Information Of-ficer,
spoke at the Annual Broker-in-
Charge Meeting of the Highland-Ca-shiers
Board of REALTORS® and to
the Jacksonville Board of REALTORS®.
Real Estate Bulletin May 2012 3
June 13
July 11
August 8
September 5
October 10
All meetings, unless otherwise noted, begin at 9
a.m. and are held in Raleigh in the Commission’s
Conference Room at 1313 Navaho Drive
(27609). Occasionally, circumstances necessitate
C alendar changes in meeting times and locations.
C ommission
or pass the license examination in order
to reinstate.
Keep in mind that this year, June 30
falls on a Saturday. The Commission of-fice
will be closed on that date. We will,
however, pick up mail at the post office
and any renewals from that collection
will be considered as having been re-ceived
by the deadline.
When you renew online - by far, the
fastest, most efficient method - log in
with your license number and personal
identification number (PIN). The last
four digits of your Social Security num-ber
will be your PIN unless you have
changed it.
A confirmation screen appears when
you have completed your renewal cor-rectly
online. Print it for your records.
While online, check your Commission
record to update your fax, email and
residence addresses, if needed.
You may renew prior to complet-ing
your continuing education require-ments,
however, brokers on active status
must complete eight hours of continu-ing
education, including the four-hour
Update Course. If you are a broker-in-charge,
you must also take the four-hour
BICAR Course, which will serve
as your elective. Keep in mind that
your continuing education credits for
recently completed education may not
be reflected in your online record or on
the address label of this Bulletin which is
prepared as much as two or more weeks
in advance of your receipt in the mail.
If you have not completed your
continuing education, you must do so
by June 10. There are no continuing
education classes between June 11 and
30. Brokers-in-charge should be certain
that any agents under their supervision
have completed their continuing educa-tion
and renewed their licenses.
(Continued from page one)
(Continued from page one)
ing tenants from and lawfully regaining
possession of residential rental proper-ties.
These laws apply to all residential
landlords and thus include brokers who
either manage residential property for
others or who own their own residential
rental property. If pending legislation
revising residential landlord-tenant law
passes before September, then coverage
of important aspects of that legislation
will be included.
The Update Course will also touch
briefly upon the following subjects:
changes in Real Estate License Law and/
or Commission rules impacting licens-ees,
including the revised Residential
Property Disclosure Statement, an alert
about bid-rigging in foreclosure sales
and recent real estate scams, and a dis-cussion
about a licensee’s duty of confi-dentiality
to his/her principal.
2012-13 BICAR Course
Next year’s BICAR Course will feature
a review of selected Commission disci-plinary
cases and address selected admin-istrative
and supervisory matters related
to a broker-in-charge’s responsibilities, in-cluding
various record retention require-ments
imposed by Real Estate License
Law and rules as well as those of the In-ternal
Revenue Service, the Department
of Labor or other governmental agencies
regarding what documents must be kep,
in what forms, and how long. A related
topic will cover issues arising from “inde-pendent
contractor” status including tax,
civil liability, and agency law perspectives,
as well as worker compensation matters.
Problem areas BICs encounter in su-pervising
both their associated agents and
the content of actual advertising will be
discussed including examples from adver-tisements.
Broker-in-Charge and
Basic Trust Account Procedures Courses
Please see the Commission Web site, www.ncrec.gov, under Course Registration,
for locations, dates, and times from July thru December, 2012.
Broker-in-Charge Course: Two-days. Day one, 1-5 p.m.; Day two, 8:30-5:30 p.m.
4 Real Estate Bulletin May 2012
f you find your real estate practice
expanding into the management
and marketing of
rental properties
and the securing
of tenants for your
owner clients, you
should make it a
point to refresh
your knowledge of Fair Housing law.
Tenant rights and leasing and rental
agreements are key areas of federal and
state Fair Housing laws and an under-standing
of how the law treats them will
enable you to provide your clients with
appropriate counsel and to steer clear of
possible legal issues.
The original Fair Housing Act (Title
VIII of the Civil Rights Act of 1968) and
the Federal Fair Housing Amendments
Act of 1988, together, prohibit discrimi-nation
in the sale, rental or advertising
of a dwelling on the basis of race, color,
religion, sex, national origin, familial
status (such as the presence of children
under 18 years old and pregnant wom-en),
or handicapping conditions. The
North Carolina Legislature enacted the
State Fair Housing Act, found in Chap-ter
41A of the General Statutes, which
conforms to federal law. It empowers the
North Carolina Human Relations Com-mission
to enforce the laws.
Take note that under these laws,
whether you are involved with a sale or
a rental, it is unlawful to take any ac-tion
which results in discrimination or
to allow others to act in such a manner.
Examples include:
• Refusing to rent or sell housing;
• Refusing to receive or transmit a
bona fide offer to engage in a real
estate transaction;
• Making housing unavailable;
• Denying a dwelling;
• Setting different terms, condi-tions
or privileges for the sale or
rental of a dwelling;
• Providing different housing ser-vices
or facilities;
• Falsely denying that housing is
available for inspection, sale, or
rental;
• For profit, persuading owners to
sell or rent (blockbusting); or
• Denying anyone access to or
membership in a facility or ser-vice
(such as a multiple listing
service) related to the sale or
rental of housing.
If you discover that the property
owner, tenant, seller, or buyer that you
represent intends to discriminate based
on any of the protected classes, you
must immediately consider terminating
your agency agreement with that party
or risk violating the law and losing your
license. Intent has no impact on wheth-er
the broker is subject to penalty un-der
the Fair Housing Act; the Human
Relations Commission has sought civil
damages and penalties against individu-als
whose conduct or statements merely
implied or tended to suggest discrimi-natory
intent.
Managing rental properties involves
the accommodation of needs resulting
from physical or mental disabilities.
People with hearing, mobility and vi-sual
impairments, chronic alcoholism,
chronic mental illness, AIDS, and men-tal
retardation, disabilities that limit
one or more major life activities, are
protected under both state and federal
statutes. Thus, it may be necessary for
the property owner to modify a dwell-ing
at the disabled person’s expense or
allow a disabled tenant to do so.
Modifications to accommodate ten-ant
disabilities within a dwelling may
require the tenant to restore the unit to
the original condition if the modifica-tions
interfere with the landlord’s or fu-ture
tenants’ use of the premises. Exter-nal
changes, however, such as a wheel-chair
ramp leading up to an entrance,
are precluded from restoration when the
lease or rental terminates.
It is unlawful to refuse to make rea-sonable
accommodations in rules, poli-cies,
practices or services if necessary for
the disabled person to use the housing.
Below are a few important examples of
necessary accommodations you may
need to tell a landlord:
• A building with a no-pet policy
must allow a visually impaired
tenant to keep a guide dog. A
therapy animal must be allowed
to reside with a tenant who pro-duces
evidence of a prescription
or note from their doctor or
therapist regarding their need for
the animal.
• An apartment complex that of-fers
tenants ample, unassigned
parking must honor a request
from a mobility-impaired tenant
for a reserved space near the ten-ant’s
apartment, if necessary, to
ensure access.
