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North Carolina Real Estate License Law and Commission Rules 1 Section 93A-1 License required of real estate brokers. 93A-2 Defi nitions and exceptions. 93A-3 Commission created; compensation; organi-za tion. 93A-4 Applications for licenses; fees; qualifi caions; examina tions; privilege licenses; re new al or reinstate ment of license; power to en force provisions. 93A-4.1 Continuing education. 93A-4.2 Broker-in-charge qualifi cation. 93A-4.3 Elimination of salesperson license; conver-sion of salesperson license to broker licenses. 93A-5 Register of applicants; roster of brokers; fi nan-cial report to Secretary of State. 93A-6 Disciplinary action by Commission. 93A-6.1 Commission may subpoena witnesses, re-cords, documents, or other materials. 93A-7 Power of courts to revoke. 93A-8 Penalty for violation of Chapter. 93A-9 Licensing nonresidents. 93A-10 Nonresident licensees; fi ling of consent as to service of process and pleadings. 93A-11 Reimbursement by real estate independent contractor of brokers’ workers’ compensation. 93A-12 Disputed Monies 93A-13 to 93A-15 [Reserved.] Section 93A-16 Real Estate Recovery Fund created; payment to fund; management. 93A-17 Grounds for payment; notice and application to Commission. 93A-18 Hearing; required showing. 93A-19 Response and defense by Commission and judgment debtor; proof of conversion. 93A-20 Order directing payment out of fund; com-promise of claims. 93A-21 Limitations; pro rata distribution; attorney fees. 93A-22 Repayment to fund; automatic suspension of license. 93A-23 Subrogation of rights. 93A-24 Waiver of rights. 93A-25 Persons ineligible to recover from fund. 93A-26 Disciplinary action against licensee. 93A-27 to 93A-31 [Reserved] Section 93A-39 Title. 93A-40 Registration required of time share projects; real estate salespersons license required. 93A-41 Defi nitions. 93A-42 Time shares deemed real estate. 93A-43 Partition. 93A-44 Public off ering statement. 93A-45 Purchaser’s right to cancel; escrow; viola tion. 93A-46 Prizes. 93A-47 Time shares proxies. 93A-48 Exchange programs. 93A-49 Service of process on exchange company. 93A-50 Securities laws apply. 93A-51 Rule-making authority. 93A-52 Application for registration of time share project; denial of registration; renewal; rein statement; and termina tion of developer’s in terest. 93A-53 Register of applicants; roster of registrants; registered projects; fi nancial report to Secre-tary of State. 93A-54 Disciplinary action by Commission. 93A-55 Private enforcement. 93A-56 Penalty for violation of Article. 93A-57 Release of liens. 93A-58 Registrar required; criminal penalties; project broker. 93A-59 Preservation of time share purchaser’s claims and defenses. 93A-60 to 93A-69 [Reserved] 2 North Carolina Real Estate License Law and Commission Rules 93A-1. License required of real estate brokers. From and after July 1, 1957, it shall be unlawful for any per-son, partnership, corporation, limited liability company, as-sociation, or other business entity in this State to act as a real estate broker, or directly or indirectly to engage or assume to engage in the business of real estate broker or to adver-tise or hold himself or herself or themselves out as engaging in or conducting such business without fi rst obtaining a li-cense issued by the North Carolina Real Estate Commission (hereinafter referred to as the Commission), under the pro-visions of this Chapter. A license shall be obtained from the Commission even if the person, partnership, corporation, limited liability company, association, or business entity is licensed in another state and is affi liated or otherwise associ-ated with a licensed real estate broker in this State. 93A-2. Defi nitions and exceptions. (a) A real estate broker within the meaning of this Chapter is any person, partnership, corporation, limited liabil-ity company, association, or other business entity who for a compensation or valuable consideration or prom-ise thereof lists or off ers to list, sells or off ers to sell, buys or off ers to buy, auctions or off ers to auction (specifi cal-ly not including a mere crier of sales), or negotiates the purchase or sale or exchange of real estate, or who leas-es or off ers to lease, or who sells or off ers to sell leases of whatever character, or rents or off ers to rent any real es-tate or the improvement thereon, for others. (a1) Th e term broker-in-charge within the meaning of this Chapter shall mean a real estate broker who has been designated as the broker having responsibility for the supervision of real estate salespersons engaged in real estate brokerage at a particular real estate offi ce and for other administrative and supervisory duties as the Commission shall prescribe by rule. (a2) Th e term provisional broker within the meaning of this Chapter means a real estate broker who, pending ac-quisition and documentation to the Commission of the education or experience prescribed by either G.S. 93A-4(a1) or G.S. 93A-4.3, must be supervised by a broker-in-charge when performing any act for which a real estate license is required. (b) Th e term real estate salesperson within the meaning of this Chapter shall