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licensed General Contractor in North Carolina. Knight is currently a director of the National Association of REALTORS ® , a past president and member of the board of directors of the North Caro-lina Association of REALTORS ® , and past president of the Chapel Hill Board Jordan and her husband, Max, a REALTOR ® and contractor, reside in Lincolnton and have one son, Jason, a student at the University of North Car-olina at Charlotte and a REALTOR ® . □ 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 0 • O c t o b e r 2 0 0 9 • N u m b e r 2 NORTRTH CACARAROROLINANA REREREALAL ESTATATATATE COMMISSION ESSE QUAUAMAM VIDERI REAL ESTATE LICENSE RENEWAL/ REINSTATEMENT License Number Licensee’s Signature Executive Director Pocket Card Gets New Look Page 6 overnor Beverly E. Perdue has appointed Everett “ Vic” Knight of Raleigh and Alice L. Mosteller of Lake Junaluska to the Real Estate Com-mission, it was announced by Phillip T. Fisher, Executive Director. Knight, a licensed broker since 1984, is also a certifi ed appraiser and the owner of Chapel Hill Appraisals and Consultants. He previously was broker/ owner of Century 21 Vic Knight Realty in Hillsborough for 10 years. A native of Burlington, Knight grad-uated from North Carolina State Uni-versity with a BS in Civil Engineering and worked internationally for Bechtel Corporation for several years. He was a New Commission Web Site Address: www. ncrec. gov arsha H. Jordan of Lincolnton has been elected Chairman of the North Carolina Real Estate Commission for the 2009- 2010 term be-ginning August 1, it was announced by Phillip T. Fisher, Executive Director. A graduate of the University of Vir-ginia ( MWC), Jordan entered the real estate business in 1986. She is owner of Apple Realty in Lin-colnton, a Graduate of the REALTOR ® Institute and holds the Certifi ed Resi-dential Broker, Certifi ed Residential Specialist, and GREEN designations. Appointed to the Commission in 1999, Jordan is past president of the North Carolina Real Estate Education Foundation and past president and 2001 REALTOR ® of the Year of the Lincoln County Board of REALTORS ® . Active in community aff airs, she is a former director of the Lincolnton Chamber of Commerce, past president for Downtown Development, and past president of the Lincolnton Rotary Club. Real Estate Commission member and former Chairman Wanda J. Proffi tt of Burnsville has resigned. A member of the Commission since 1994, Proffi tt was appointed by Gover-nor Perdue to the State Board of Trans-portation. Joe L. Hodge, Jr., of Raleigh, a mem-ber since 2006 and Vice Chairman, has also left the Commission. Commission members thanked Prof-fi tt and Hodge for their leadership and valued service to North Carolina. □ Commission Chairman Marsha H. Jor-dan received the Oath of Offi ce from Lieutenant Governor Walter H. Dalton. ollowing is a summary of pro-posed Commission rule changes which, if approved, would become ef-fective July 1, 2010: • Require retention of trust account and transaction records for a period of fi ve years instead of three as the current rules require. • Add questions to the Residential Property Disclosure Form for home sellers to disclose whether their proper-ties are located within one mile of the boundary of certain military facilities and to disclose noise, air traffi c, vibra- ( See Rules, page 6) ( See Appointed, page 7) Knight Mosteller 2 Real Estate Bulletin October 2009 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 profi ciency in real estate practice. The articles published herein shall not be reprinted or repro-duced in any other publication without specifi c reference being made to their original publication in the Commission’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 Marsha H. Jordan, Chairman Lincolnton Melvin L. Alston Greensboro Benjamin Cone, III Charlotte Everett “ Vic” Knight Raleigh Jeffery J. Malarney Manteo Jerry A. Mannen, Jr. Wilmington Alice L. Mosteller Lake Junaluska S. R. Rudd, Jr. Oak Island M. Rick Watts Fayetteville Phillip T. Fisher Executive Director ADMINISTRATION Mary Frances Whitley Director Paula L. Ricard Financial Offi cer Vickie R. Crouse Network Administrator Wendy C. Harper Administrative Offi cer Robert L. Forshaw Publications Offi cer Brenda H. Badger Information Services Offi cer AUDITS AND INVESTIGATIONS Emmet R. Wood Director Michael B. Gray Chief Auditor/ Investigator Gary R. Caddell Deputy Chief Auditor/ Investigator Jennifer K. Boger Sr. Auditor/ Investigator Rebecca S. Wilkins Sr. Auditor/ Investigator William F. Dowd Sr. Auditor/ Investigator Bart H. Allen Auditor/ Investigator M. Spier Holloman Auditor/ Investigator Pamela M. Vesper Auditor/ Investigator EDUCATION AND LICENSING Larry A. Outlaw Director Anita R. Burt Education/ Examination Offi cer Pamela R. Rorie Continuing Education Offi cer Patricia A. Moylan Legal Education Offi cer Lisa R. McQuillen Education/ Licensing Offi cer Matthew A. Wentz License Application Analyst LEGAL SERVICES Thomas R. Miller Legal Counsel, Director; Special Deputy Attorney General Miriam J. Baer Assistant Director, Legal Counsel Janet B. Thoren Chief Deputy Legal Counsel Charlene D. Moody Deputy Legal Counsel Stephen L. Fussell Sr. Consumer Protection Offi cer Joan H. Floyd Sr. Consumer Protection Offi cer Carolyn A. Haase Consumer Protection Offi cer Peter B. Myers Information Offi cer Elizabeth W. Penney Information Offi cer Jean A. Wolinski- Hobbs Information Offi cer Editor- In- Chief Phillip T. Fisher Editor Robert L. Forshaw 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 S U pdate People Appearances Th omas R. Miller, Special Deputy Attorney General, Director of Legal Services and Legal Counsel, spoke to the Cleveland County Association of REALTORS ® on Fair Housing issues. Janet B. Th oren, Chief Deputy Legal Counsel, spoke to the Advisory Board of the Bank Secrecy Act Coali-tion on issues related to mortgage fraud. Patricia A. Moylan, Legal Educa-tion Offi cer, addressed the Education Advisory Group of the Charlotte Re-gional REALTORS ® Association on rules regarding record maintenance, trust account and reporting require-ments, and broker- in- charge responsi-bilities. Betsey W. Penney, Information Of-fi cer, spoke to the Burlington- Alamance County Association of REALTORS ® and the Pamlico County Board of REAL-TORS ® . Jean Wolinski- Hobbs, Informa-tion Offi cer, spoke to the Harnett Area Board of REALTORS ® and was a pre-senter for a Property Management Up-date program at Wilmington for the North Carolina Association of REAL-TORS ® . Peter B. Myers has assumed the po-sition of Information Offi cer in the Le-gal Services Division. Myers is a graduate of Appalachian State University with a BS in Real Estate. Prior to joining the Com-mission, he was a real estate broker with York Simpson Un-derwood in Raleigh and was owner of Myers Appraisal Company. g Mo Ui t m Real Estate Bulletin October 2009 3 November 4 December 9 January 13 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 ommissionon COURSE SCHEDULES This schedule provides locations, dates, and times for the courses indicated through February, 2010. Register online at the Commission’s Web site, www. ncrec. gov. Broker- in- Charge Course Two- days. Day one, 1- 5 p. m.; Day two, 8: 30- 5: 30 p. m.) Basic Trust Account Procedures Course Charlotte December 8, 9 a. m. - 1 p. m. Holiday Inn Airport Raleigh November 3, 1 - 5 p. m. McKimmon Conference Center Asheville December 2, 3 February 23, 24 Holiday Inn East/ Blue Ridge Parkway Charlotte October 26, 27 December 7, 8 January 26, 27 Holiday Inn Airport Greensboro November 17, 18 February 16- 17 Clarion Hotel ( formerly the Radisson) Raleigh November 9, 10 December 14, 15 McKimmon Conference Center Wilmington January 20- 21 Coast Line Convention Center Confi rm dates and times at the Commission Web site. Scholarship winners ( seated, l. to r.) Nigel J. Terry, Dorothy Boudreaux Hays, and Th om-as R. Alexander hold plaques received at the August awards presentation. Th ey are joined by Commission members ( l. to r.) Jeff rey J. Malarney, Benjamin Cone, III, Joe L. Hodge, Jr., Chairman Marsha H. Jordan, Melvin L. “ Skip” Alston, Jerry A. Mannen, Jr., M. Rick Watts, and S. R. “ Buddy” Rudd, Jr. he Real Estate Commission recognized the outstanding aca-demic achievement of three brokers in REALTORS �� Institute courses. Nigel Terry of Raleigh received the Joe Schweidler Memorial Scholarship and Th omas Alexander of Havelock, the Blanton Little Memorial Scholarship. Both Schweidler and Little were former Executive Directors of the Commis-sion. Dorothy Boudreaux Hays of Mur-phy received the Phillip T. Fisher Schol-arship. Fisher is currently executive di-rector. Th e recipients were selected by the North Carolina Real Estate Education-al Foundation. □ 4 Real Estate Bulletin October 2009 North Carolina Partners with Federal Agencies in Builder Fraud Case, Nets $ 50 Million National Settlement ( Th e following is excerpted from ARELLO ® Boundaries, the newsletter to members of the Association of Real Estate License Law Offi cials.) T he North Carolina Real Estate Commission recently joined numerous federal agencies and the state's Commissioner of Banks in announcing the resolution of an inter- agency investigation of Beazer Homes, a home build-ing company based in Atlanta, Georgia, with operations in at least 21 states, and its wholly- owned subsidiary, Beazer Mortgage Corporation. In a criminal Bill of Information fi led along with a Deferred Prosecution Agree-ment resolving the case, the United States Attorney for the Western District of North Carolina ( Charlotte Division) charged the company with engaging in massive and complicated schemes that included discount point fraud, down payment as-sistance fraud, HUD- licensing fraud and mortgage loan stated- income fraud. In the Deferred Prosecution Agreement executed by the United States Attor-ney and Beazer, the company agreed to pay up to $ 50 million dollars in restitu-tion over several years. The announcement of the investigation and resolution of the case included public statements by offi cials of the many agencies involved in the investigation including U. S. Attorney Edward R. Ryan, HUD Secretary Shaun Donovan, the North Carolina Deputy Commissioner of Banks and North Carolina Real Estate Commission Deputy Chief Counsel Janet Thoren. Thoren said, “ The North Carolina Real Estate Commission is committed to the fi ght against mortgage fraud. We are pleased that we were able to partner with the U. S. Attorney's Offi ce in the Western District and each of the other agen-cies involved in this complicated and detailed investigation and work together to bring about a result that includes restitution to so many consumer victims, both in North Carolina and nationwide.” □ he Broker- in- Charge Guide, a valuable reference and re-source for the management of North Carolina real estate offi ces, has been updated and expanded. Th is 194- page volume features a lengthier discus-sion of licensee o m p e n s a t i o n with several pages of examples, plus updating of the requirements for maintaining and reinstating BIC eligibility under the new rules eff ective July 1, 2009. Orders may be placed for the book either online from the Publi-cations page or with printed forms available online or in this issue of the Bulletin to mail or fax. It is recommended that BICs with editions of the Guide dated 2006 or older ( see date at bottom of title page) purchase the newly up-dated volume. Th e Guide was fi rst published in November 2004. □ Allan R. Dameron Legal Internship Lindsey E. Wakely of Raleigh, a second year law student at the University of North Caro-lina, was the Allan R. Dameron Legal Intern for 2009. With her at the July Commission meeting are ( l. to r.) Commission members Jeff rey J. Malarney, S. R. “ Buddy” Rudd, Jr., M. Rick Watts, Chairman Melvin L. “ Skip” Alston, Vice Chair Marsha H. Jordan, Ben-jamin Cone, III, Wanda J. Proffi tt, Jerry A. Mannen, Jr., and Joe L. Hodge, Jr. Th e award is given annually in memory of and tribute to former Commission Chairman Dameron for his dedicated service in protecting the interests of North Carolina real estate consumers. l s c wo ur m �� Real Estate Bulletin October 2009 5 Course instructors approved ( for a total of 190) • 41 Broker- in- Charge Course sessions conducted for 2,027 li-censees Audits/ Investigations • 152 fi eld investigations completed • 196 trust accounts examined • 373 persons interviewed • 13 trust account sessions conducted for 310 students • 1,848 students instructed for trust ac-count portion of BIC course Legal • 1,037 case ( complaint) fi les opened and 1,101 closed • 33 licensees reprimanded • 70 licenses suspended • 70 licenses revoked • 20 licenses surrendered • 95 cases with conditional remedies □ • 209 expired, surrendered and suspended licenses reinstated • 2,243 Certifi cates of License History issued • 216 license applications reviewed by Commission for character issues • 106 license applicant conferences conducted Education • 7 new private real estate school licens-es issued and 66 renewed • 27 real estate instructors approved ( a 19% increase) and 109 renewed • 83 new continuing education elective courses approved ( for a total of 437 courses) • 28 new continuing education sponsors approved ( for a total of 231) • 13 new continuing education Update T he statistics here generally refl ect the activities of the Real Estate Commission during the period from May 1, 2008 to April 30, 2009. Contact • 246,609 telephone calls • 1.5 million+ Web site “ hits” Publications • 640,000+ publications distributed to brokers, consumers, applicants Technology • 8,645 student rosters electronically processed for CE courses and 859 for postlicensing courses Licensing • 457,468 license records changed • 5,663 applications processed for li-censes by examination • 5,273+ license examinations admin-istered • 2,993 licenses by examination issued • 339 licenses issued by reciprocity • 1,051 fi rm licenses issued New Commission Web Site Address: www. ncrec. gov here is a school of thought that it is not necessary to obtain a current survey when pur-chasing real estate-- that title insurance and affi davits from sellers suffi ciently protect the purchaser’s interests or that the purchaser can simply rely upon a previous survey. However, real estate agents should be aware that purchas-ers face potential problems typically re-ferred to as “ matters of survey” when a current fi eld survey of property is not performed. Matters of survey relate to anything that could