Familial status is another protected
class under the housing laws. Unless
a community qualifies as housing for
older persons, it may not discriminate
based on familial status. This means you
cannot discriminate against families in
which one or more children under the
age of 18 live with:
• A parent;
• A person who has legal custody
of the child or children; or
• The designee of the parent or le-gal
custodian, with the parent or
custodian's written permission.
Familial status protection also ap-plies
to pregnant women and anyone
securing legal custody of a child under
18. An apartment complex violates the
law if it attempts to segregate families
with children to a certain building or
area in the complex.
Foreclosures and Tenant Termination
Rights
The law in North Carolina allows
tenants residing in a property, containing
less than 15 rental units and being sold
in a foreclosure proceeding, to terminate
the lease and move out without penalty
or breach of the lease. The only require-ment
under this law, found in N.C.G.S.
§42-45.2, is that the tenant must set the
termination date at least 10 days or more
after the date the notice of sale is filed
with the Clerk of Superior Court.
By S. Adam Stallings, Deputy Legal Counsel
Real Estate Bulletin May 2012 5
With foreclosures, tenants may not
want to move out immediately after a
foreclosure sale. Given the volume of
foreclosures in recent years, a federal
law known as the Protecting Tenants at
Foreclosure Act of 2009 was enacted,
which allows some residential leases
to survive a foreclosure. Thus, tenants
have the option to remain in their home
until the end of their current lease and
month-to-month tenants are entitled to
a 90-day notice before having to move
out. However, in cases where the buyer
of the foreclosed property intends to
live in the property instead of buying it
as an investment or rental property, the
law allows the buyer to terminate any
remaining lease term, but still affords
the tenant a 90-day notice to vacate the
home.
Without a doubt, one or more of the
laws discussed above will govern many
of the real estate transactions every
broker encounters. Having knowledge
of these laws and ensuring that others
understand their rights and obligations
under these statutes will help protect
consumers and make you a better real
estate broker. Should you have any
questions or concerns about a real estate
transaction that concerns fair housing
laws, the North Carolina Human Re-lations
Commission may be reached at
(919) 807-4420 or toll free at 1-866-
324-7474.
Aside from the Acts and statutes
cited earlier, two excellent sources
of information and discussion of
the Fair Housing law are:
North Carolina Real Estate
Manual (see order form in this is-sue
of the Bulletin)
Commission brochure: Ques-tions
and Answers on: Fair Housing
Seven staff members of the Real Estate Commission received awards recently for a total
of 100 years of service. Shown with Commission Chairperson Benjamin Cone III (far left)
and Vice Chairperson Alice Mosteller (far right) are (l. to r.) April M. Conyers, Informa-tion
Specialist, five years; Amber E. Cloutier, Information Specialist, five years; Emmet R.
Wood, Director, Audits and Investigations, 30 years; Jennifer K. Boger, Senior Auditor/
Investigator, 20 years; Karissa B. Sluss, Paralegal, five years; and Stephen L. Fussell, Senior
Consumer Protection Officer, 20 years. Not shown is Faye E. Ray, Receptionist, 15 years.
By Stephen L. Fussell, Senior Consumer Protection Officer
any firms are encouraging or even requiring full broker associates to
work from their homes in order to reduce the expense of corporate
office space. In addition, more brokers than ever before are choosing to work
at home because of the convenience of doing so. For these reasons, the
Commission wants brokers and brokers-in-charge to be aware of certain limi-tations
and responsibilities.
A broker on provisional status is required to work under the active supervi-sion
of a (BIC) and, therefore, must conduct most business from the BIC’s of-fice.
The amount of time that can be spent working at home is largely restricted.
If a provisional broker is working excessively at home, the BIC and the broker
are not satisfying the requirements of the Commission’s rule.
Any BIC with one or more provisional brokers as associates must provide
work space to satisfy the supervisory requirement. While provisional brokers
may make occasional telephone calls from their homes and the like, most of
their activities must be performed in the offices of their BIC’s.
Full brokers who are associated with a firm may work from home as much
as they desire provided that they deliver to their BIC’s any agency agreements,
transaction documents and trust monies in a timely manner.
As a practical matter, a full broker must visit or at least communicate with
the corporate office regularly to attend to firm-related matters and to receive
mail, especially that from the Commission which is sent to a broker’s business
address of record. If the Commission sends a Letter of Inquiry, a communica-tion
often arising from a complaint, a response is required within fourteen (14)
days of receipt.
Among the attractions of real estate brokerage have been the opportuni-ties
for brokers to control their work schedules and to choose their work loca-tions.
At the same time, brokers and BIC’s need to be aware of and adhere to
these guiding rules and practices relating to working from home.
6 Real Estate Bulletin May 2012
An Article by the Surveying Committee of the NC Board of
Examiners for Engineers and Surveyors
nowledge of survey plats is essential to your real es-tate
practice. Prepared by Professional Land Sur-veyors
(PLS) in North Carolina, survey plats are visual re-cords
of properties at the time the surveys were performed.
Whether you list a property or research one for a prospective buyer, you
should caution your client to be certain that any existing plat prepared by a sur-veyor
in the past is a true description of the property in the present.
The accuracy of any survey plat, as a snapshot in time, is only assured by
the licensed surveyor on the date of performance of the survey. At any time,
afterward, changes can occur, including, but not limited to:
• Alteration of property corners
• Encroachment of buildings or fences or other structures
• New easements
• Violations of current zoning laws
• Revised buffer and flood zones
• Sale of part of the property
• Reshaping of impervious surface area
Relying on plats that do not reflect changes occurring since the last survey
has the potential to harm the purchaser of the property and the public. Histori-cal
survey plats, especially, are more likely not to provide the purchaser with
the current accuracy of the boundaries or of any potential liabilities that may
have evolved over time.
A map of survey must meet the North Carolina Board of Examiners for
Engineers and Surveyors Board Rules, specifically 21 NCAC 56.1604 (Office
of Administrative Hearings, www.ncoah.com/rules) and, if the plat is going to
be recorded in a county Register of Deeds office in a plat book, North Carolina
General Statute 47-30 (North Carolina General Assembly, www.ncleg.net).
The Board Rules and Statutes, including GS 47-30, are available from the
Board’s Web site at www.ncbels.org.
Survey plats can be prepared on three map sizes, 18” x 24”, 21” x 30”, and
24” x 36”. At a minimum, each county Register of Deeds must accept the 18”
x 24” size. Plats prepared to meet board rules do not have a size requirement,
but the size of a map must permit all details to be legible on a copy. If a plat is
going to be recorded as an attachment to a deed, the size requirement is no
larger than 8½” x 14”.
A sample GS 47-30 plat can be found at www.ncbels.org/forms/Sample_
PLAT.pdf.
For any questions or help when ordering or using surveys please contact
the Board of Examiners for Engineers and Surveyors at (919) 791-2000 or visit
the Web site at www.ncbels.org.
and sentenced up to ten years in prison.
If the violator is a corporation, the max-imum
fine is $100,000,000.
In one case that reached the United
States Court of Appeals for the Fourth
Circuit (the circuit that includes North
Carolina), a handful of real estate spec-ulators
participated in a conspiracy
to hold down the price of properties
sold at foreclosure auctions by agree-ing
not to bid against each other. The
court characterized the activity as “bid-rigging.”