negatively aff ect the use of property being purchased. Th ese in-clude, encroachments across property lines or building restriction lines; fenc-es/ walls, landscaping features, wells, swimming pool decks; the location of utilities, access ways, etc., relative to easements, property lines or buildings; the existence of fl ood zones; and other similar matters. It is possible that matters of sur-vey may be covered in title insurance policies. But coverage that protects the purchaser= s interests is unlikely to be included unless a survey is performed prior to issuance of the policy. ALender= s policies@ may cover matters of survey without requiring a current survey, but they do not protect the purchaser. Th e risk associated with lenders= policies is often acceptable to the title insurer be-cause claims from a lender are not likely to occur until the purchaser defaults on the loan. From Th e North Carolina Society of Surveyors, Inc. ( Reprinted from the March 2004 Real Estate Bulletin) In recent years, it has become popular to have the seller sign an affi davit eff ectively guaranteeing that no matters of survey negatively af-fect the property. However, in doing so, the seller may be unwittingly accepting some unwarranted risks of liability. Th e buyer may also be tempted to simply rely upon a survey document from a previous transaction, but such survey may not contemplate changes to the property since the earlier survey was performed. Many people choose not to obtain a current survey because they believe it will delay closing the transaction. Th is may be true if it is not ordered from the surveyor until closing of the transaction is assured. However, if the purchaser de-cides that a current survey is desired, it can be ordered early enough so as not to delay the closing date. An informed purchaser knows that an accurate, current survey will provide peace of mind that cannot be obtained from any other source. □ • s ce 6 Real Estate Bulletin October 2009 tions, lights and other impacts from nearby military facilities; • Allow postponement and comple-tion of continuing education, Broker-in- Charge, and postlicensing courses, and the payment of license renewal fees for individuals licensed as brokers and approved as instructors who are also members of the United States armed forces who are serving in combat or in presidentially- declared disaster areas. • Clarify when and under what cir-cumstances students in the Broker- in- Charge Course and in all continuing education courses may be absent during the scheduled classroom hours and still receive continuing education credit for attending the course. A public hearing for comments on the proposed rule changes will be held at 9: 00 a. m., February 10, 2010 in the Conference Room of the Commission’s offi ce. □ he pocket card you receive with your real estate license has been rede-signed to be more useful and better protected. Issuance of the new design began in June with renewals following depletion of existing card inventory. As shown, the card has a cover to shield the surface containing your name, license number and signature. Kept closed, it will prevent smudging. The opposite side of the cover contains Commission contact information for easy access along with a continuing education deadline reminder. □ General Contact Information • Information Services, Ext 772 • Licensing/ Education, Ext 776 • Legal Division, Ext 131 • Audits and Investigations, Ext 717 Reminders • Continuing Education Deadline: June 10 • Failure to renew will change license status and any BIC designation. North Carolina Real Estate Commission P. O. Box • Raleigh, NC - ( ) - • ncrec. gov NORTH CAROLINA REAL ESTATE LICENSE RENEWAL/ REINSTATEMENT License Number Licensee’s Signature Executive Director Inside cover By Charlene D. Moody Deputy Legal Counsel he Real Estate Commission often gets calls from licensees and homeowners seeking alterna-tive ways to bring about sales. One such method suggested by callers is to raffl e a home. The seller would sell raffl e tickets, the winning ticket- holder would receive the property, and the seller would receive the proceeds. In the past, the answer was clear that under North Carolina law, no real estate could be offered as a raffl e prize under any circumstance. How-ever, in May 2009, the N. C. General Assembly amended N. C. G. S. § 14- 309.15 to allow real property to be of-fered as a prize in a raffl e by certain organizations. The maximum appraised value of the real property to be raffl ed is $ 500,000 for any one prize and the ( Continued from page 1) total appraised value of all real estate prizes offered by one nonprofi t orga-nization may not exceed $ 500,000 in any one calendar year. Licensees must note that the stat-ute authorizes only nonprofi t organi-zations or government entities to con-duct raffl es. Sellers might ask if they would qualify if they donated a portion of the raffl e proceeds to a charity. However, the statute provides that the proceeds of the raffl e may not be used to com-pensate any person to conduct a raf-fl e. The Commission, therefore, takes the position that the seller may not re-ceive any part of the raffl e proceeds nor may a licensee receive any fee or commission from the raffl e proceeds. A person conducting a raffl e in vi-olation of N. C. G. S. § 14- 309.15 shall be guilty of a Class 2 misdemeanor. Additionally, licensees and the public should be aware that there may be surprising tax consequences of winning a real estate raffl e. Licens-ees should advise any participant in such a raffl e to consult a tax advisor concerning the tax consequences to the winner. For example, in the cur-rent tax year, the home may be re-portable as ordinary income, leading to a large income tax bill. Further, when the winner decides to sell the home, he or she may en-counter a large capital gains tax be-cause the cost basis for the home will be the ticket price rather than the value of the home. □ Real Estate Bulletin October 2009 7 he Commission’s North Caro-lina Real Estate License Law and Commission Rules book has been updat-ed and reprinted. Th is 92- page book is published as a convenient, portable reference and con-tains four sections: • North Carolina Real Estate Law • Commission Rules • Trust Account Guidelines • License Law and Rules Comments Th e Rules and Comments sections are current with the rule changes ef-fective July 1. Th e Comments section serves as a study guide for the initial li-censing examination. □ of REALTORS ® and the Triangle Mul-tiple Listing Service. He is a Continuing Education Instructor for the Real Estate Commission and the North Carolina Appraisal Board. Knight has two daughters, “ Krystle” Gray Knight, 23, and “ Victoria” Scarlet Knight, 16, and is a member of Hills-borough United Church of Christ. Mosteller is Vice President/ Man-aging Broker of the Beverly Hanks & Associates offi ce at Waynesville. She formerly owned Apple Realty, Inc., in Waynesville for 18 years until selling it to Beverly Hanks in 2004. A graduate of Appalachian State University, she taught at schools in North Carolina and Virginia for 20 years. She received her real estate license in 1984. She is a former Haywood County and North Carolina REALTOR ® of the year and a past president of the Hay-wood County Board of REALTORS ® Mosteller has two daughters, Debra Bryant, a Registered Nurse in Raleigh, and Paulette Childers, a broker at Bev-erly Hanks in Waynesville. □ Th e Honorable Sarah Parker, Chief Justice of the North Carolina Supreme Court, ( center) administered the Oath of Offi ce to Commission members Everett “ Vic” Knight and Alice L. Mosteller. North Carolina Real Estate License Law and Commission Rules ( Also including Trust Account Guidelines and Comments on the Law and Rules) Published by the North Carolina Real Estate Commission July 2009 $ 3.00 ( Continued from page 1) s part of the Real Estate Commission’s quality control program for its approved real estate schools and instructors, it monitors the per-formance of their students taking the license examination for the fi rst time within 180 days of course completion. Th e results are periodically reported to the schools/ instructors and annually reviewed by the Commission. Th e most recent annual performance record for each school may be found on the Com-mission’s website. During the July, 2008- June, 2009 reporting period, 72% of all fi rst- time candidates passed. Th e Commission congratulates the following schools and instructors ( which had six or more students tested) for having at least 80% of their students pass the license examination on their fi rst attempt: Schools Allen Tate School of Real Estate, Charlotte; Asheville- Buncombe Commu-nity College, Asheville/ Madison; Cape Fear Community College, Wilmington; Central Piedmont Community College, Charlotte/ Matthews/ Huntersville; Coastal Carolina Real Estate Academy, Wilmington; Cumbie Institute of Real Estate, Asheville; Galloway School of Real Estate, Hayesville/ Murphy; Min-gle School of Real Estate, Charlotte/ Cornelius; Mitchell Community College, Statesville/ Mooresville; Superior School of Real Estate, Charlotte/ Concord/ Cor-nelius/ Huntersville Instructors Oscar Agurs, Charlotte; Richard Barden, Franklin; Pete Camak, Pine Knoll Shores; Lowell Dotson, Matthews; Rick Fuller, Greensboro; Bill Gallagher, Charlotte; Frank Galloway, Andrews; Scott Gibson, Raleigh; Violet Harrington, Durham; Sandra Hubbard, Kittrell; Carolyn Lambert, Charlotte; Dwight Lawing, Jr., Parkton; Stephen Lawson, Winston- Salem; Saundra Martin, Salisbury; Terri Minnis, Wilmington; Brian Pate, Wake Forest; Laurel Pettys, Wilmington; Rashad Phillips, Charlotte; Bobby Potts, Asheville; Kevin Sensing, Goldsboro; Tim Terry, Charlotte; Jerry Th omas, Wrightsville Beach; Glenn Weeks, Holly Springs; Sandy Williams, Charlotte; Terry Wilson, Huntersville; Ben Wirtz, Iron Station □ 8 Real Estate Bulletin October 2009 September 23, 2009 Th e Federal Housing Finance Agency 1700 G Street, NW 4th Floor Washington, DC 20552 Dear Sir or Madam: To assist your agency in monitoring and evaluating the eff ectiveness of the Home Valuation Code of Conduct implemented May 1 by the U. S. Federal Home Loan Mortgage Corporation ( Freddie Mac) and the Federal National Mortgage Association ( Fannie Mae), the North Carolina Real Estate Commission has directed me to share with you its observations and experiences with regard to the Code and to respectfully off er its suggestions for improvement. Th e Real Estate Commission is a governmental agency charged with protecting the interests of real estate consumers in our State. Th e Commission recognizes and appreciates your eff orts through the Code to address some of the more egregious abuses visited upon the public by the unscrupulous acts of certain mortgage lenders. However, like your agency, we have found when adopting rules and implementing new legislation, some innocent misunderstandings and intentional attempts to exploit ambiguities in them are perhaps unavoidable. With regard to the Code, prospective homebuyers have complained to us that lenders assert that under “ new rules” the lenders must order appraisals through appraisal management companies. We have also received complaints from buyers, sellers and real estate agents that appraisers assigned by such companies to perform the appraisals are not familiar with or suffi ciently informed about the real estate market where the property is located to make accurate appraisals. We are, in fact, aware of cases where appraisers have traveled from other states and of cases where appraisers attempted to perform appraisals without consulting MLS sales data. Further, despite the apparent intent of the Code to distance lenders from the appraisal process, we have learned that some lenders own or have an ownership interest in the appraisal management companies they use. Although the Real Estate Commission does not at this time support a proposed moratorium on the continued implementation of the Code and we are aware that bulletins and other supplemental information about the Code have been published, it recommends for your agency’s consideration that the Home Valuation Code of Conduct itself be amended to: 1. Clarify that lenders need not engage appraisal management companies; 2. Prohibit lenders from engaging appraisal management companies which are owned, controlled by, or affi liated with the lender; 3. Expressly require lenders to engage, whether directly or indirectly, appraisers who are state- licensed and that the appraisals performed by such appraisers conform to the minimum requirements of state laws and rules and the Uniform Standards of Professional Appraisal Practice; and 4. Expressly require appraisers who are engaged to perform appraisals to be familiar with the market where the property is located and to have access to and use the best available data for that market in performing the appraisal. We hope our suggestions are received in the helpful spirit in which they are intended and that you will you not hesitate to contact our offi ce if we can be of any assistance to your agency with this or any related matter. Sincerely yours, North Carolina Real Estate Commission Editor’s Note: Th e recently implemented Home Valuation Code of Conduct is intended to enhance the independence and accuracy of the home appraisal process and provide added protections for homebuyers, mortgage investors and the housing market. In response to complaints from real estate consumers and brokers regarding the Code, the Real Estate Commission has announced its support for legislation requiring appraisal management companies operating in North Carolina to be regulated by the North Carolina Appraisal Board, and it directed that the following letter be sent to the Federal Housing Finance Agency. Home Valuation Code of Conduct Real Estate Bulletin October 2009 9 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 This form for free publications only. Free Publications Quantity Questions and Answers on: Fair Housing Tenant Security Deposits Condos and Townhouses Residential Subdivisions and Planned Communities Purchasing Coastal Real Estate in North Carolina Renting Residential Real Estate 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) NAME _____________________________________ ADDRESS __________________________________ CITY/ STATE/ ZIP _____________________________ Telephone______________ Email_______________ Please allow 7 days from receipt of order for delivery. How To Order: Mail or fax this form. Credit card: MasterCard or Visa only. Please do not remit cash. Online: www. ncrec. gov Select Publications on the Home page. Fax: 1- 866- 867- 3746 Mail to: Commission Publications, P. O. Box 28151, Raleigh, NC 27611 This form for purchasing publications only. NAME ___________________________________________ ADDRESS ________________________________________ CITY/ STATE/ ZIP ___________________________________ Telephone _________________ Email __________________ Credit card orders must be a minimum of $ 1.00. Signature: __________________________________________ Please allow 7 days from receipt of payment for delivery. MasterCard Visa Expiration Date Purchase Publications Quantity Totals Residential Square Footage Guidelines ($. 65 per copy) $ Working With Real Estate Agents ($. 25 per copy) $ Questions and Answers on: Home Inspections ($. 25 per copy) $ Earnest Money Deposts ($. 25 per copy) $ Real Estate Closings ($. 25 per copy) $ Offer and Acceptance ($. 25 per copy) $ Owning Vacation Rental Property ($. 25 per copy) $ Broker- in- Charge Guide ($ 10 per copy) $ North Carolina Real Estate License Law and Commission Rules ($ 3.00 per copy) $ Real Estate Agent Safety Guide ($. 25 per copy) $ Amount Enclosed $ 10 Real Estate Bulletin October 2009 Order Form NORTH CAROLINA REAL ESTATE MANUAL NAME ADDRESS Street ( NOT P. O. BOX) CITY/ STATE/ ZIP Telephone Email Single Manual @ $ 44.00* ( incl. Tax, Shipping) $ 44.00 Additional Manuals @ $ 39.00* each ( incl. Tax, Shipping) X $ Quantity TOTAL $ MasterCard Visa Exp Date Signature: * Manual sales price is $ 34.95 plus $ 2.45 sales tax plus shipping. Please allow 7 days from receipt of payment for delivery. 2008- 2009 Edition NORTH CAROLINA REAL ESTATE MANUAL Th 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. HOW TO ORDER: ONLINE Go to the Commission’s Web site, www. ncrec. gov, select “ Publications/ Bulletin” and click on NC Real Estate Manual to link directly with the book distributor. Follow the instructions for ordering using your MasterCard or Visa credit card. BY MAIL OR FAX Mail or fax an order form with payment. For credit card payments, only MasterCard and Visa are accepted. For checks, please send only cashier’s or certifi ed check or money order, payable to: North Carolina Real Estate Manual. ( Th e Manual sales price is $ 34.95 plus sales tax and shipping.) 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 NORTH CAROLINA REAL ESTATE MANUAL 2008- 2009 Edition Patrick K. Hetrick Larry A. Outlaw Patricia A. Moylan Published By The North Carolina Real Estate Commission Real Estate Bulletin October 2009 11 eff ective September 9, 2009. Th e Com-mission found that Mr. Blake, a broker-in- charge of a sole proprietorship, par-ticipated in mortgage fraud schemes in which he prepared false and infl ated ap-praisals of certain parcels of real prop-erty that were submitted to mortgage lenders who relied on his appraisals to determine the values of certain real properties which would be collateral for mortgage loans. JOHN MICHAEL BURTON ( Ca-tawba) – Th e Commission accepted the voluntary surrender of the broker license of Mr. Burton for a period of fi ve years eff ective August 13, 2009. Th e Commission dismissed without prejudice allegations that Mr. Burton violated provisions of the Real Estate License Law and Commission rules. Mr. Burton neither admitted nor de-nied misconduct. MARTHA LILIANA CAM-POVERDE ( Charlotte) – Th e Com-mission accepted the voluntary surren-der of the broker license of Ms. Cam-poverde eff ective May 28, 2009. Th e Commission dismissed without preju-dice allegations that Ms. Campoverde violated provisions of the Real Estate License Law and Commission rules. Ms. Campoverde neither admitted nor denied misconduct. DIANNE M. CARTER ( Mat-thews) – Th e Commission permanent-ly revoked the broker license of Ms. Carter eff ective August 18, 2009. Th e Commission found that Ms. Carter, as broker- in- charge, principal broker, and/ or treasurer of various real estate brokerage fi rms, failed to account for agency agreement with any party. BDF Realty released the option money from its trust account to the would- be op-tionor, but did not have an option con-tract executed by the parties. Th e Com-mission noted that BDF Realty, upon fi rst request of refund by the would- be optionee, refunded the would- be op-tionee $ 950. BEAZER/ SQUIRES REALTY, INC. ET. AL. ( Charlotte) – By Consent, the Commission revoked the fi rm license of Beazer/ Squires Realty, Inc., eff ective July 13, 2009. Th e Commission found that Beazer/ Squires Realty, Inc. sold new construction homes to consumers and that its parent company, Beazer Homes USA, was charged in the U. S. District Court of the Western District of North Carolina with one count of Mortgage Fraud Conspiracy and one count of Ac-counting Fraud Conspiracy for transac-tions that occurred in or about 2000 through 2007. HENRY C. BLAKE, JR. ( Riegel-wood) – By Consent, the Commission revoked the broker license of Mr. Blake Penalties for violations of the Real Estate 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 y RHONDA KAE AXHOJ ( Wax-haw) – By Consent, the Commission reprimanded Ms. Axhoj eff ective Oc-tober 1, 2009. Th e Commission found that Ms. Axhoj, broker- in- charge of her sole proprietorship, sold a property she owned and signed an incorrect closing statement indicating the buyer paid a $ 2,000 earnest money deposit to her, when the buyer had not, in the belief that the buyer would pay the deposit after closing. Ms. Axhoj attempted to collect the $ 2,000 after closing but the buyer did not pay it. JACOB O. BALOGUN ( Fayette-ville) – By Consent, the Commission suspended the broker license of Mr. Ba-logun for a period of one year eff ective May 1, 2009. One month of the sus-pension was active with the remainder stayed for a probationary period of 11 months. Th e Commission found that the N. C. State Board of Certifi ed Pub-lic Accountant Examiners revoked Mr. Balogun’s CPA license in 2008, the re-vocation stemming from a violation of a six- month suspension of his CPA license in 2006, and that Mr. Balogun had failed to inform the Commission of either disciplinary action. BDF REALTY, INC. ( Charlotte) – By Consent, the Commission sus-pended the fi rm license of BDF Realty for a period of one year eff ective June 10, 2008. Th irty days of the suspension were active with the remainder stayed for a probationary period of one year. Th e Commission found that BDF Real-ty received $ 950 which was intended to be used as option money. Th e Commis-sion further found that BDF Realty had a verbal property management agree-ment with the owner, but no written ( See Disciplinary Action, page 12) Write LicenseYour Number On All Contracts Disclosures and 12 Real Estate Bulletin October 2009 Ms. Feeley certifi ed in July 2007 that she had four years full time, active expe-rience as a real estate broker or salesper-son, thereby causing the Commission to remove her from provisional license status, when in fact her license had only been active for a total of only two years and 11 months. Th e Commission noted that prior to activation of her license she had worked in home sales for a builder developer in a capacity exempt from licensure. Ms. Feeley’s license was re-turned to provisional status until June 10, 2009, by which time she had com-pleted a 30- hour post- licensing course. RONALD S. FERRELL ( Corne-lius) – By Consent, the Commission suspended the broker license of Mr. Ferrell for a period of two years eff ective May 1, 2009. Th irty days of the sus-pension were active with the remainder stayed for two years. Th e Commission found that Mr. Ferrell, a certifi ed ap-praiser from 2001 to 2004, surrendered his appraisal certifi cate to the North Carolina Appraisal Board in a consen-sual arrangement with the Board in the face of allegations that he had violated provisions of the appraiser licensing statutes and the Uniform Standards of Professional Appraisal Practice. BRETT DAVID FURNISS ( Char-lotte) – By Consent, the Commission suspended the broker license of Mr. Furniss for a period of one year eff ective June 10, 2009. Th irty days of the sus-pension were active with the remainder stayed for a probationary period of one year. Th e Commission found that Mr. Furniss, broker- in- charge of a real estate brokerage fi rm, received $ 950 intended as option money. Th e Commission fur-ther found that Mr. Furniss had a verbal property management agreement with the owner, but no written agency agree-ment with any party. Mr. Furniss re-leased the option money from his trust account to the would- be optionor, but did not have an option contract execut-ed by the parties. Th e Commission not-ed that Mr. Furniss, upon fi rst request or to remit monies coming into her possession which belonged to another. Th e Commission also found that Ms. Carter scheduled withdrawals to herself without authorization from her princi-pal, failed to turn over rental proceeds, failed to maintain rental proceeds in a trust account, and failed to make her trust account records available for in-spection by the Commission. BECKY PERRY CODER ( Char-lotte) – Th e Commission accepted the permanent voluntary surrender of the broker license of Ms. Coder eff ective October 1, 2009. Th e Commission dismissed without prejudice allegations that Ms. Coder had violated the Real Estate Law and Commission rules. Ms. Coder neither admitted nor denied misconduct. CREATIVE BUYERS NET-WORK, LLC ( Charlotte) – By Con-sent, the Commission reprimanded Creative Buyers Network eff ective July 1, 2009. Th e Commission found that Creative Buyers Network, a licensed real estate brokerage fi rm, listed a home threatened with foreclosure, and that its broker- in- charge convinced an ac-quaintance to invest $ 15,000 to bring the mortgage payments current and make improvements on the property. Th e Commission further found that the broker- in- charge fi lled out a promisso-ry note between the seller and investor and included Creative Buyers Network as trustee but that Creative Buyers Net-work failed to deposit the funds into its trust account. JOSEPH F. DAVIS, JR. ( Burling-ton) – By Consent, the Commission reprimanded Mr. Davis eff ective June 1, 2009. Th e Commission found that Mr. Davis, broker- in- charge of a real estate brokerage fi rm, failed to maintain his trust account records as required by the Real Estate License Law and Commis-sion rules. Th e Commission noted that Mr. Davis corrected all the violations noted with respect to his trust account records, there were no shortages, and no consumers were harmed as a result. MARTIN J. EVANS ( Hampstead) – By Consent, the Commission sus-pended the broker license of Mr. Ev-ans for a period of three years eff ective November 1, 2008. Six months of the suspension were active with the remain-der stayed for a probationary period of 30 months on certain conditions. Th e Commission found that Mr. Evans, qualifying broker and broker- in- charge of a real estate brokerage fi rm, listed a personal rental home and lot and adver-tised it in the MLS as being located in in a federal fl ood zone, but specifi cally not a COBRA zone, when in fact it was. Buyers of the property demolished the house, intending to build a new home, and then discovered that the property was in a COBRA zone and federal fl ood insurance was not available for a new structure. KELLY A. FEELEY ( Charlotte) – By Consent, the Commission repri-manded Ms. Feeley eff ective January 14, 2009. Th e Commission found that 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 Com-mission’s Legal Services Division at 919- 875- 3700 for more infor-mation. DISCIPLINARY ACTION ( Continued from page 11) ( See Disciplinary Action, page 13) Real Estate Bulletin October 2009 13 payments from the buyer to the seller on the undisclosed loan. JAMES M. MADAGAN ( Char-lotte) – By Consent, the Commission revoked the broker license of Mr. Mad-agan eff ective October 8, 2009. Th e Commission found that Mr. Madagan, as a broker with resort real estate devel-oper, became the custodian of a resort club new member initiation fees and failed the hold the money in a trust account and converted in excess of $ 700,000 of the money to his own use. Th e Commission noted that Mr. Mada-gain entered into an agreement to repay the money but has failed to make full restitution as of this date. PAUL DEVON MAXWELL ( Lew-isville) – By Consent, the Commis-sion revoked the broker license of Mr. Maxwell eff ective October 8, 2009. Th e Commission found that Mr. Maxwell, as broker and rental agent for the owner of a rental property, procured a tenant and collected $ 1,800 for rent and se-curity deposit, but failed to deposit the money into an escrow account, and in-stead gave the money to his girlfriend. Th e Commission also found that Mr. Maxwell, whose license had expired at the time of the transaction, did not account for or remit the money to his landlord client or to the tenant. FRANK T. MCCOY, JR. ( Albe-marle) – By Consent, the Commission suspended the broker license of Mr. McCoy for a period of six months eff ec-tive October 1, 2009. Th e Commission then stayed the suspension for a proba-tionary period of one year eff ective Oc-tober 1, 2009. Th e Commission found that Mr. McCoy managed a property but failed to obtain a written property management agreement with the owner or written lease agreement with the ten-ants. Th e Commission also found that Mr. McCoy failed to maintain his trust accounts in compliance with the Li-cense Law and Commission rules. Th e Commission noted that Mr. McCoy pended the fi rm license of DR Horton for a period of one year eff ective May 1, 2008. Th e Commission then stayed the suspension for a probationary pe-riod of two years on certain conditions. Th e Commission found that former employees of DR Horton sold 14 new construction homes to buyers and paid fees to unlicensed persons and entities for producing the buyers in these trans-actions. ELBERTA L. JONES ( Manson) – By Consent, the Commission sus-pended the broker license of Ms. Jones for a period of one year eff ective March 1, 2009. Th ree months of the suspen-sion were active with the remainder stayed for a probationary period of nine months on certain conditions. Th e Commission found that Ms. Jones, who listed and sold a property for her seller clients, witnessed a promissory note ex-ecuted by the buyer at closing in which the buyer agreed to repay a loan from the seller, but did not inform the clos-ing attorney about the loan, which was not shown on the closing statement or otherwise disclosed to the lender. Th e Commission also found that after clos-ing Ms. Jones acted as a conduit for of refund by the would- be optionee, refunded the would- be optionee $ 950. MARK GAGLIARDI ( Greenville) – Th e Commission accepted the volun-tary surrender of the broker license of Mr. Gagliardi for a period of fi ve years eff ective August 1, 2009. Th e Commis-sion dismissed without prejudice allega-tions that Mr. Gagliardi violated provi-sions of the Real Estate License Law and Commission rules. Mr. Gagliardi neither admitted nor denied miscon-duct. JON C. GILLMAN ( Charlotte) – Th e Commission accepted the volun-tary surrender of the broker license of Mr. Gillman for a period of fi ve years eff ective July 1, 2009. Th e Commission dismissed without prejudice allegations that Mr. Gillman violated provisions of the Real Estate License Law and Com-mission rules. Mr. Gillman neither ad-mitted nor denied misconduct. GTC REALTY, INC. ( Waxhaw) – By Consent, the Commission rep-rimanded GTC Realty eff ective May 1, 2009. Th e Commission found that GTC Realty entered into a buyers’ agency agreement with a husband and wife and continued to act as a buyers��� agent after the agreement expired in-cluding writing an off er on a property and assisting the buyers in a lease- pur-chase contract. Th e Commission also found that GTC Realty was paid a 2% fee of just under $ 6,000 for its services which included showing the clients the house, contacting the seller on behalf of its clients, and delivering funds to the seller. Finally, the Commission found that after the clients fi led a complaint with the Commission about the lease-purchase transaction, GTC Realty re-peatedly failed to respond to Letters of Inquiry. DR HORTON, INC. ( Charlotte) – By Consent, the Commission sus- DISCIPLINARY ACTION ( Continued from page 12) ( See Disciplinary Action, page 14) Receive Credit Where and When Credit is Due! When continuing education sponsors fail to report credits to the Commission in a timely man-ner, licensees may fi nd them-selves 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. Similarly, if you completed your CE online, verify that your sponsor submitted your affada-vit to the Commission in time for your CE record to be updated. 