The speculators agreed among
themselves that only one of the group
would bid on and purchase a foreclo-sure
property. Afterwards, the group
would meet and hold another entirely
private auction amongst themselves.
The high bidder would be awarded the
property and the profit from the pri-vate
sale was shared out among all the
members of the group. The conspirators
were careful to keep their arrangements
informal so as to leave no paper trail. In
all, the group members purchased about
ten properties.
In spite of their precautions, the con-spiracy
was discovered and members of
the group were charged and convicted of
Sherman Act violations. United States v.
Romer, 148 F.3d 359 (4th Cir. 1998).
Attorneys from the Antitrust Divi-sion
of the United States Attorney’s
Office in Atlanta have advised the Real
Estate Commission that incidents of
bid-rigging in foreclosure sales are on
the rise across the country. With the
increase in bid-rigging has come a new
emphasis on enforcement and prosecu-tion.
In just the last few months, federal
authorities have pursued dozens of cases
from coast to coast. A probe in northern
California has netted at least 20 inves-tors
in bid-rigging schemes. Similar in-vestigations
have resulted in guilty pleas
and convictions in Alabama, New Jer-sey,
and even North Carolina.
The FBI and U.S. Attorney’s Office
aren’t the only agencies on the lookout
for foreclosure bid-rigging conspiracies.
The Consumer Protection Division of
the North Carolina Attorney General’s
Office has also broken up a couple of
schemes, requiring the bidders to pay
more than $800,000 in civil damages.
North Carolina real estate brokers
should take care to steer clear of any
sort of anti-competitive arrangements
between bidders in foreclosure sales.
Not only do such arrangements prevent
owners and lenders from getting a fair
price, they are criminal felonies. With
penalties approaching $1,000,000 in
fines and up to ten years in prison, a
broker who participates in or facilitates
a conspiracy to restrain competitive bid-ding
in a foreclosure sale will have much
more to worry about than the revoca-tion
of his or her broker license.
(Continued from page 1)
Real Estate Bulletin May 2012 7
By Pamela R. Rorie, Continuing Education Officer
n enthusiastic crowd of real es-tate
instructors, school officials
and publisher representatives attended
the 2012 Real
Estate Educators
Conference held
in Raleigh on
February 6 and
7. The Commis-sion-
sponsored
meeting drew 175
participants from
across the state
for this year’s
event.
Anita Burt,
Education and
Examination Of-ficer,
opened the
conference with
an overview of the new, two-part real
estate license examination and led a dis-cussion
of the exam “problem topics.”
Education and Licensing Director
Larry Outlaw reviewed with instructors
the recently updated prelicense course
syllabus and commented on various ex-amination
topics with suggestions for
preparing students.
The North Carolina Real Estate Edu-cators
Association (NCREEA) held its
spring meeting, officiated by President
Dana Rhodes. Immediate Past President
Jo-Ann C. Lavecchia presented the asso-ciation’s
“Program of the Year” award to
Jo Mangum for her continuing education
elective course, Strategic Pricing Specialist,
and its “Educa-tor
of the Year”
award to George
Bell, DREI. Nan-cy
Keck and J. Y.
Monk, long-time
instructors and
school directors,
were present-ed
“Emeritus”
awards in recog-nition
of their
many years of
service to real es-tate
education in
North Carolina.
Bell was also
recipient of the Commission’s Billie J.
Mercer Excellence in Education Award,
presented by Commission Chairperson
Benjamin Cone III. This award is pre-sented
annually in memory of former
Commission member and chairper-son,
Billie Mercer, who was especially
dedicated to real estate education. The
names of all award winners are engraved
on the Mercer Award cup. It is displayed
in the Commission’s lobby. Commis-sion
Vice Chairman Alice Mosteller,
and members Everett “Vic” Knight and
S. R. “Buddy” Rudd, Jr. also attended
the award presentation.
Concluding the
NCREEA Awards
presentation, instruc-tor
Bill Gallagher pre-sided
over a “roast” of
Thomas R. Miller, re-tiring
Commission Le-gal
Counsel, Director,
and Special Deputy
Attorney General, who
completed 30 years of
service March 1.
The first-day after-noon
session featured
Len Elder, CEO and
Course Archi-tect
of Course
Creators, who
discussed teach-ing
the “new”
examination
topics with spe-cific
emphasis
on the govern-ment
survey
system and ba-sic
real estate
investment calculations, and Lawrence
J. Fabrey, PhD, Senior Vice President of
Psychometrics, Applied Measurements
Professionals, Inc. (“AMP”), who pro-vided
an introduction to AMP as the new
examination provider and an overview of
the candidate experience.
Dr. Fabrey opened the second day’s
sessions with a summary of the new ex-amination.
Patricia Moylan, Commis-sion
Legal Education Officer, discussed
with participants their experiences in
teaching this year’s Update and BICAR
courses and outlined the proposed top-ics
for the 2012-2013 Update course.
Lisa McQuillen, Education and Licens-ing
Officer, reminded instructors and
private school directors about upcoming
renewals, and recognized prelicensing
schools and instructors whose students
had achieved outstanding performance
on the license examination.
Ellie D. Edwards, Director of Pro-fessional
Development for the North
Carolina Association of REALTORS®,
explained to instructors the procedures
for both attaining various REALTOR®
designations and for obtaining approval
to instruct designation courses. Con-tinuing
Education Officer Pamela Rorie
discussed current continuing education
issues and reminded instructors and CE
sponsors of upcoming renewal deadlines.
The conference concluded with the
annual “Miscellaneous Legal Issues and
Open Forum” session led by Commis-sion
Legal Counsel Miller.
The Commission thanks North
Carolina’s real estate educators for their
continued interest and support, and
congratulates George Bell, Jo Mangum,
Nancy Keck, and J. Y. Monk for their
achievements.
Commission Chairman Benjamin Cone III,
left, presents the Billie J. Mercer “Educator of
the Year” Award to George Bell.
Retired Commission Legal Counsel Tom Miller during
“roast” with Executive Director Miriam Baer (right) and Le-gal
Counsel Janet Thoren.
Len Elder
8 Real Estate Bulletin May 2012
How To Order:
Online: www.ncrec.gov
Mail: NC Real Estate Commission, ATTN: Publications,
P. O. Box 17100, Raleigh, NC 27619-7100
Fax: 1-919-877-4227
Use this form only for
free publications.
Free Publications Quantity
Questions and Answers on:
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Tenant Security Deposits
Condos and Townhouses
Residential Subdivisions and Planned
Communities
Purchasing Coastal Real Estate
in North Carolina
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Trato Con Agentes de Bienes Raíces
(Working With Real Estate Agents)
Preguntas y Respuestas sobre:
(Questions and Answers On:)
Vivienda Justa (Fair Housing)
El Depósito de Seguridad del
Inquilino (Tenant Security Deposits)
Alquiler de Inmuebles para
Viviendo (Renting Residential Real Estate)
Real Estate Licensing in North Carolina
(Contains license application)
Residential Property Disclosure
Statement (Available online)
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Use this form only for
purchasing publications.