14 Real Estate Bulletin October 2009 ised a 20% return on the funds at clos-ing and represented that he had a buyer waiting to close. Th e Commission fur-ther found that Mr. NaPant fi lled out a promissory note between the seller and investor and included himself as prom-issor and his fi rm as trustee but failed to deposit the funds into his trust ac-count. Th e Commission further found that Mr. NaPant, after the contracted sale fell through, failed to repay the in-vestor’s money and the home fell into foreclosure again. DEBRA PAGANO ( Waxhaw) – By Consent, the Commission suspended the broker license of Ms. Pagano for a period of one year eff ective May 1, 2009. Th e Commission then stayed the suspension for a probationary period of one year on certain conditions. Th e Commission found that Ms. Pagano, qualifying broker and broker- in- charge of her licensed fi rm, supervised a provi-sional broker in the fi rm, who entered into a buyers’ agency agreement and continued to act as the buyers’ agent after the agreement expired including writing an off er on a property and assist-ing the buyers in a lease- purchase con-tract. Th e Commission also found that Ms. Pagano’s fi rm was paid a 2% fee of has since taken the Basic Trust Account Course and brought his books and re-cords into compliance. MOUNTAIN LIFESTYLES, LLC ( Asheville) – By Consent, the Com-mission reprimanded Mountain Life-styles eff ective September 1, 2009. Th e Commission found that Mountain Lifestyles, a real estate brokerage fi rm, listed in July 2006 a property which was served by a septic system and ad-vertised the property as having three bedrooms, but failed to verify that the property was permitted for three bed-rooms. Th e Commission further found that the buyer of the house discovered it had only been permitted for a two-bedroom home when attempting to sell the property several years after the purchase. MYREALTY CONSULTANTS & MANAGEMENT, INC. ( Charlotte) – By Consent, the Commission revoked the fi rm license of MyRealty Consul-tants & Management eff ective August 13, 2009. Th e Commission found that MyRealty Consultants & Management managed a residential rental property, but failed to deposit funds collected on behalf of the property owner into a trust account, failed to maintain and retain trust account records, and to maintain records in such a manner as to create a clear audit trail. EZEKIAS R. NAPANT ( Char-lotte) – By Consent, the Commission suspended the broker license of Mr. NaPant for a period of one year eff ec-tive September 1, 2009. Th e Commis-sion then stayed the suspension for a probationary period of one year under certain conditions. Th e Commission found that Mr. NaPant, as qualifying broker and broker- in- charge of his own licensed fi rm, listed a home threatened with foreclosure, convinced an acquain-tance to invest $ 15,000 to bring the mortgage payments current and make improvements on the property, prom-just under $ 6,000 for the provisional broker’s services which included show-ing the buyers the house, contacting the seller on behalf of his buyers, and de-livering funds to the seller. Finally, the Commission found that after the buyers fi led a complaint with the Commission about the lease- purchase transaction, Ms. Pagano repeatedly failed to respond to Letters of Inquiry. WILLIAM T. PAGANO, III ( Wax-haw) – By Consent, the Commission suspended the broker license of Mr. Pa-gano for a period of one year eff ective May 1, 2009. Th e Commission then stayed the suspension for a probation-ary period of one year on certain condi-tions. Th e Commission found that Mr. Pagano, as a broker on provisional sta-tus, entered into a buyers’ agency agree-ment and continued to act as the buy-ers’ agent after the agreement expired including writing an off er on a property and assisting the buyers in a lease- pur-chase contract after the termination of the off er. Th e Commission also found that Mr. Pagano was paid a 2% fee of just under $ 6,000 for his services which included showing the buyers the house, contacting the seller on behalf of his buyers, and delivering funds to the seller. Finally, the Commission found that after the buyers fi led a complaint with the Commission about the lease-purchase transaction, Mr. Pagano re-peatedly failed to respond to Letters of Inquiry. HELEN W. PEE ( Charlotte) – By Consent, the Commission revoked the broker license of Ms. Pee eff ective Au-gust 13, 2009. Th e Commission found that Ms. Pee, as qualifying broker and broker- in- charge of a real estate broker-age fi rm, managed a residential rental property, but failed to deposit funds col-lected on behalf of the property owner into a trust account, failed to maintain and retain trust account records, and to maintain records in such a manner as to create a clear audit trail. Th e Commis-sion also found that Ms. Pee converted 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. ( See Disciplinary Action, page 15) DISCIPLINARY ACTION ( Continued from page 13) Real Estate Bulletin October 2009 15 approximately $ 600 of the property owner’s funds to her own use. MEN NESHIANNE PHILLIPS ( Rocky Mount) ��� By Consent, the Commission suspended the broker license of Ms. Phillips for a period of two years eff ective July 1, 2008. One year of the suspension was active with the remainder stayed for a probationary period of two years on certain condi-tions. Th e Commission found that Ms. Phillips, acting as both broker and loan offi cer in a transaction, created a false verifi cation of rent in order to assist her buyer in qualifying for a loan. Th e Commission also found that Ms. Phil-lips negotiated a higher interest rate for her buyer client to increase her income at the expense of her buyer and received a $ 1,900 yield spread premium when the loan closed. RONNIE B. RICKS ( Smithfi eld) – Th e Commission ordered the perma-nent revocation of the broker license of Mr. Ricks eff ective May 11, 2009. Th e Commission found that Mr. Ricks, in three transactions involving new con-struction homes and in which the buy-ers were introduced to the properties by the same unlicensed entity, failed to disclose to the lender the true purchase prices for the properties and misrepre-sented the purchase prices on contracts. Th e Commission also found that on the HUD- 1 closing statements Mr. Ricks misrepresented the true purchase contract prices, misrepresented that he owed monies, when he did not, for sec-ond mortgage payoff s and assignment fees to the unlicensed entity that intro-duced the buyers to the properties, and assisted the unlicensed entity in receiv-ing payment for conducting brokerage services. DON STEPHEN SCOTT ( Mur-phy) – By Consent, the Commission revoked the broker license of Mr. Scott eff ective July 13, 2009. Th e Commis-sion found that Mr. Scott was indicted in August, 2008 in U. S. District Court on one count of sending sexually explic-it photos of a minor via the Internet, 13 counts of receiving sexually explicit photos of a minor via the Internet and one count of possessing a computer containing sexually explicit photos of minors. Th e Commission further found that Mr. Scott pled guilty to all charges in December 2008, failed to report his conviction to the Commission as re-quired by Commission rule and failed to respond in a timely fashion to the Commission’s Letters of Inquiry. ABIGAIL SEYMOUR ( Charlotte) – Th e Commission accepted the volun-tary surrender of the broker license of Ms. Seymour for a period of fi ve years eff ective July 1, 2009. Th e Commission dismissed without prejudice allegations that Ms. Seymour had violated the Real Estate License Law and Commission rules. Ms. Seymour neither admitted nor denied misconduct. DEVERA S. SMITH ( Charlotte) – By Consent, the Commission suspend-ed the broker license of Ms. Smith for a period of one year eff ective December 1, 2008. Th e Commission found that Ms. Smith, became broker- in- charge of a sole proprietorship in 2005 and her employer’s broker license was revoked in 2005 for various trust account vio-lations; despite the revocation, her em-ployer continued to represent clients and Ms. Smith acted as a broker and accepted trust monies from clients, but failed to safeguard the funds received. SUNSHINE REALTY- PROPERTY MANAGEMENT ( Burlington) – By Consent, the Commission reprimanded Sunshine Realty- Property Management eff ective June 1, 2009. Th e Commis-sion found that Sunshine Realty- Prop-erty Management failed to maintain its trust account records as required by the Real Estate License Law and Com-mission rules. Th e Commission noted that Sunshine Realty- Property Manage-ment corrected all the violations noted with respect to its trust account records, there were no shortages, and no con-sumers were harmed as a result. DONNA A. TEELING ( Mount Holly) – Th e Commission revoked the broker license of Ms. Teeling eff ective July 13, 2009. Th e Commission found that Ms. Teeling certifi ed to the Com-mission in June 2006 that she possessed four years’ full- time experience as a bro-ker or salesperson to remove her license from provisional statusal when, in fact, she possessed less than three years’ expe-rience. Th e Commission also found that Ms. Teeling failed to respond to Letters of Inquiry from the Commission. PAXTON J. TUCKER ( Pawleys Island, South Carolina) – Th e Com-mission accepted the voluntary surren-der of the broker license of Mr. Tucker for a period of fi ve years eff ective July 1, 2009. Th e Commission dismissed without prejudice allegations that Mr. Tucker had violated the Real Estate Li-cense Law and Commission rules. Mr. Tucker neither admitted nor denied misconduct. GIDGETT M. WAY ( Mount Airy) – By Consent, the Commission rep-rimanded Ms. Way eff ective April 1, 2009. Th e Commission found that Ms. Way, broker- in- charge of a sole propri- ( See Disciplinary Action, page 16) DISCIPLINARY ACTION ( Continued from page 14) R esults E xam 0 55 110 165 220 275 Pass Fail April May June July August September 239 155 210 243 125 180 214 230 128 137 141 136 16 Real Estate Bulletin October 2009 etorship, listed a home located in Vir-ginia and represented on the MLS that it was a modular home with 1,800 heated square feet, relying on inaccurate data in a previous MLS listing and not mea-suring it herself; after entering a lease/ purchase agreement, buyers discovered that the home was a mobile home with 1,472 square feet, a diff erence of 22%. ANN WEEKS ( Asheville) – By Consent, the Commission suspended the broker license of Ms. Weeks for a period of six months eff ective Septem-ber 1, 2009. Th e Commission stayed the suspension for a probationary pe-riod of six months. Th e Commission found that Ms. Weeks listed a property in July 2006 which was served by a sep-tic system and advertised the property as having three bedrooms, but failed to verify that the property was permit-ted for three bedrooms. Th e Commis-sion further found that the buyer of the house discovered it had only been per-mitted for a two- bedroom home when attempting to sell the property several years after the purchase. AMY MARIE YOUNGERMAN ( Charlotte) – By Consent, the Com-mission suspended the broker license of Ms. Youngerman for a period two years eff ective January 26, 2009. Six months of the suspension were active with the remainder stayed for a proba-tionary period of four years on certain New Commission Web Site Address: www. ncrec. gov conditions. Th e Commission found that Ms. Youngerman, on or about Au-gust 13, 2008, pled guilty to and was convicted of Level 2 Impaired Driving, placed on probation for 24 months, and ordered to surrender her drivers license and obtain substance abuse assessment and recommended education or treat-ment. Th e Commission noted that Ms. Youngerman was convicted of of Level 4 Driving While Impaired in April 2006 while licensed as a real estate broker and timely reported the conviction, and Driving After Consuming Under 21 in 1998, which she disclosed on her 2003 license application. 86,500 copies of this public document were printed at a cost of .157 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 Safety Tip # 11 - LET THEM LEAD THE WAY • Be aware of possible escape routes • Leave doors open • Be wary in attics and basements • Walk behind your clients • Beware of dead- end streets Reprinted from the North Carolina Real Estate Agent Safety Guide. Safety Tip DISCIPLINARY ACTION ( Continued from page 15)
Object Description
Description
Title | Real estate bulletin. |
Date | 2009 |
Release Date | 2009-10 |