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Real Estate Bulletin May 2012 9
2011-2012 Edition
NORTH CAROLINA REAL ESTATE MANUAL
  e North Carolina Real Estate Manual, published by the Real Estate Commission, is a
comprehensive reference addressing real estate law and brokerage practice, the North Carolina
Real Estate License Law and Commission rules. It serves as the authorized textbook for the
real estate broker postlicensing courses and is highly recommended for licensees, attorneys,
instructors and anyone else engaged or interested in real estate law and brokerage practice.
  e 992-page, 2011-2012 edition includes coverage of the revised HUD-1 Settlement
Statement and O  er to Purchase and Contract form, a new chapter on Brokerage Compensa-tion
Issues, and updated   nancing legislation and practices.
  e   les on the Web site and on disk are “READ ONLY” and may not be printed or changed.
MAILING ADDRESS:
North Carolina Real Estate Manual
P. O. BOX 28151
RALEIGH, NC 27611
EMAIL:
manual@cesmail.com
FAX:
1-866-867-3746
CUSTOMER SERVICE:
1-866-833-5785
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NORTH CAROLINA REAL ESTATE MANUAL
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QUANTITY ITEM PRICE* TOTAL
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Manual on CD-ROM $20.00* $___________
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(Access free up to 5x; register on Web site) $20.00* $___________
*All prices include taxes, shipping and handling.
Hetrick
Outlaw
Moylan
2011-
2012
Edition
ISBN 978-0-
9704907-5-9
North Carolina
Real Estate Manual
Also
available in
digital form:
  e Real Estate Manual on
CD-ROM provides digital,
searchable   les in Portable Doc-ument
File format (PDF) which can be read
by free Acrobat Readers across all platforms.
Online subscriptions
permit online access to
the Manual and expire
upon publication of a new edition projected
for late 2012. (Users of older computers may
prefer the CD-ROM for faster load times).
CD-ROM ONLINE
SUBSCRIPTION
TO ORDER: Online at the Commision’s Web site, by mail, or fax. Credit cards accepted are MasterCard and Visa.
Shipping Address (NOT P.O. BOX)
Free access to Manual on Web site up to 5X. Register on Web site.
Please allow 7 days from receipt of payment for delivery.
North Carolina
Real Estate Manual
2011-2012 Edition
©2011 North Carolina
Real Estate Commission
ISBN 978-0-9704907-6-6
North Carolina
Real Estate Commission
P. O. Box 17100
Raleigh, NC 27619-7100
www.ncrec.gov
Exp Date Security Code
(3-digit code on
reverse side of card)
MasterCard/Visa Billing Address (if different from Shipping Address)
10 Real Estate Bulletin May 2012
Penalties for violations of the Real Estate License Law and Commission
rules vary depending upon the particular facts and circumstances
present in each case. Due to space limitations in the Bulletin, a complete
description of such facts cannot be reported in the following Disciplinary
Action summaries.
D isciplinary
A ction
TERRI B. ALLEN (Shallotte) – By
Consent, the Commission suspended
the broker license of Ms. Allen for a pe-riod
of 18 months effective November
1, 2011. Four months of the suspension
were active with the remainder stayed
for a probationary period of one year
beginning March 1, 2012. The Com-mission
found that during 2008 Ms.
Allen listed a house and lot for $39,900,
submitted an offer to purchase for
$35,000 to her seller client on behalf of
an entity she owned and controlled, but
failed to submit an offer from a compet-ing
purchaser for $44,000 and failed to
disclose her interest in the buyer entity.
The Commission also found that dur-ing
2009, Ms. Allen listed a condomin-ium
and submitted an offer to purchase
from a buyer client without informing
her seller client of another firm’s interest
in making an offer and did not give the
competing purchaser an opportunity to
make an offer on the property as Ms.
Allen promised.
ARNOLD G. ANDERSON (Mar-ion)
– By Consent, the Commission
suspended the broker license of Mr.
Anderson for a period of one year effec-tive
August 1, 2011. The Commission
found that Mr. Anderson’s certification
as a residential appraiser by the North
Carolina Appraisal Board was suspend-ed
by the Board for a period of five years
effective January 1, 2010, with a stay al-lowed
as of July 1, 2011, if Mr. Ander-son
completed certain conditions.
ASHEVILLE 4 SEASONS LLC
(Asheville) - By Consent, the Commis-sion
reprimanded Asheville 4 Seasons
effective March 1, 2012. The Com-mission
found that Asheville 4 Seasons
listed an unimproved lot and repre-sented
in the MLS system that a manu-factured
home could be placed on the
lot, but failed to change the representa-tion
when shortly after listing the lot, a
county-wide zoning ordinance was ad-opted
which prohibited manufactured
housing on the lot. The Commission
also found that Asheville 4 Seasons act-ed
as dual agent for the sale of the prop-erty
and again represented to the buyer
that a mobile home could be put on the
lot; the buyer learned of the restrictions
on the lot after closing. The Commis-sion
noted that Asheville 4 Seasons re-funded
its commission to the buyer and
has agreed to list the subject lot for the
buyer at no charge.
BEACH VACATION PROPER-TIES,
INC. (Atlantic Beach) - The
Commission accepted the voluntary
surrender of the firm license of Beach
Vacation Properties for a period of one
year effective February 13, 2012. The
Commission dismissed without preju-dice
allegations that Beach Vacation
Properties violated provisions of the
Real Estate License Law and Commis-sion
rules. Beach Vacation Properties
neither admitted nor denied miscon-duct.
JEFFREY S. BEISER (Charlotte)
– By Consent, the Commission repri-manded
Mr. Beiser effective March, 1,
2012. The Commission found that Mr.
Beiser, qualifying broker and broker-in-charge
of a licensed real estate broker-age
firm, acted as property manager for
a landlord-client and disbursed rental
proceeds before verifying that the rent
checks had cleared, causing the pro-ceeds
checks to be returned for insuf-ficient
funds. The Commission noted
that Mr. Beiser has ceased doing prop-erty
management, allowed his firm’s li-cense
to expire on June 30, 2011, and
transferred his management contracts
to another licensed broker and delivered
all information and security deposits in
a timely manner.
WILLIAM R. BREEN, JR. (Ruth-erfordton)
– The Commission revoked
the broker license of Mr. Breen effec-tive
February 23, 2012. The Commis-sion
found that Mr. Breen entered into
a contract with a buyer for the purchase
of a lot owned by Mr. Breen and his wife
and, when the contract expired due to
an unresolved boundary dispute, failed
to return $20,000 in earnest money to a
buyer. The Commission also found that
Mr. Breen borrowed $50,000 against
the vacant lot, but failed to make pay-ments
on the note and the property
was later sold at foreclosure. Finally,
the Commission found that Mr. Breen
made misrepresentations to a District
Court Judge of North Carolina and
failed to respond appropriately and
timely to written Letters of Inquiry
from the Commission.
BONNIE F. BURHANS (Mars
Hills) – By Consent, the Commission
suspended the broker license of Ms.