Description | Vol. 40, no. 2 (Oct. 2009) |
Digital Characteristics-A | 4 MB; 16 p. |
Digital Format |
application/pdf |
Full Text | licensed General Contractor in North Carolina. Knight is currently a director of the National Association of REALTORS ® , a past president and member of the board of directors of the North Caro-lina Association of REALTORS ® , and past president of the Chapel Hill Board Jordan and her husband, Max, a REALTOR ® and contractor, reside in Lincolnton and have one son, Jason, a student at the University of North Car-olina at Charlotte and a REALTOR ® . □ 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 0 • O c t o b e r 2 0 0 9 • N u m b e r 2 NORTRTH CACARAROROLINANA REREREALAL ESTATATATATE COMMISSION ESSE QUAUAMAM VIDERI REAL ESTATE LICENSE RENEWAL/ REINSTATEMENT License Number Licensee’s Signature Executive Director Pocket Card Gets New Look Page 6 overnor Beverly E. Perdue has appointed Everett “ Vic” Knight of Raleigh and Alice L. Mosteller of Lake Junaluska to the Real Estate Com-mission, it was announced by Phillip T. Fisher, Executive Director. Knight, a licensed broker since 1984, is also a certifi ed appraiser and the owner of Chapel Hill Appraisals and Consultants. He previously was broker/ owner of Century 21 Vic Knight Realty in Hillsborough for 10 years. A native of Burlington, Knight grad-uated from North Carolina State Uni-versity with a BS in Civil Engineering and worked internationally for Bechtel Corporation for several years. He was a New Commission Web Site Address: www. ncrec. gov arsha H. Jordan of Lincolnton has been elected Chairman of the North Carolina Real Estate Commission for the 2009- 2010 term be-ginning August 1, it was announced by Phillip T. Fisher, Executive Director. A graduate of the University of Vir-ginia ( MWC), Jordan entered the real estate business in 1986. She is owner of Apple Realty in Lin-colnton, a Graduate of the REALTOR ® Institute and holds the Certifi ed Resi-dential Broker, Certifi ed Residential Specialist, and GREEN designations. Appointed to the Commission in 1999, Jordan is past president of the North Carolina Real Estate Education Foundation and past president and 2001 REALTOR ® of the Year of the Lincoln County Board of REALTORS ® . Active in community aff airs, she is a former director of the Lincolnton Chamber of Commerce, past president for Downtown Development, and past president of the Lincolnton Rotary Club. Real Estate Commission member and former Chairman Wanda J. Proffi tt of Burnsville has resigned. A member of the Commission since 1994, Proffi tt was appointed by Gover-nor Perdue to the State Board of Trans-portation. Joe L. Hodge, Jr., of Raleigh, a mem-ber since 2006 and Vice Chairman, has also left the Commission. Commission members thanked Prof-fi tt and Hodge for their leadership and valued service to North Carolina. □ Commission Chairman Marsha H. Jor-dan received the Oath of Offi ce from Lieutenant Governor Walter H. Dalton. ollowing is a summary of pro-posed Commission rule changes which, if approved, would become ef-fective July 1, 2010: • Require retention of trust account and transaction records for a period of fi ve years instead of three as the current rules require. • Add questions to the Residential Property Disclosure Form for home sellers to disclose whether their proper-ties are located within one mile of the boundary of certain military facilities and to disclose noise, air traffi c, vibra- ( See Rules, page 6) ( See Appointed, page 7) Knight Mosteller 2 Real Estate Bulletin October 2009 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 profi ciency in real estate practice. The articles published herein shall not be reprinted or repro-duced in any other publication without specifi c reference being made to their original publication in the Commission’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 Marsha H. Jordan, Chairman Lincolnton Melvin L. Alston Greensboro Benjamin Cone, III Charlotte Everett “ Vic” Knight Raleigh Jeffery J. Malarney Manteo Jerry A. Mannen, Jr. Wilmington Alice L. Mosteller Lake Junaluska S. R. Rudd, Jr. Oak Island M. Rick Watts Fayetteville Phillip T. Fisher Executive Director ADMINISTRATION Mary Frances Whitley Director Paula L. Ricard Financial Offi cer Vickie R. Crouse Network Administrator Wendy C. Harper Administrative Offi cer Robert L. Forshaw Publications Offi cer Brenda H. Badger Information Services Offi cer AUDITS AND INVESTIGATIONS Emmet R. Wood Director Michael B. Gray Chief Auditor/ Investigator Gary R. Caddell Deputy Chief Auditor/ Investigator Jennifer K. Boger Sr. Auditor/ Investigator Rebecca S. Wilkins Sr. Auditor/ Investigator William F. Dowd Sr. Auditor/ Investigator Bart H. Allen Auditor/ Investigator M. Spier Holloman Auditor/ Investigator Pamela M. Vesper Auditor/ Investigator EDUCATION AND LICENSING Larry A. Outlaw Director Anita R. Burt Education/ Examination Offi cer Pamela R. Rorie Continuing Education Offi cer Patricia A. Moylan Legal Education Offi cer Lisa R. McQuillen Education/ Licensing Offi cer Matthew A. Wentz License Application Analyst LEGAL SERVICES Thomas R. Miller Legal Counsel, Director; Special Deputy Attorney General Miriam J. Baer Assistant Director, Legal Counsel Janet B. Thoren Chief Deputy Legal Counsel Charlene D. Moody Deputy Legal Counsel Stephen L. Fussell Sr. Consumer Protection Offi cer Joan H. Floyd Sr. Consumer Protection Offi cer Carolyn A. Haase Consumer Protection Offi cer Peter B. Myers Information Offi cer Elizabeth W. Penney Information Offi cer Jean A. Wolinski- Hobbs Information Offi cer Editor- In- Chief Phillip T. Fisher Editor Robert L. Forshaw 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 S U pdate People Appearances Th omas R. Miller, Special Deputy Attorney General, Director of Legal Services and Legal Counsel, spoke to the Cleveland County Association of REALTORS ® on Fair Housing issues. Janet B. Th oren, Chief Deputy Legal Counsel, spoke to the Advisory Board of the Bank Secrecy Act Coali-tion on issues related to mortgage fraud. Patricia A. Moylan, Legal Educa-tion Offi cer, addressed the Education Advisory Group of the Charlotte Re-gional REALTORS ® Association on rules regarding record maintenance, trust account and reporting require-ments, and broker- in- charge responsi-bilities. Betsey W. Penney, Information Of-fi cer, spoke to the Burlington- Alamance County Association of REALTORS ® and the Pamlico County Board of REAL-TORS ® . Jean Wolinski- Hobbs, Informa-tion Offi cer, spoke to the Harnett Area Board of REALTORS ® and was a pre-senter for a Property Management Up-date program at Wilmington for the North Carolina Association of REAL-TORS ® . Peter B. Myers has assumed the po-sition of Information Offi cer in the Le-gal Services Division. Myers is a graduate of Appalachian State University with a BS in Real Estate. Prior to joining the Com-mission, he was a real estate broker with York Simpson Un-derwood in Raleigh and was owner of Myers Appraisal Company. g Mo Ui t m Real Estate Bulletin October 2009 3 November 4 December 9 January 13 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 ommissionon COURSE SCHEDULES This schedule provides locations, dates, and times for the courses indicated through February, 2010. Register online at the Commission’s Web site, www. ncrec. gov. Broker- in- Charge Course Two- days. Day one, 1- 5 p. m.; Day two, 8: 30- 5: 30 p. m.) Basic Trust Account Procedures Course Charlotte December 8, 9 a. m. - 1 p. m. Holiday Inn Airport Raleigh November 3, 1 - 5 p. m. McKimmon Conference Center Asheville December 2, 3 February 23, 24 Holiday Inn East/ Blue Ridge Parkway Charlotte October 26, 27 December 7, 8 January 26, 27 Holiday Inn Airport Greensboro November 17, 18 February 16- 17 Clarion Hotel ( formerly the Radisson) Raleigh November 9, 10 December 14, 15 McKimmon Conference Center Wilmington January 20- 21 Coast Line Convention Center Confi rm dates and times at the Commission Web site. Scholarship winners ( seated, l. to r.) Nigel J. Terry, Dorothy Boudreaux Hays, and Th om-as R. Alexander hold plaques received at the August awards presentation. Th ey are joined by Commission members ( l. to r.) Jeff rey J. Malarney, Benjamin Cone, III, Joe L. Hodge, Jr., Chairman Marsha H. Jordan, Melvin L. “ Skip” Alston, Jerry A. Mannen, Jr., M. Rick Watts, and S. R. “ Buddy” Rudd, Jr. he Real Estate Commission recognized the outstanding aca-demic achievement of three brokers in REALTORS �� Institute courses. Nigel Terry of Raleigh received the Joe Schweidler Memorial Scholarship and Th omas Alexander of Havelock, the Blanton Little Memorial Scholarship. Both Schweidler and Little were former Executive Directors of the Commis-sion. Dorothy Boudreaux Hays of Mur-phy received the Phillip T. Fisher Schol-arship. Fisher is currently executive di-rector. Th e recipients were selected by the North Carolina Real Estate Education-al Foundation. □ 4 Real Estate Bulletin October 2009 North Carolina Partners with Federal Agencies in Builder Fraud Case, Nets $ 50 Million National Settlement ( Th e following is excerpted from ARELLO ® Boundaries, the newsletter to members of the Association of Real Estate License Law Offi cials.) T he North Carolina Real Estate Commission recently joined numerous federal agencies and the state's Commissioner of Banks in announcing the resolution of an inter- agency investigation of Beazer Homes, a home build-ing company based in Atlanta, Georgia, with operations in at least 21 states, and its wholly- owned subsidiary, Beazer Mortgage Corporation. In a criminal Bill of Information fi led along with a Deferred Prosecution Agree-ment resolving the case, the United States Attorney for the Western District of North Carolina ( Charlotte Division) charged the company with engaging in massive and complicated schemes that included discount point fraud, down payment as-sistance fraud, HUD- licensing fraud and mortgage loan stated- income fraud. In the Deferred Prosecution Agreement executed by the United States Attor-ney and Beazer, the company agreed to pay up to $ 50 million dollars in restitu-tion over several years. The announcement of the investigation and resolution of the case included public statements by offi cials of the many agencies involved in the investigation including U. S. Attorney Edward R. Ryan, HUD Secretary Shaun Donovan, the North Carolina Deputy Commissioner of Banks and North Carolina Real Estate Commission Deputy Chief Counsel Janet Thoren. Thoren said, “ The North Carolina Real Estate Commission is committed to the fi ght against mortgage fraud. We are pleased that we were able to partner with the U. S. Attorney's Offi ce in the Western District and each of the other agen-cies involved in this complicated and detailed investigation and work together to bring about a result that includes restitution to so many consumer victims, both in North Carolina and nationwide.” □ he Broker- in- Charge Guide, a valuable reference and re-source for the management of North Carolina real estate offi ces, has been updated and expanded. Th is 194- page volume features a lengthier discus-sion of licensee o m p e n s a t i o n with several pages of examples, plus updating of the requirements for maintaining and reinstating BIC eligibility under the new rules eff ective July 1, 2009. Orders may be placed for the book either online from the Publi-cations page or with printed forms available online or in this issue of the Bulletin to mail or fax. It is recommended that BICs with editions of the Guide dated 2006 or older ( see date at bottom of title page) purchase the newly up-dated volume. Th e Guide was fi rst published in November 2004. □ Allan R. Dameron Legal Internship Lindsey E. Wakely of Raleigh, a second year law student at the University of North Caro-lina, was the Allan R. Dameron Legal Intern for 2009. With her at the July Commission meeting are ( l. to r.) Commission members Jeff rey J. Malarney, S. R. “ Buddy” Rudd, Jr., M. Rick Watts, Chairman Melvin L. “ Skip” Alston, Vice Chair Marsha H. Jordan, Ben-jamin Cone, III, Wanda J. Proffi tt, Jerry A. Mannen, Jr., and Joe L. Hodge, Jr. Th e award is given annually in memory of and tribute to former Commission Chairman Dameron for his dedicated service in protecting the interests of North Carolina real estate consumers. l s c wo ur m �� Real Estate Bulletin October 2009 5 Course instructors approved ( for a total of 190) • 41 Broker- in- Charge Course sessions conducted for 2,027 li-censees Audits/ Investigations • 152 fi eld investigations completed • 196 trust accounts examined • 373 persons interviewed • 13 trust account sessions conducted for 310 students • 1,848 students instructed for trust ac-count portion of BIC course Legal • 1,037 case ( complaint) fi les opened and 1,101 closed • 33 licensees reprimanded • 70 licenses suspended • 70 licenses revoked • 20 licenses surrendered • 95 cases with conditional remedies □ • 209 expired, surrendered and suspended licenses reinstated • 2,243 Certifi cates of License History issued • 216 license applications reviewed by Commission for character issues • 106 license applicant conferences conducted Education • 7 new private real estate school licens-es issued and 66 renewed • 27 real estate instructors approved ( a 19% increase) and 109 renewed • 83 new continuing education elective courses approved ( for a total of 437 courses) • 28 new continuing education sponsors approved ( for a total of 231) • 13 new continuing education Update T he statistics here generally refl ect the activities of the Real Estate Commission during the period from May 1, 2008 to April 30, 2009. Contact • 246,609 telephone calls • 1.5 million+ Web site “ hits” Publications • 640,000+ publications distributed to brokers, consumers, applicants Technology • 8,645 student rosters electronically processed for CE courses and 859 for postlicensing courses Licensing • 457,468 license records changed • 5,663 applications processed for li-censes by examination • 5,273+ license examinations admin-istered • 2,993 licenses by examination issued • 339 licenses issued by reciprocity • 1,051 fi rm licenses issued New Commission Web Site Address: www. ncrec. gov here is a school of thought that it is not necessary to obtain a current survey when pur-chasing real estate-- that title insurance and affi davits from sellers suffi ciently protect the purchaser’s interests or that the purchaser can simply rely upon a previous survey. However, real estate agents should be aware that purchas-ers face potential problems typically re-ferred to as “ matters of survey” when a current fi eld survey of