Write
License
Your
Number
On All
Contracts
Disclosures
and
(See Disciplinary, page 11)
Real Estate Bulletin May 2012 11
Burhans for a period of one year effec-tive
April 1, 2012. The Commission
then stayed the suspension for a proba-tionary
period of one year ending April
1, 2013. The Commission found that
Ms. Burhans, acting as qualifying bro-ker
and broker-in-charge of a real estate
firm until March 2009 when she closed
the firm and cancelled its license, hired
but failed to supervise an unlicensed
bookkeeper, allowing the bookkeeper
to embezzle trust money, and failed
to review or reconcile trust records.
The Commission also found that Ms.
Burhans opened a new real estate bro-kerage
firm in October 2009 under the
same name as her previous firm and per-formed
only buyer agency services, but
failed to execute a written buyer agree-ment
in one of two transactions.
KAREN CAMPBELL (Raleigh) –
The Commission accepted the volun-tary
surrender of the broker license of
Ms. Campbell for a period of three years
effective April 5, 2012. The Commis-sion
dismissed without prejudice allega-tions
that Ms. Campbell violated pro-visions
of the Real Estate License Law
and Commission rules. Ms. Campbell
denied any misconduct.
JERRY CAMPBELL (Raleigh) –
The Commission accepted the volun-tary
surrender of the broker license of
Mr. Campbell for a period of three years
effective April 5, 2012. The Commis-sion
dismissed without prejudice allega-tions
that Mr. Campbell violated pro-visions
of the Real Estate License Law
and Commission rules. Mr. Campbell
denied any misconduct.
CAROLINA PROPERTY ASSO-CIATES
(Holly Springs) – By Consent,
the Commission suspended the firm
license of Carolina Property Associates
for a period of one year effective March
1, 2011. The Commission found that
Carolina Property Associates, a real es-tate
brokerage and property manage-ment
firm, charged unauthorized fees
to home purchasers subject to the re-gimes
of their association clients. The
Commission also found that Carolina
Property Associates failed to maintain
homeowner association money in an
exclusive trust account designated with
the words “trust” or “escrow”, and failed
to keep accurate and complete records
of the monies they held for their land-lord
clients and their tenants. Finally,
the Commission found that Carolina
Property Associates, acting as a broker
for homebuyers and sellers and as trust-ee
for earnest money deposits, failed to
keep accurate and complete records of
clients’ monies in its care and failed to
accurately and promptly account for the
funds of others in its custody.
RODNEY CAVERLY (Mint Hill)
- The Commission accepted the perma-nent
voluntary surrender of the broker
license of Mr. Caverly effective February
13, 2012. The Commission dismissed
without prejudice allegations that Mr.
Caverly violated provisions of the Real
Estate License Law and Commission
rules. Mr. Caverly neither admitted nor
denied misconduct.
RICHARD D’ANJOLELL (Oak
Island) - By Consent, the Commis-sion
reprimanded Mr. D’Anjolell ef-fective
May 1, 2012. The Commission
found that Mr. D’Anjolell engaged
Mr. D’Anjolell’s employing brokerage
firm to manage a vacation rental prop-erty
owned by a family member. The
lender foreclosed on the property. Mr.
D’Anjolell knew about the foreclosure
but failed to inform his employer in a
timely manner about the foreclosure,
which resulted the family member col-lecting
advanced rents on the property
and Mr. D’Anjolell’s employing broker
continuing to offer the property to ten-ants
after ownership changed hands.
DICK PATTON REALTY CO.,
INC. (Durham) - By Consent, the
Commission revoked the broker li-cense
of Dick Patton Realty Co. effec-tive
March 15, 2012. The Commission
found that Dick Patton Realty Co., a
property management firm, failed to
maintain its trust account records in
compliance with the Real Estate License
Law and Commission rules and the li-abilities
exceeded the funds on hand by
approximately $87,000. The Commis-sion
noted that Dick Patton Realty Co.
has fully funded the trust accounts.
DIRECTED ENDEAVORS, INC.
(Hillsborough) – By Consent, the Com-mission
reprimanded Directed Endeav-ors
effective April 1, 2012. The Com-mission
found that Directed Endeavors,
a property management firm, failed to
properly maintain trust account records
as required by Commission rules in that
check images did not show both sides
of the checks, deposit tickets did not
document the applicable tenant and the
purpose of the funds, and rental trust
account checks were not designated as
trust account checks. The Commission
also found that Directed Endeavors op-erated
its tenant security deposit account
on a shortage of $33,580. The Commis-sion
noted that the firm placed funds in
the account to cover the shortage.
DAVID B. DOWNING (Kitty
Hawk) – By Consent, the Commis-sion
suspended the broker license of
Licensees Must
Report Convictions
Commission Rule A.0113
requires any licensee who is
convicted of a misdemeanor or
felony or who has disciplinary
action taken against him or her
by any occupational licensing
board to file a report with the
Real Estate Commission.
The reporting requirement
includes convictions for driving
while impaired (“DWI”). The
report must be filed within sixty
(60) days of the final judgment
or board action.
If you have questions about
this rule, please call the Commis-sion’s
Legal Division at 919-875-
3700 for more information.
(See Disciplinary, page 13)
Disciplinary Action
(Continued from page 10)
12 Real Estate Bulletin May 2012
Mr. Downing for a period of twenty-four
months effective December 15,
2011. Two months of the suspension
were active with the remainder stayed
for a probationary period of twenty-four
months. The Commission found
that Mr. Downing, acting as broker-in-
charge of a real estate brokerage firm
and rental agent for rental properties,
deducted monies from the security de-posits
of successive tenants in the same
property for damages for which they
were not responsible or which did not
exist and charged tenants for repairs
which were not made or which did not
cost as much as the money deducted
from the tenants’ deposits. The Com-mission
also found that Mr. Downing
failed to maintain complete records of
rental transactions and could not in ev-ery
instance produce receipts or other
documents to account for deductions
made from tenant security deposits.
BEATRICE HOKE FAIR (Mat-thews)
– By Consent, the revoked the
broker license of Ms. Fair effective April
5, 2012. The Commission found that
Ms. Fair, in 2007 and 2008, sold two
properties to the same buyer and in-flated
the purchase price of the proper-ties
to hide kickbacks to the buyer and
that two large payments represented on
the closing statement as payoffs were in
fact false and were actually made to pro-vide
down payments for the buyer. The
Commission also found that another
payment was misrepresented as being
to a construction company, which was
actually set up to receive the funds, all
without the lenders’ knowledge.
LONNIE W. GLASPIE, JR. (Clin-ton)
– By Consent, the Commission
suspended the broker license of Mr.
Glaspie for a period of one year effective
April 1, 2012. The Commission then
stayed the suspension for a probationary
period of one year through March 31,
2013. The Commission found that Mr.
Glaspie represented a buyer and seller as
a dual agent in a transaction in which a
tenant purchased the home he had been
renting and failed to enter into a writ-ten
agency agreement with either the
buyer or the sellers. The Commission
also found that although Mr. Glaspie
acted as a dual agent in the transaction,
he failed to obtain the written permis-sion
of the buyer or sellers to represent
them both in the transaction. Finally,
the Commission found that Mr. Glasp-ie
failed to advise the sellers that they
needed to provide the buyer with a Res-idential
Property Disclosure Statement
or a lead-based paint hazard disclosure.
MONROE T. GUALTNEY (Har-risburg)
- The Commission accepted
the voluntary surrender of the broker
license of Mr. Gualtney for a period of
four years effective February 13, 2012.