property is not performed. Matters of survey relate to anything that could negatively aff ect the use of property being purchased. Th ese in-clude, encroachments across property lines or building restriction lines; fenc-es/ walls, landscaping features, wells, swimming pool decks; the location of utilities, access ways, etc., relative to easements, property lines or buildings; the existence of fl ood zones; and other similar matters. It is possible that matters of sur-vey may be covered in title insurance policies. But coverage that protects the purchaser= s interests is unlikely to be included unless a survey is performed prior to issuance of the policy. ALender= s policies@ may cover matters of survey without requiring a current survey, but they do not protect the purchaser. Th e risk associated with lenders= policies is often acceptable to the title insurer be-cause claims from a lender are not likely to occur until the purchaser defaults on the loan. From Th e North Carolina Society of Surveyors, Inc. ( Reprinted from the March 2004 Real Estate Bulletin) In recent years, it has become popular to have the seller sign an affi davit eff ectively guaranteeing that no matters of survey negatively af-fect the property. However, in doing so, the seller may be unwittingly accepting some unwarranted risks of liability. Th e buyer may also be tempted to simply rely upon a survey document from a previous transaction, but such survey may not contemplate changes to the property since the earlier survey was performed. Many people choose not to obtain a current survey because they believe it will delay closing the transaction. Th is may be true if it is not ordered from the surveyor until closing of the transaction is assured. However, if the purchaser de-cides that a current survey is desired, it can be ordered early enough so as not to delay the closing date. An informed purchaser knows that an accurate, current survey will provide peace of mind that cannot be obtained from any other source. □ • s ce 6 Real Estate Bulletin October 2009 tions, lights and other impacts from nearby military facilities; • Allow postponement and comple-tion of continuing education, Broker-in- Charge, and postlicensing courses, and the payment of license renewal fees for individuals licensed as brokers and approved as instructors who are also members of the United States armed forces who are serving in combat or in presidentially- declared disaster areas. • Clarify when and under what cir-cumstances students in the Broker- in- Charge Course and in all continuing education courses may be absent during the scheduled classroom hours and still receive continuing education credit for attending the course. A public hearing for comments on the proposed rule changes will be held at 9: 00 a. m., February 10, 2010 in the Conference Room of the Commission’s offi ce. □ he pocket card you receive with your real estate license has been rede-signed to be more useful and better protected. Issuance of the new design began in June with renewals following depletion of existing card inventory. As shown, the card has a cover to shield the surface containing your name, license number and signature. Kept closed, it will prevent smudging. The opposite side of the cover contains Commission contact information for easy access along with a continuing education deadline reminder. □ General Contact Information • Information Services, Ext 772 • Licensing/ Education, Ext 776 • Legal Division, Ext 131 • Audits and Investigations, Ext 717 Reminders • Continuing Education Deadline: June 10 • Failure to renew will change license status and any BIC designation. North Carolina Real Estate Commission P. O. Box • Raleigh, NC - ( ) - • ncrec. gov NORTH CAROLINA REAL ESTATE LICENSE RENEWAL/ REINSTATEMENT License Number Licensee’s Signature Executive Director Inside cover By Charlene D. Moody Deputy Legal Counsel he Real Estate Commission often gets calls from licensees and homeowners seeking alterna-tive ways to bring about sales. One such method suggested by callers is to raffl e a home. The seller would sell raffl e tickets, the winning ticket- holder would receive the property, and the seller would receive the proceeds. In the past, the answer was clear that under North Carolina law, no real estate could be offered as a raffl e prize under any circumstance. How-ever, in May 2009, the N. C. General Assembly amended N. C. G. S. § 14- 309.15 to allow real property to be of-fered as a prize in a raffl e by certain organizations. The maximum appraised value of the real property to be raffl ed is $ 500,000 for any one prize and the ( Continued from page 1) total appraised value of all real estate prizes offered by one nonprofi t orga-nization may not exceed $ 500,000 in any one calendar year. Licensees must note that the stat-ute authorizes only nonprofi t organi-zations or government entities to con-duct raffl es. Sellers might ask if they would qualify if they donated a portion of the raffl e proceeds to a charity. However, the statute provides that the proceeds of the raffl e may not be used to com-pensate any person to conduct a raf-fl e. The Commission, therefore, takes the position that the seller may not re-ceive any part of the raffl e proceeds nor may a licensee receive any fee or commission from the raffl e proceeds. A person conducting a raffl e in vi-olation of N. C. G. S. § 14- 309.15 shall be guilty of a Class 2 misdemeanor. Additionally, licensees and the public should be aware that there may be surprising tax consequences of winning a real estate raffl e. Licens-ees should advise any participant in such a raffl e to consult a tax advisor concerning the tax consequences to the winner. For example, in the cur-rent tax year, the home may be re-portable as ordinary income, leading to a large income tax bill. Further, when the winner decides to sell the home, he or she may en-counter a large capital gains tax be-cause the cost basis for the home will be the ticket price rather than the value of the home. □ Real Estate Bulletin October 2009 7 he Commission’s North Caro-lina Real Estate License Law and Commission Rules book has been updat-ed and reprinted. Th is 92- page book is published as a convenient, portable reference and con-tains four sections: • North Carolina Real Estate Law • Commission Rules • Trust Account Guidelines • License Law and Rules Comments Th e Rules and Comments sections are current with the rule changes ef-fective July 1. Th e Comments section serves as a study guide for the initial li-censing examination. □ of REALTORS ® and the Triangle Mul-tiple Listing Service. He is a Continuing Education Instructor for the Real Estate Commission and the North Carolina Appraisal Board. Knight has two daughters, “ Krystle” Gray Knight, 23, and “ Victoria” Scarlet Knight, 16, and is a member of Hills-borough United Church of Christ. Mosteller is Vice President/ Man-aging Broker of the Beverly Hanks & Associates offi ce at Waynesville. She formerly owned Apple Realty, Inc., in Waynesville for 18 years until selling it to Beverly Hanks in 2004. A graduate of Appalachian State University, she taught at schools in North Carolina and Virginia for 20 years. She received her real estate license in 1984. She is a former Haywood County and North Carolina REALTOR ® of the year and a past president of the Hay-wood County Board of REALTORS ® Mosteller has two daughters, Debra Bryant, a Registered Nurse in Raleigh, and Paulette Childers, a broker at Bev-erly Hanks in Waynesville. □ Th e Honorable Sarah Parker, Chief Justice of the North Carolina Supreme Court, ( center) administered the Oath of Offi ce to Commission members Everett “ Vic” Knight and Alice L. Mosteller. North Carolina Real Estate License Law and Commission Rules ( Also including Trust Account Guidelines and Comments on the Law and Rules) Published by the North Carolina Real Estate Commission July 2009 $ 3.00 ( Continued from page 1) s part of the Real Estate Commission’s quality control program for its approved real estate schools and instructors, it monitors the per-formance of their students taking the license examination for the fi rst time within 180 days of course completion. Th e results are periodically reported to the schools/ instructors and annually reviewed by the Commission. Th e most recent annual performance record for each school may be found on the Com-mission’s website. During the July, 2008- June, 2009 reporting period, 72% of all fi rst- time candidates passed. Th e Commission congratulates the following schools and instructors ( which had six or more students tested) for having at least 80% of their students pass the license examination on their fi rst attempt: Schools Allen Tate School of Real Estate, Charlotte; Asheville- Buncombe Commu-nity College, Asheville/ Madison; Cape Fear Community College, Wilmington; Central Piedmont Community College, Charlotte/ Matthews/ Huntersville; Coastal Carolina Real Estate Academy, Wilmington; Cumbie Institute of Real Estate, Asheville; Galloway School of Real Estate, Hayesville/ Murphy; Min-gle School of Real Estate, Charlotte/ Cornelius; Mitchell Community College, Statesville/ Mooresville; Superior School of Real Estate, Charlotte/ Concord/ Cor-nelius/ Huntersville Instructors Oscar Agurs, Charlotte; Richard Barden, Franklin; Pete Camak, Pine Knoll Shores; Lowell Dotson, Matthews; Rick Fuller, Greensboro; Bill Gallagher, Charlotte; Frank Galloway, Andrews; Scott Gibson, Raleigh; Violet Harrington, Durham; Sandra Hubbard, Kittrell; Carolyn Lambert, Charlotte; Dwight Lawing, Jr., Parkton; Stephen Lawson, Winston- Salem; Saundra Martin, Salisbury; Terri Minnis, Wilmington; Brian Pate, Wake Forest; Laurel Pettys, Wilmington; Rashad Phillips, Charlotte; Bobby Potts, Asheville; Kevin Sensing, Goldsboro; Tim Terry, Charlotte; Jerry Th omas, Wrightsville Beach; Glenn Weeks, Holly Springs; Sandy Williams, Charlotte; Terry Wilson, Huntersville; Ben Wirtz, Iron Station □ 8 Real Estate Bulletin October 2009 September 23, 2009 Th e Federal Housing Finance Agency 1700 G Street, NW 4th Floor Washington, DC 20552 Dear Sir or Madam: To assist your agency in monitoring and evaluating the eff ectiveness of the Home Valuation Code of Conduct implemented May 1 by the U. S. Federal Home Loan Mortgage Corporation ( Freddie Mac) and the Federal National Mortgage Association ( Fannie Mae), the North Carolina Real Estate Commission has directed me to share with you its observations and experiences with regard to the Code and to respectfully off er its suggestions for improvement. Th e Real Estate Commission is a governmental agency charged with protecting the interests of real estate consumers in our State. Th e Commission recognizes and appreciates your eff orts through the Code to address some of the more egregious abuses visited upon the public by the unscrupulous acts of certain mortgage lenders. However, like your agency, we have found when adopting rules and implementing new legislation, some innocent misunderstandings and intentional attempts to exploit ambiguities in them are perhaps unavoidable. With regard to the Code, prospective homebuyers have complained to us that lenders assert that under “ new rules” the lenders must order appraisals through appraisal management companies. We have also received complaints from buyers, sellers and real estate agents that appraisers assigned by such companies to perform the appraisals are not familiar with or suffi ciently informed about the real estate market where the property is located to make accurate appraisals. We are, in fact, aware of cases where appraisers have traveled from other states and of cases where appraisers attempted to perform appraisals without consulting MLS sales data. Further, despite the apparent intent of the Code to distance lenders from the appraisal process, we have learned that some lenders own or have an ownership interest in the appraisal management companies they use. Although the Real Estate Commission does not at this time support a proposed moratorium on the continued implementation of the Code and we are aware that bulletins and other supplemental information about the Code have been published, it recommends for your agency’s consideration that the Home Valuation Code of Conduct itself be amended to: 1. Clarify that lenders need not engage appraisal management companies; 2. Prohibit lenders from engaging appraisal management companies which are owned, controlled by, or affi liated with the lender; 3. Expressly require lenders to engage, whether directly or indirectly, appraisers who are state- licensed and that the appraisals performed by such appraisers conform to the minimum requirements of state laws and rules and the Uniform Standards of Professional Appraisal Practice; and 4. Expressly require appraisers who are engaged to perform appraisals to be familiar with the market where the property is located and to have access to and use the best available data for that market in performing the appraisal. We hope our suggestions are received in the helpful spirit in which they are intended and that you will you not hesitate to contact our offi ce if we can be of any assistance to your agency with this or any related matter. Sincerely yours, North Carolina Real Estate Commission Editor’s Note: Th e recently implemented Home Valuation Code of Conduct is intended to enhance the independence and accuracy of the home appraisal process and provide added protections for homebuyers, mortgage investors and the housing market. In response to complaints from real estate consumers and brokers regarding the Code, the Real Estate Commission has announced its support for legislation requiring appraisal management companies operating in North Carolina to be regulated by the North Carolina Appraisal Board, and it directed that the following letter be sent to the Federal Housing Finance Agency. Home Valuation Code of Conduct Real Estate Bulletin October 2009 9 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 This form for free publications only. Free Publications Quantity Questions and Answers on: Fair Housing Tenant Security Deposits Condos and Townhouses Residential Subdivisions and Planned Communities Purchasing Coastal Real Estate in North Carolina Renting Residential Real Estate 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) NAME _____________________________________ ADDRESS __________________________________ CITY/ STATE/ ZIP _____________________________ Telephone______________ Email_______________ Please allow 7 days from receipt of order for delivery. How To Order: Mail or fax this form. Credit card: MasterCard or Visa only. Please do not remit cash. Online: www. ncrec. gov Select Publications on the Home page. Fax: 1- 866- 867- 3746 Mail to: Commission Publications, P. O. Box 28151, Raleigh, NC 27611 This form for purchasing publications only. NAME ___________________________________________ ADDRESS ________________________________________ CITY/ STATE/ ZIP ___________________________________ Telephone _________________ Email __________________ Credit card orders must be a minimum of $ 1.00. Signature: __________________________________________ Please allow 7 days from receipt of payment for delivery. MasterCard Visa Expiration Date Purchase Publications Quantity Totals Residential Square Footage Guidelines ($. 