The Commission dismissed without
prejudice allegations that Mr. Gualtney
violated provisions of the Real Estate Li-cense
Law and Commission rules. Mr.
Gualtney neither admitted nor denied
misconduct.
NICHOLAS ANDREW JAMES
(Knoxville, Tennessee) – By Consent,
the Commission suspended the bro-ker
license of Mr. James for a period of
eight months effective April 15, 2012.
The Commission found that Mr. James
entered into an agreement with a li-censed
North Carolina real estate firm
to sell real estate in the state and then
undertook a course of conduct that
would share compensation of the sales
commission with an unlicensed market-ing
firm with principal offices in Knox-ville,
Tennessee, and of which he was a
member, manager or otherwise held an
interest.
JAMES WILLS REALTY, LLC
(Durham) – The Commission accepted
the permanent voluntary surrender of
the firm license of James Wills Realty
effective April 15, 2012. The Commis-sion
dismissed without prejudice allega-tions
that James Wills Realty violated
provisions of the Real Estate License
Law and Commission rules. James
Wills Realty neither admitted nor de-nied
misconduct.
JESSICA LEWIS LEONARD
(Knoxville) – The Commission accept-ed
the voluntary surrender of the broker
license of Ms. Leonard for a period of
one year effective April 5, 2012. The
Commission dismissed without preju-dice
allegations that Ms. Leonard vio-lated
provisions of the Real Estate Li-cense
Law and Commission rules. Ms.
Leonard neither admitted nor denied
misconduct.
SUE A. LEWIS (Atlantic Beach)
– The Commission accepted the vol-untary
surrender of the broker license
of Ms. Lewis for a period of one year
effective February 13, 2012. The Com-mission
dismissed without prejudice al-legations
that Ms. Lewis violated provi-sions
of the Real Estate License Law and
Commission rules. Ms. Lewis neither
admitted nor denied misconduct.
SUSAN M. LODATO (Asheville)
– By Consent, the Commission repri-manded
Ms. Lodato effective March 1,
2012. The Commission found that Ms.
Lodato co-listed an unimproved lot and
represented in the MLS system that a
manufactured home could be placed on
the lot, but failed to change the repre-sentation
when shortly after listing the
lot, a county-wide zoning ordinance
was adopted which prohibited manu-factured
housing on the lot. The Com-mission
also found that Ms. Lodato
Disciplinary Action
(Continued from page 11)
Receive Credit
Where and When
Credit is Due!
When continuing education
sponsors fail to report credits to the
Commission in a timely manner, li-censees
may find themselves on
Inactive Status on July 1.
You can avoid this problem by
going online to the Commission
Web site, www.ncrec.gov, to verify
your CE credits.
(See Disciplinary, page 13)
Real Estate Bulletin May 2012 13
acted as dual agent for the sale of the
property and again represented to the
buyer that a mobile home could be put
on the lot; the buyer learned after clos-ing
of the restrictions on the lot. The
Commission noted that Ms. Lodato
refunded her commission to the buyer
and has agreed to list the subject lot for
the buyer at no charge.
DAZZELL LORENZO MAT-THEWS,
SR. (Charlotte) – The Com-mission
accepted the voluntary sur-render
of the broker license of Mr.
Matthews for a period of one year ef-fective
April 5, 2012. The Commission
dismissed without prejudice allegations
that Mr. Matthews violated provisions
of the Real Estate License Law and
Commission rules. Mr. Matthews nei-ther
admitted nor denied any miscon-duct.
VICKIE N. MCDANIEL (Hillsbor-ough)
– By Consent, the Commission
reprimanded Ms. McDaniel effective
April 1, 2012. The Commission found
that Ms. McDaniel, acting as broker-in-
charge and qualifying broker of a
property management firm, failed to
properly maintain trust account records
as required by Commission rules in that
check images did not show both sides
of the checks, deposit tickets did not
document the applicable tenant and the
purpose of the funds, and rental trust
account checks were not designated as
trust account checks. The Commission
also found that Ms. McDaniel operated
the firm’s tenant security deposit ac-count
on a shortage of $33,580, which
had existed for several years and dated
to before Ms. McDaniel became bro-ker-
in-charge. The Commission noted
that Ms. McDaniel placed funds in the
account to cover the shortage.
RENE LYNN MERWIN (Raleigh)
– The Commission accepted the volun-tary
surrender of the broker license of
Ms. Merwin for a period of three years
effective April 5, 2012. The Commis-sion
dismissed without prejudice allega-tions
that Ms. Merwin violated provi-sions
of the Real Estate License Law and
Commission rules. Ms. Merwin neither
admitted nor denied any misconduct.
JAMIE P. MOSS-GODFREY
(Rockingham) – By Consent, the Com-mission
suspended the broker license
of Ms. Moss-Godfrey for a period of
one year effective March 15, 2012. The
Commission then stayed the suspension
on certain conditions. The Commission
found that Ms. Moss-Godfrey, acting as
broker-in-charge of a real estate broker-age
firm, admitted in 2009 to accessing
an email account from a computer in
her office and viewing private and per-sonal
emails of a former employee.
MOUNTAIN LIFE REALTY LLC
(Highlands) – By Consent, the Com-mission
suspended the firm license of
Mountain Life Realty for a period of
18 months effective April 1, 2012. The
Commission found that Mountain Life
Realty, acting as buyer agent for two
buyers to purchase two real estate de-velopments,
failed to provide the buy-ers
with a “Working With Real Estate
Agents” disclosure, and failed to obtain
a written agency agreement with either
party. The Commission also found that
the buyers entered into a contract to
purchase the properties, but the trans-action
did not close, and one of the
buyers and another entity subsequently
purchased the properties; Mountain
Life Realty pursued a claim for a com-mission
against the buyer asserting that
it was the buyer’s agent.
GAIL R. MUNSON (Raleigh) – By
Consent, the Commission revoked the
broker license of Ms. Munson effective
March 8, 2012. The Commission found
that Ms. Munson performed a number
of Broker Price Opinions (BPOs) for
various lending institutions and their
agents and failed to obtain listing agree-ments
to sell any of the properties ex-amined
and failed to confirm with her
BPO clients that she had a reasonable
opportunity to list the properties on
which she performed the BPOs. The
Commission also found that Ms. Mun-son
should have known that she had
no reasonable opportunity to list the
properties on which she performed the
BPOs.
NC REAL ESTATE SERVICES
CORP (Clinton) - By Consent, the
Commission suspended the firm license
of NC Real Estate Services for a period
of one year effective April 1, 2012. The
Commission then stayed the suspension
for a probationary period of one year
through March 31, 2013. The Com-mission
found that NC Real Estate Ser-vices
represented a buyer and seller as a
dual agent in a transaction in which a
tenant purchased the home he had been
renting and failed to enter into a writ-ten
agency agreement with either the
buyer or the sellers. The Commission
also found that although NC Real Es-tate
Services acted as a dual agent in the
transaction, it failed to obtain the writ-ten
permission of the buyer or sellers to
represent them both in the transaction.
Finally, the Commission found that NC
Real Estate Services failed to advise the
sellers that they needed to provide the
buyer with a Residential Property Dis-closure
Statement or a lead-based paint
hazard disclosure.
Disciplinary Action
(Continued from page 12)
(See Disciplinary, page 14)
Your Pocket License Card
is your ticket for admission
to Continuing Education classes.
Allow at least 10 days to
process a replacement request
or
purchase and download
a replacement immediately
from the Commission’s Web site.
14 Real Estate Bulletin May 2012
ATUL G. PATHAK (Charlotte) –
By Consent, the Commission revoked
the broker license of Mr. Pathak effec-tive
February 13, 2012. The Commis-sion
found that Mr. Pathak incorpo-rated
a firm to perform brokerage and
property management services, but
failed to license the corporation as a
real estate firm. The Commission also
found that Mr. Pathak failed to en-ter
into written property management
agreements but performed property
management services for clients. The
Commission further found that Mr.
Pathak failed to maintain rental records
and trust accounts for rental proceeds or
security deposits and instead deposited
these funds into his personal bank ac-count
and converted these rent funds
for his own uses.
CLARENCE R. PATTON (Dur-ham)
– By Consent, the Commission
revoked the broker license of Mr. Pat-ton
effective March 15, 2012. The
Commission found that Mr. Patton,
acting as broker-in-charge of a property
management company, failed to main-tain
his trust account records in compli-ance
with the Real Estate License Law
and Commission rules and the liabili-ties
exceeded the funds on hand by ap-proximately
$87,000. The Commission
noted that Mr. Patton has fully funded
the trust accounts.
ROBIN A. PUCKETT (Cornelius)
– By Consent, the Commission sus-pended
the broker license of Ms. Puck-ett
for a period of three months effective
April 1, 2012. The Commission then
stayed the suspension. The Commission
found that Ms. Puckett listed a house
and lot and advertised the property as
having four bedrooms and four bath-rooms
when the permit for the prop-erty
allowed only three bedrooms and
3½ baths. The Commission also found
that Ms. Puckett failed to discover and
disclose the permitted bedrooms and
bathrooms to the purchaser.
VICKI P. ROBERTS (Asheville)
– By Consent, the Commission repri-manded
Ms. Roberts effective May 1,
2012. The Commission found that Ms.
Roberts, as listing agent for an unim-proved
lot, knew of issues relating to the
lot, which were discovered by a prospec-tive
buyer who cancelled a contract to
purchase it, and failed to disclose those
issues to a second purchaser who only
discovered the problems after closing.
The Commission noted that Ms. Rob-erts
refunded her commission to the
purchaser.
RPM GROUP BROKERAGE,
LLC (Knoxville, Tennessee) – By Con-sent,
the Commission permanently re-voked
the firm license of RPM Group
Brokerage. The Commission found that
RPM Group Brokerage contracted with
an unlicensed firm which shares a com-mon,
unlicensed owner to sell real estate
in North Carolina and then undertook
a course of conduct that would share
compensation from the sales commis-sion
with the unlicensed firm.
CHARLIE E. RUNION (Green-ville)
– By Consent, the Commission
suspended the broker license of Mr.
Runion effective February 15, 2012 for
a period of one month ending March
15, 2012. The Commission found that
Mr. Runion renewed his nonresident
North Carolina license on active status
on May 16, 2011, certifying that he
held a current license in his home state,
but unknowingly had allowed his home
state license to expire.
DAVID SCHEERER (Highlands) –
By Consent, the Commission suspend-ed
the broker license of Mr. Scheerer for
a period of 24 months effective Decem-ber
1, 2011. The Commission found
that Mr. Scheerer, acting as buyer agent
for two buyers to purchase two real es-tate
developments, failed to provide the
buyers with a “Working With Real Es-tate
Agents” disclosure, and failed to ob-tain
a written agency agreement with ei-ther
party. The Commission also found
that the buyers entered into a contract
to purchase the properties, but the
transaction did not close, and one of the
buyers and another entity subsequently
purchased the properties; Mr. Scheerer,
acting as broker-in-charge of his real es-tate
brokerage firm, pursued a claim for
a commission against the buyer, assert-ing
that he was the buyer’s agent.
SEA BREEZE REALTY OF THE
OUTER BANKS, LLC (Kitty Hawk) -
By Consent, the Commission suspended
the firm license of Sea Breeze Realty for
a period of twenty-four months effective
April 15, 2011. The Commission then
stayed the suspension for a probation-ary
period of twenty-four months. The
Commission found that Sea Breeze Re-alty,
acting rental agent for rental prop-erties,
deducted monies from the secu-rity
deposits of successive tenants in the
same property for damages for which
they were not responsible or which did
not exist and charged tenants for repairs
which were not made or which did not
cost as much as the money deducted
from the tenants’ deposits. The Com-mission
also found that Sea Breeze Re-alty
failed to maintain complete records
of rental transactions and could not in
every instance produce receipts or other
documents to account for deductions
made from tenant security deposits.
SEMBER L. SMATHERS (Char-lotte)
– The Commission accepted the
permanent voluntary surrender of the
broker license of Mr. Smathers effec-tive
March 8, 2012. The Commission
dismissed without prejudice allegations
that Mr. Smathers violated provisions of
the Real Estate License Law and Com-mission
rules. Mr. Smathers neither ad-mitted
nor denied misconduct.
ROBERT J. SMITH (Charlotte) –
By Consent, the Commission suspend-ed
the broker license of Mr. Smith for
a period of 18 months effective Janu-ary
15, 2012. The Commission found
that Mr. Smith, in September 2009,
entered into a property management
agreement with a landlord client using
a standard North Carolina Association
(See Disciplinary, page 15)
Disciplinary Action
(Continued from page 13)
Real Estate Bulletin May 2012 15
of REALTORS® form which included
the name of the firm with which he was
then associated at the top of the form,
but terms of the agreement identified
Mr. Smith and his unlicensed firm as
property managers. The Commission
also found that the unlicensed firm
was not registered to do business with
the North Carolina Secretary of State
and that Mr. Smith never submitted a
Broker-in-Charge Declaration for him-self
as sole proprietor. The Commission
further found that, in March 2010, Mr.
Smith and his unlicensed firm were
again identified as property manager on
a rental agreement with a tenant for the
subject property and after Mr. Smith
left the licensed firm with which he was
associated, he continued to manage the
property under the unlicensed firm and
without an associated broker-in-charge.
Finally, the Commission found that Mr.
Smith provided incomplete escrow ac-count
records to a Commission inves-tigator
which showed unaccounted for
funds in the account and deficit spend-ing;
Mr. Smith acknowledged that he
cashed rental proceeds and then depos-ited
the cash into the landlord’s account
instead of depositing the rent checks
into his trust account.
SUZANNE SMITH (Asheville)
– By Consent, the Commission repri-manded
Ms. Smith effective March 1,
2012. The Commission found that Ms.
Smith, acted as co-listing agent on an
unimproved lot and represented in the
MLS system that a manufactured home
could be placed on the lot, but failed to
change the representation when shortly
after listing the lot, a county-wide zon-ing
ordinance was adopted which pro-hibited
manufactured housing on the
lot. The Commission also found that
Ms. Smith acted as dual agent for the
sale of the property and again repre-sented
to the buyer that a mobile home
could be put on the lot; the buyer
learned of the restrictions on the lot af-ter
closing. The Commission noted that
Ms. Smith refunded her commission to
the buyer and has agreed to list the sub-ject
lot for the buyer at no charge.