65 per copy) $ Working With Real Estate Agents ($. 25 per copy) $ Questions and Answers on: Home Inspections ($. 25 per copy) $ Earnest Money Deposts ($. 25 per copy) $ Real Estate Closings ($. 25 per copy) $ Offer and Acceptance ($. 25 per copy) $ Owning Vacation Rental Property ($. 25 per copy) $ Broker- in- Charge Guide ($ 10 per copy) $ North Carolina Real Estate License Law and Commission Rules ($ 3.00 per copy) $ Real Estate Agent Safety Guide ($. 25 per copy) $ Amount Enclosed $ 10 Real Estate Bulletin October 2009 Order Form NORTH CAROLINA REAL ESTATE MANUAL NAME ADDRESS Street ( NOT P. O. BOX) CITY/ STATE/ ZIP Telephone Email Single Manual @ $ 44.00* ( incl. Tax, Shipping) $ 44.00 Additional Manuals @ $ 39.00* each ( incl. Tax, Shipping) X $ Quantity TOTAL $ MasterCard Visa Exp Date Signature: * Manual sales price is $ 34.95 plus $ 2.45 sales tax plus shipping. Please allow 7 days from receipt of payment for delivery. 2008- 2009 Edition NORTH CAROLINA REAL ESTATE MANUAL Th 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. HOW TO ORDER: ONLINE Go to the Commission’s Web site, www. ncrec. gov, select “ Publications/ Bulletin” and click on NC Real Estate Manual to link directly with the book distributor. Follow the instructions for ordering using your MasterCard or Visa credit card. BY MAIL OR FAX Mail or fax an order form with payment. For credit card payments, only MasterCard and Visa are accepted. For checks, please send only cashier’s or certifi ed check or money order, payable to: North Carolina Real Estate Manual. ( Th e Manual sales price is $ 34.95 plus sales tax and shipping.) 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 NORTH CAROLINA REAL ESTATE MANUAL 2008- 2009 Edition Patrick K. Hetrick Larry A. Outlaw Patricia A. Moylan Published By The North Carolina Real Estate Commission Real Estate Bulletin October 2009 11 eff ective September 9, 2009. Th e Com-mission found that Mr. Blake, a broker-in- charge of a sole proprietorship, par-ticipated in mortgage fraud schemes in which he prepared false and infl ated ap-praisals of certain parcels of real prop-erty that were submitted to mortgage lenders who relied on his appraisals to determine the values of certain real properties which would be collateral for mortgage loans. JOHN MICHAEL BURTON ( Ca-tawba) – Th e Commission accepted the voluntary surrender of the broker license of Mr. Burton for a period of fi ve years eff ective August 13, 2009. Th e Commission dismissed without prejudice allegations that Mr. Burton violated provisions of the Real Estate License Law and Commission rules. Mr. Burton neither admitted nor de-nied misconduct. MARTHA LILIANA CAM-POVERDE ( Charlotte) – Th e Com-mission accepted the voluntary surren-der of the broker license of Ms. Cam-poverde eff ective May 28, 2009. Th e Commission dismissed without preju-dice allegations that Ms. Campoverde violated provisions of the Real Estate License Law and Commission rules. Ms. Campoverde neither admitted nor denied misconduct. DIANNE M. CARTER ( Mat-thews) – Th e Commission permanent-ly revoked the broker license of Ms. Carter eff ective August 18, 2009. Th e Commission found that Ms. Carter, as broker- in- charge, principal broker, and/ or treasurer of various real estate brokerage fi rms, failed to account for agency agreement with any party. BDF Realty released the option money from its trust account to the would- be op-tionor, but did not have an option con-tract executed by the parties. Th e Com-mission noted that BDF Realty, upon fi rst request of refund by the would- be optionee, refunded the would- be op-tionee $ 950. BEAZER/ SQUIRES REALTY, INC. ET. AL. ( Charlotte) – By Consent, the Commission revoked the fi rm license of Beazer/ Squires Realty, Inc., eff ective July 13, 2009. Th e Commission found that Beazer/ Squires Realty, Inc. sold new construction homes to consumers and that its parent company, Beazer Homes USA, was charged in the U. S. District Court of the Western District of North Carolina with one count of Mortgage Fraud Conspiracy and one count of Ac-counting Fraud Conspiracy for transac-tions that occurred in or about 2000 through 2007. HENRY C. BLAKE, JR. ( Riegel-wood) – By Consent, the Commission revoked the broker license of Mr. Blake Penalties for violations of the Real Estate 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 y RHONDA KAE AXHOJ ( Wax-haw) – By Consent, the Commission reprimanded Ms. Axhoj eff ective Oc-tober 1, 2009. Th e Commission found that Ms. Axhoj, broker- in- charge of her sole proprietorship, sold a property she owned and signed an incorrect closing statement indicating the buyer paid a $ 2,000 earnest money deposit to her, when the buyer had not, in the belief that the buyer would pay the deposit after closing. Ms. Axhoj attempted to collect the $ 2,000 after closing but the buyer did not pay it. JACOB O. BALOGUN ( Fayette-ville) – By Consent, the Commission suspended the broker license of Mr. Ba-logun for a period of one year eff ective May 1, 2009. One month of the sus-pension was active with the remainder stayed for a probationary period of 11 months. Th e Commission found that the N. C. State Board of Certifi ed Pub-lic Accountant Examiners revoked Mr. Balogun’s CPA license in 2008, the re-vocation stemming from a violation of a six- month suspension of his CPA license in 2006, and that Mr. Balogun had failed to inform the Commission of either disciplinary action. BDF REALTY, INC. ( Charlotte) – By Consent, the Commission sus-pended the fi rm license of BDF Realty for a period of one year eff ective June 10, 2008. Th irty days of the suspension were active with the remainder stayed for a probationary period of one year. Th e Commission found that BDF Real-ty received $ 950 which was intended to be used as option money. Th e Commis-sion further found that BDF Realty had a verbal property management agree-ment with the owner, but no written ( See Disciplinary Action, page 12) Write LicenseYour Number On All Contracts Disclosures and 12 Real Estate Bulletin October 2009 Ms. Feeley certifi ed in July 2007 that she had four years full time, active expe-rience as a real estate broker or salesper-son, thereby causing the Commission to remove her from provisional license status, when in fact her license had only been active for a total of only two years and 11 months. Th e Commission noted that prior to activation of her license she had worked in home sales for a builder developer in a capacity exempt from licensure. Ms. Feeley’s license was re-turned to provisional status until June 10, 2009, by which time she had com-pleted a 30- hour post- licensing course. RONALD S. FERRELL ( Corne-lius) – By Consent, the Commission suspended the broker license of Mr. Ferrell for a period of two years eff ective May 1, 2009. Th irty days of the sus-pension were active with the remainder stayed for two years. Th e Commission found that Mr. Ferrell, a certifi ed ap-praiser from 2001 to 2004, surrendered his appraisal certifi cate to the North Carolina Appraisal Board in a consen-sual arrangement with the Board in the face of allegations that he had violated provisions of the appraiser licensing statutes and the Uniform Standards of Professional Appraisal Practice. BRETT DAVID FURNISS ( Char-lotte) – By Consent, the Commission suspended the broker license of Mr. Furniss for a period of one year eff ective June 10, 2009. Th irty days of the sus-pension were active with the remainder stayed for a probationary period of one year. Th e Commission found that Mr. Furniss, broker- in- charge of a real estate brokerage fi rm, received $ 950 intended as option money. Th e Commission fur-ther found that Mr. Furniss had a verbal property management agreement with the owner, but no written agency agree-ment with any party. Mr. Furniss re-leased the option money from his trust account to the would- be optionor, but did not have an option contract execut-ed by the parties. Th e Commission not-ed that Mr. Furniss, upon fi rst request or to remit monies coming into her possession which belonged to another. Th e Commission also found that Ms. Carter scheduled withdrawals to herself without authorization from her princi-pal, failed to turn over rental proceeds, failed to maintain rental proceeds in a trust account, and failed to make her trust account records available for in-spection by the Commission. BECKY PERRY CODER ( Char-lotte) – Th e Commission accepted the permanent voluntary surrender of the broker license of Ms. Coder eff ective October 1, 2009. Th e Commission dismissed without prejudice allegations that Ms. Coder had violated the Real Estate Law and Commission rules. Ms. Coder neither admitted nor denied misconduct. CREATIVE BUYERS NET-WORK, LLC ( Charlotte) – By Con-sent, the Commission reprimanded Creative Buyers Network eff ective July 1, 2009. Th e Commission found that Creative Buyers Network, a licensed real estate brokerage fi rm, listed a home threatened with foreclosure, and that its broker- in- charge convinced an ac-quaintance to invest $ 15,000 to bring the mortgage payments current and make improvements on the property. Th e Commission further found that the broker- in- charge fi lled out a promisso-ry note between the seller and investor and included Creative Buyers Network as trustee but that Creative Buyers Net-work failed to deposit the funds into its trust account. JOSEPH F. DAVIS, JR. ( Burling-ton) – By Consent, the Commission reprimanded Mr. Davis eff ective June 1, 2009. Th e Commission found that Mr. Davis, broker- in- charge of a real estate brokerage fi rm, failed to maintain his trust account records as required by the Real Estate License Law and Commis-sion rules. Th e Commission noted that Mr. Davis corrected all the violations noted with respect to his trust account records, there were no shortages, and no consumers were harmed as a result. MARTIN J. EVANS ( Hampstead) – By Consent, the Commission sus-pended the broker license of Mr. Ev-ans for a period of three years eff ective November 1, 2008. Six months of the suspension were active with the remain-der stayed for a probationary period of 30 months on certain conditions. Th e Commission found that Mr. Evans, qualifying broker and broker- in- charge of a real estate brokerage fi rm, listed a personal rental home and lot and adver-tised it in the MLS as being located in in a federal fl ood zone, but specifi cally not a COBRA zone, when in fact it was. Buyers of the property demolished the house, intending to build a new home, and then discovered that the property was in a COBRA zone and federal fl ood insurance was not available for a new structure. KELLY A. FEELEY ( Charlotte) – By Consent, the Commission repri-manded Ms. Feeley eff ective January 14, 2009. Th e Commission found that 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 Com-mission’s Legal Services Division at 919- 875- 3700 for more infor-mation. DISCIPLINARY ACTION ( Continued from page 11) ( See Disciplinary Action, page 13) Real Estate Bulletin October 2009 13 payments from the buyer to the seller on the undisclosed loan. JAMES M. MADAGAN ( Char-lotte) – By Consent, the Commission revoked the broker license of Mr. Mad-agan eff ective October 8, 2009. Th e Commission found that Mr. Madagan, as a broker with resort real estate devel-oper, became the custodian of a resort club new member initiation fees and failed the hold the money in a trust account and converted in excess of $ 700,000 of the money to his own use. Th e Commission noted that Mr. Mada-gain entered into an agreement to repay the money but has failed to make full restitution as of this date. PAUL DEVON MAXWELL ( Lew-isville) – By Consent, the Commis-sion revoked the broker license of Mr. Maxwell eff ective October 8, 2009. Th e Commission found that Mr. Maxwell, as broker and rental agent for the owner of a rental property, procured a tenant and collected $ 1,800 for rent and se-curity deposit, but failed to deposit the money into an escrow account, and in-stead gave the money to his girlfriend. Th e Commission also found that Mr. Maxwell, whose license had expired at the time of the transaction, did not account for or remit the money to his landlord client or to the tenant. FRANK T. MCCOY, JR. ( Albe-marle) – By Consent, the Commission suspended the broker license of Mr. McCoy for a period of six months eff ec-tive October 1, 2009. Th e Commission then stayed the suspension for a proba-tionary period of one year eff ective Oc-tober 1, 2009. Th e Commission found that Mr. McCoy managed a property but failed to obtain a written property management agreement with the owner or written lease agreement with the ten-ants. Th e Commission also found that Mr. McCoy failed to maintain his trust accounts in compliance with the Li-cense Law and Commission rules. Th e Commission noted that Mr. McCoy pended the fi rm license of DR Horton for a period of one year eff ective May 1, 2008. Th e Commission then stayed the suspension for a probationary pe-riod of two years on certain conditions. Th e Commission found that former employees of DR Horton sold 14 new construction homes to buyers and paid fees to unlicensed persons and entities for producing the buyers in these trans-actions. ELBERTA L. JONES ( Manson) – By Consent, the Commission sus-pended the broker license of Ms. Jones for a period of one year eff ective March 1, 2009. Th ree months of the suspen-sion were active with the remainder stayed for a probationary period of nine months on certain conditions. Th e Commission found that Ms. Jones, who listed and sold a property for her seller clients, witnessed a promissory note ex-ecuted by the buyer at closing in which the buyer agreed to repay a loan from the seller, but did not inform the clos-ing attorney about the loan, which was not shown on the closing statement or otherwise disclosed to the lender. Th e Commission also found that after clos-ing Ms. Jones acted as a conduit for of refund by the would- be optionee, refunded the would- be optionee $ 950. MARK GAGLIARDI ( Greenville) – Th e Commission accepted the volun-tary surrender of the broker license of Mr. Gagliardi for a period of fi ve years eff ective August 1, 2009. Th e Commis-sion dismissed without prejudice allega-tions that Mr. Gagliardi violated provi-sions of the Real Estate License Law and Commission rules. Mr. Gagliardi neither admitted nor denied miscon-duct. JON C. GILLMAN ( Charlotte) – Th e Commission accepted the volun-tary surrender of the broker license of Mr. Gillman for a period of fi ve years eff ective July 1, 2009. Th e Commission dismissed without prejudice allegations that Mr. Gillman violated provisions of the Real Estate License Law and Com-mission rules. Mr. Gillman neither ad-mitted nor denied misconduct. GTC REALTY, INC. ( Waxhaw) – By Consent, the Commission rep-rimanded GTC Realty eff ective May 1, 2009. Th e Commission found that GTC Realty entered into a buyers’ agency agreement with a husband and wife and continued to act as a buyers��� agent after the agreement expired in-cluding writing an off er on a property and assisting the buyers in a lease- pur-chase contract. Th e Commission also found that GTC Realty was paid a 2% fee of just under $ 6,000 for its services which included showing the clients the house, contacting the seller on behalf of its clients, and delivering funds to the seller. Finally, the Commission found that after the clients fi led a complaint with the Commission about the lease-purchase transaction, GTC Realty re-peatedly failed to respond to Letters of Inquiry. DR HORTON, INC. ( Charlotte) – By Consent, the Commission sus- DISCIPLINARY ACTION ( Continued from page 12) ( See Disciplinary Action, page 14) Receive Credit Where and When Credit is Due! When continuing education sponsors fail to report credits to the Commission in a timely man-ner, licensees may fi nd them-selves 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. Similarly, if you completed your CE online, verify that your sponsor submitted your affada-vit to the Commission in time for your CE record to be updated. 