NATASHA A. STARGHILL (Col-fax)
– By Consent, the Commission
suspended the broker license of Ms.
Starghill for a period of two years effec-tive
December 1, 2011. The Commis-sion
found that Ms. Starghill, acting as
broker-in-charge of a real estate broker-age
firm, allowed her broker-in-charge
eligibility to lapse in February, 2007,
and arranged for another broker, not
then associated with her firm, to act as
the BIC. The Commission also found
that Ms. Starghill failed to designate the
new broker-in-charge with the Com-mission
although she believed she had
done so and, during this period, contin-ued
to act as BIC with the other broker
having no involvement with the firm.
The Commission further found that,
in 2009, Ms. Starghill served as buy-er’s
agent for a client and had a broker
whose license was on inactive status step
in to complete the transaction when Ms.
Starghill became unavailable. The Com-mission
finally found that Ms. Starghill
did not attend the closing or review the
settlement statement, thus failing to de-termine
that a $1,000 seller loan had
not been disclosed to the lender and,
while under investigation for alleged
failure to repay a loan on a real estate
investment deal, Ms. Starghill failed to
timely respond to the Commission in-vestigator’s
request for information.
TRI-CITY REALTY, LLC (Rock-ingham)
– By Consent, the Commission
suspended the firm license of Tri-City
Realty for a period of one year effective
March 15, 2012. The Commission then
stayed the suspension on certain condi-tions.
The Commission found that the
broker-in-charge and other agents of
the firm admitted in 2009 to accessing
an email account from a computer in
the firm’s office and viewing private and
personal emails of a former employee.
UNITED COUNTRY COASTAL
HOMES, LLC (Shallotte) – By Con-sent,
the Commission suspended the
firm license of United Country Coastal
Homes for a period of 18 months effec-tive
March 1, 2012. The Commission
then stayed the suspension. The Com-mission
found that during 2008 United
Country Coastal Homes listed a house
and lot for $39,900, submitted an of-fer
to purchase for $35,000 to its seller
client on behalf of an entity it owned
and controlled, but failed to submit an
offer from a competing purchaser for
$44,000. The Commission also found
that during 2009, United Country
Coastal Homes listed a condominium
and submitted an offer to purchase
from a buyer client without informing
its seller client of another firm’s interest
in making an offer and did not give the
competing purchaser an opportunity to
make an offer on the property as United
Country Coastal Homes promised.
KIMBERLY B. WHITLEY (Rock-ingham)
– By Consent, the Commis-sion
suspended the broker license of
Ms. Whitley for a period of one year
effective March 15, 2012. The Com-mission
then stayed the suspension on
certain conditions. The Commission
found that Ms. Whitley, acting as a bro-ker
associated with a real estate broker-age
firm, admitted in 2009 to accessing
an email account from a computer in
her office and viewing private and per-sonal
emails of a former employee.
LINDA C. WILLIAMSON (Le-land)
– By Consent, the Commission
reprimanded Ms. Williamson effective
November 1, 2011. The Commission
found that Ms. Williamson prepared an
Offer to Purchase and Contract and ad-dendum
documents in a lease-purchase
transaction; the contract specified that
the $15,000 earnest money deposit
would be held in escrow by the unli-censed
seller and that Ms. Williamson
had an ownership interest in the prop-erty;
contrary to the contract terms,
the earnest money deposit was written
directly to Ms. Williamson and to the
seller. The Commission also found that
the buyer-tenant was eventually evicted
for non-payment of rent and the seller
and Ms. Williamson refused to refund
(See Disciplinary, page 16)
Disciplinary Action
(Continued from page 14)
16 Real Estate Bulletin May 2012
the $15,000 claiming that the buyer-tenants
understood that the monies
were non-refundable.
JAMES L. WILLS, IV (Durham) –
The Commission accepted the perma-nent
voluntary surrender of the broker
license of Mr. Wills effective April 15,
2012. The Commission dismissed with-out
prejudice allegations that Mr. Wills
violated provisions of the Real Estate
License Law and Commission rules.
Mr. Wills neither admitted nor denied
misconduct.
JEFFREY T. WILLIS (Holly
Springs) – By Consent, the Commis-sion
suspended the broker license of Mr.
Willis for a period of one year effective
March 1, 2011. The Commission found
that Mr. Willis, as broker-in-charge of a
real estate brokerage and property man-agement
firm, charged unauthorized
fees to home purchasers subject to the
regimes of their association clients. The
Commission also found that Mr. Wil-lis
failed to maintain homeowner asso-ciation
money in an exclusive trust ac-count
designated with the words “trust”
or “escrow”, and failed to keep accurate
and complete records of the monies
they held for their landlord clients and
their tenants. Finally, the Commission
found that Mr. Willis, acting as a broker
for homebuyers and sellers and as trust-ee
for earnest money deposits failed to
keep accurate and complete records of
clients’ monies in his care and failed to
accurately and promptly account for the
funds of others in his custody.
WALTER L. WOODDELL (Golds-boro)
– By Consent, the Commission
suspended the broker license of Mr.
Wooddell for a period of 36 months ef-fective
May 1, 2011. One month of the
suspension was active with the remain-der
stayed for a probationary period of
35 months effective May 31, 2011. The
Commission found that Mr. Wooddell,
acting as broker and property manager
for firms which disposed of foreclosed
residential property, procured clean-out
services based upon competitive
bids from independent contractors and
that, in certain instances, Mr. Wooddell
obtained bids from persons related by
marriage to Mr. Wooddell without first
obtaining formal written consent from
his client. The Commission also found
that Mr. Wooddell, in other instances,
created invoices which appeared to be
prepared by the contractors when, in
fact, the invoices were not prepared by
the contractors. Mr. Wooddell neither
admitted nor denied the facts or conclu-sions
of the Commission set out in the
Consent order, but nevertheless con-sented
to the suspension of his broker
license as provided in the order.
JAMES R. WOODS (Jonesboro,
Tennessee) – By Consent, the Commis-sion
reprimanded Mr. Woods effective
February 13, 2012. The Commission
found that Mr. Woods, acting as an auc-tioneer
and real estate broker, auctioned
a residential home for a sales commis-sion;
Mr. Woods used a preprinted
sales contract form which lacked many
required provisions and included provi-sions
concerning the payment of a sales
commission to Mr. Woods and a dis-claimer
of liability for false advertising.
The Commission noted that the non-compliant
sales contract did not cause
any harm that a standard or lawful pre-printed
contract would have prevented.
47,000 copies of this public document were printed at a cost of .2135 per copy
North Carolina Real
Estate Commission
P. O. Box 17100
Raleigh, NC 27619-7100
PRSRT STD
U.S. POSTAGE
PAID
HICKORY, NC
PERMIT NO. 104
PERMIT PRSRT STD
U.S. POSTAGE
PAID
HICKORY, NC
PERMIT NO. 104
PERMIT Disciplinary Action
(Continued from page 15)