14 Real Estate Bulletin October 2009 ised a 20% return on the funds at clos-ing and represented that he had a buyer waiting to close. Th e Commission fur-ther found that Mr. NaPant fi lled out a promissory note between the seller and investor and included himself as prom-issor and his fi rm as trustee but failed to deposit the funds into his trust ac-count. Th e Commission further found that Mr. NaPant, after the contracted sale fell through, failed to repay the in-vestor’s money and the home fell into foreclosure again. DEBRA PAGANO ( Waxhaw) – By Consent, the Commission suspended the broker license of Ms. Pagano for a period of one year eff ective May 1, 2009. Th e Commission then stayed the suspension for a probationary period of one year on certain conditions. Th e Commission found that Ms. Pagano, qualifying broker and broker- in- charge of her licensed fi rm, supervised a provi-sional broker in the fi rm, who entered into a buyers’ agency agreement and continued to act as the buyers’ agent after the agreement expired including writing an off er on a property and assist-ing the buyers in a lease- purchase con-tract. Th e Commission also found that Ms. Pagano’s fi rm was paid a 2% fee of has since taken the Basic Trust Account Course and brought his books and re-cords into compliance. MOUNTAIN LIFESTYLES, LLC ( Asheville) – By Consent, the Com-mission reprimanded Mountain Life-styles eff ective September 1, 2009. Th e Commission found that Mountain Lifestyles, a real estate brokerage fi rm, listed in July 2006 a property which was served by a septic system and ad-vertised the property as having three bedrooms, but failed to verify that the property was permitted for three bed-rooms. Th e Commission further found that the buyer of the house discovered it had only been permitted for a two-bedroom home when attempting to sell the property several years after the purchase. MYREALTY CONSULTANTS & MANAGEMENT, INC. ( Charlotte) – By Consent, the Commission revoked the fi rm license of MyRealty Consul-tants & Management eff ective August 13, 2009. Th e Commission found that MyRealty Consultants & Management managed a residential rental property, but failed to deposit funds collected on behalf of the property owner into a trust account, failed to maintain and retain trust account records, and to maintain records in such a manner as to create a clear audit trail. EZEKIAS R. NAPANT ( Char-lotte) – By Consent, the Commission suspended the broker license of Mr. NaPant for a period of one year eff ec-tive September 1, 2009. Th e Commis-sion then stayed the suspension for a probationary period of one year under certain conditions. Th e Commission found that Mr. NaPant, as qualifying broker and broker- in- charge of his own licensed fi rm, listed a home threatened with foreclosure, convinced an acquain-tance to invest $ 15,000 to bring the mortgage payments current and make improvements on the property, prom-just under $ 6,000 for the provisional broker’s services which included show-ing the buyers the house, contacting the seller on behalf of his buyers, and de-livering funds to the seller. Finally, the Commission found that after the buyers fi led a complaint with the Commission about the lease- purchase transaction, Ms. Pagano repeatedly failed to respond to Letters of Inquiry. WILLIAM T. PAGANO, III ( Wax-haw) – By Consent, the Commission suspended the broker license of Mr. Pa-gano for a period of one year eff ective May 1, 2009. Th e Commission then stayed the suspension for a probation-ary period of one year on certain condi-tions. Th e Commission found that Mr. Pagano, as a broker on provisional sta-tus, entered into a buyers’ agency agree-ment and continued to act as the buy-ers’ agent after the agreement expired including writing an off er on a property and assisting the buyers in a lease- pur-chase contract after the termination of the off er. Th e Commission also found that Mr. Pagano was paid a 2% fee of just under $ 6,000 for his services which included showing the buyers the house, contacting the seller on behalf of his buyers, and delivering funds to the seller. Finally, the Commission found that after the buyers fi led a complaint with the Commission about the lease-purchase transaction, Mr. Pagano re-peatedly failed to respond to Letters of Inquiry. HELEN W. PEE ( Charlotte) – By Consent, the Commission revoked the broker license of Ms. Pee eff ective Au-gust 13, 2009. Th e Commission found that Ms. Pee, as qualifying broker and broker- in- charge of a real estate broker-age fi rm, managed a residential rental property, but failed to deposit funds col-lected on behalf of the property owner into a trust account, failed to maintain and retain trust account records, and to maintain records in such a manner as to create a clear audit trail. Th e Commis-sion also found that Ms. Pee converted 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. ( See Disciplinary Action, page 15) DISCIPLINARY ACTION ( Continued from page 13) Real Estate Bulletin October 2009 15 approximately $ 600 of the property owner’s funds to her own use. MEN NESHIANNE PHILLIPS ( Rocky Mount) ��� By Consent, the Commission suspended the broker license of Ms. Phillips for a period of two years eff ective July 1, 2008. One year of the suspension was active with the remainder stayed for a probationary period of two years on certain condi-tions. Th e Commission found that Ms. Phillips, acting as both broker and loan offi cer in a transaction, created a false verifi cation of rent in order to assist her buyer in qualifying for a loan. Th e Commission also found that Ms. Phil-lips negotiated a higher interest rate for her buyer client to increase her income at the expense of her buyer and received a $ 1,900 yield spread premium when the loan closed. RONNIE B. RICKS ( Smithfi eld) – Th e Commission ordered the perma-nent revocation of the broker license of Mr. Ricks eff ective May 11, 2009. Th e Commission found that Mr. Ricks, in three transactions involving new con-struction homes and in which the buy-ers were introduced to the properties by the same unlicensed entity, failed to disclose to the lender the true purchase prices for the properties and misrepre-sented the purchase prices on contracts. Th e Commission also found that on the HUD- 1 closing statements Mr. Ricks misrepresented the true purchase contract prices, misrepresented that he owed monies, when he did not, for sec-ond mortgage payoff s and assignment fees to the unlicensed entity that intro-duced the buyers to the properties, and assisted the unlicensed entity in receiv-ing payment for conducting brokerage services. DON STEPHEN SCOTT ( Mur-phy) – By Consent, the Commission revoked the broker license of Mr. Scott eff ective July 13, 2009. Th e Commis-sion found that Mr. Scott was indicted in August, 2008 in U. S. District Court on one count of sending sexually explic-it photos of a minor via the Internet, 13 counts of receiving sexually explicit photos of a minor via the Internet and one count of possessing a computer containing sexually explicit photos of minors. Th e Commission further found that Mr. Scott pled guilty to all charges in December 2008, failed to report his conviction to the Commission as re-quired by Commission rule and failed to respond in a timely fashion to the Commission’s Letters of Inquiry. ABIGAIL SEYMOUR ( Charlotte) – Th e Commission accepted the volun-tary surrender of the broker license of Ms. Seymour for a period of fi ve years eff ective July 1, 2009. Th e Commission dismissed without prejudice allegations that Ms. Seymour had violated the Real Estate License Law and Commission rules. Ms. Seymour neither admitted nor denied misconduct. DEVERA S. SMITH ( Charlotte) – By Consent, the Commission suspend-ed the broker license of Ms. Smith for a period of one year eff ective December 1, 2008. Th e Commission found that Ms. Smith, became broker- in- charge of a sole proprietorship in 2005 and her employer’s broker license was revoked in 2005 for various trust account vio-lations; despite the revocation, her em-ployer continued to represent clients and Ms. Smith acted as a broker and accepted trust monies from clients, but failed to safeguard the funds received. SUNSHINE REALTY- PROPERTY MANAGEMENT ( Burlington) – By Consent, the Commission reprimanded Sunshine Realty- Property Management eff ective June 1, 2009. Th e Commis-sion found that Sunshine Realty- Prop-erty Management failed to maintain its trust account records as required by the Real Estate License Law and Com-mission rules. Th e Commission noted that Sunshine Realty- Property Manage-ment corrected all the violations noted with respect to its trust account records, there were no shortages, and no con-sumers were harmed as a result. DONNA A. TEELING ( Mount Holly) – Th e Commission revoked the broker license of Ms. Teeling eff ective July 13, 2009. Th e Commission found that Ms. Teeling certifi ed to the Com-mission in June 2006 that she possessed four years’ full- time experience as a bro-ker or salesperson to remove her license from provisional statusal when, in fact, she possessed less than three years’ expe-rience. Th e Commission also found that Ms. Teeling failed to respond to Letters of Inquiry from the Commission. PAXTON J. TUCKER ( Pawleys Island, South Carolina) – Th e Com-mission accepted the voluntary surren-der of the broker license of Mr. Tucker for a period of fi ve years eff ective July 1, 2009. Th e Commission dismissed without prejudice allegations that Mr. Tucker had violated the Real Estate Li-cense Law and Commission rules. Mr. Tucker neither admitted nor denied misconduct. GIDGETT M. WAY ( Mount Airy) – By Consent, the Commission rep-rimanded Ms. Way eff ective April 1, 2009. Th e Commission found that Ms. Way, broker- in- charge of a sole propri- ( See Disciplinary Action, page 16) DISCIPLINARY ACTION ( Continued from page 14) R esults E xam 0 55 110 165 220 275 Pass Fail April May June July August September 239 155 210 243 125 180 214 230 128 137 141 136 16 Real Estate Bulletin October 2009 etorship, listed a home located in Vir-ginia and represented on the MLS that it was a modular home with 1,800 heated square feet, relying on inaccurate data in a previous MLS listing and not mea-suring it herself; after entering a lease/ purchase agreement, buyers discovered that the home was a mobile home with 1,472 square feet, a diff erence of 22%. ANN WEEKS ( Asheville) – By Consent, the Commission suspended the broker license of Ms. Weeks for a period of six months eff ective Septem-ber 1, 2009. Th e Commission stayed the suspension for a probationary pe-riod of six months. Th e Commission found that Ms. Weeks listed a property in July 2006 which was served by a sep-tic system and advertised the property as having three bedrooms, but failed to verify that the property was permit-ted for three bedrooms. Th e Commis-sion further found that the buyer of the house discovered it had only been per-mitted for a two- bedroom home when attempting to sell the property several years after the purchase. AMY MARIE YOUNGERMAN ( Charlotte) – By Consent, the Com-mission suspended the broker license of Ms. Youngerman for a period two years eff ective January 26, 2009. Six months of the suspension were active with the remainder stayed for a proba-tionary period of four years on certain New Commission Web Site Address: www. ncrec. gov conditions. Th e Commission found that Ms. Youngerman, on or about Au-gust 13, 2008, pled guilty to and was convicted of Level 2 Impaired Driving, placed on probation for 24 months, and ordered to surrender her drivers license and obtain substance abuse assessment and recommended education or treat-ment. Th e Commission noted that Ms. Youngerman was convicted of of Level 4 Driving While Impaired in April 2006 while licensed as a real estate broker and timely reported the conviction, and Driving After Consuming Under 21 in 1998, which she disclosed on her 2003 license application. 86,500 copies of this public document were printed at a cost of .157 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 Safety Tip # 11 - LET THEM LEAD THE WAY • Be aware of possible escape routes • Leave doors open • Be wary in attics and basements • Walk behind your clients • Beware of dead- end streets Reprinted from the North Carolina Real Estate Agent Safety Guide. Safety Tip DISCIPLINARY ACTION ( Continued from page 15) |
OCLC number | 7578201 |