mean and include any person who was formerly licensed by the Commission as a real es-tate salesperson before April 1, 2006. (c) Th e provisions of this Chapter shall not apply to and shall not include: (1) Any person, partnership, corporation, limited liabil-ity company, association, or other business entity who, as owner or lessor, shall perform any of the acts aforesaid with reference to property owned or leased by them, where the acts are performed in the regular course of or as incident to the management of that property and the investment therein. (2) Any person acting as an attorney-in-fact under a duly executed power of attorney from the owner autho-rizing the fi nal consummation of performance of any contract for the sale, lease or exchange of real estate. (3) Th e acts or services of an attorney-at-law. (4) Any person, while acting as a receiver, trustee in bankruptcy, guardian, administrator or executor or any person acting under order of any court. (5) Any person, while acting as a trustee under a trust agreement, deed of trust or will, or his or her regular salaried employees. (6) Any salaried person employed by a licensed real es-tate broker, for and on behalf of the owner of any real estate or the improvements thereon, which the licensed broker has contracted to manage for the owner, if the salaried employee is limited in his or her employment to: exhibiting units on the real es-tate to prospective tenants; providing the prospec-tive tenants with information about the lease of the units; accepting applications for lease of the units; completing and executing preprinted form leases; and accepting security deposits and rental payments for the units only when the deposits and rental pay-ments are made payable to the owner or the bro-ker employed by the owner. Th e salaried employ-ee shall not negotiate the amount of security depos-its or rental payments and shall not negotiate leases or any rental agreements on behalf of the owner or broker. (7) Any owner who personally leases or sells his or her own property. (8) Any housing authority organized in accordance with the provisions of Chapter 157 of the General Stat-utes and any regular salaried employees of the hous-ing authority when performing acts authorized in this Chapter as to any property owned or leased by the housing authority. Th is exception shall not ap-ply to any person, partnership, corporation, limited liability company, association, or other business en-tity that contracts with a housing authority to sell or manage property owned or leased by the hous-ing authority. North Carolina Real Estate License Law and Commission Rules 3 93A-3. Commission created; compensation; organization. (a) Th ere is hereby created the North Carolina Real Es-tate Commission, hereinafter called the Commission. Th e Commission shall consist of nine members, sev-en members to be appointed by the Governor, one member to be appointed by the General Assembly upon the recommendation of the President Pro Tem-pore of the Senate in accordance with G.S. 120-121, and one member to be appointed by the General As-sembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121. At least three members of the Commission shall be licensed real estate brokers. At least two mem-bers of the Commission shall be persons who are not involved directly or indirectly in the real estate or real estate appraisal business. Members of the Commission shall serve three-year terms so staggered that the terms of three members expire in one year, the terms of three members expire in the next year, and the terms of three members expire in the third year of each three-year pe-riod. Th e members of the Commission shall elect one of their members to serve as chairman of the Commis-sion for a term of one year. Th e Governor may re-move any member of the Commission for misconduct, incompetency, or willful neglect of duty. Th e Gover-nor shall have the power to fi ll all vacancies occurring on the Commission, except vacancies in legislative ap-pointments shall be fi lled under G.S. 120-122. (b) Th e provisions of G.S. 93B-5 notwithstanding, members of the Commission shall receive as compensation for each day spent on work for the Commission a per diem in an amount established by the Commission by rule, and mileage reimbursement for transportation by private-ly owned automobile at the business standard mileage rate set by the Internal Revenue Service per mile of trav-el along with actual cost of tolls paid. Th e total expense of the administration of this Chapter shall not exceed the total income therefrom; and none of the expenses of said Commission or the compensation or expenses of any of-fi ce thereof or any employee shall ever be paid or pay-able out of the treasury of the State of North Carolina; and neither the Commission nor any offi cer or employee thereof shall have any power or authority to make or in-cur any expense, debt or other fi nancial obligation bind-ing upon the State of North Carolina. After all expenses of operation, the Commission may set aside an expense reserve each year. Th e Commission may deposit moneys in accounts, certifi cates of deposit, or time deposits as the Commission may approve, in any bank, savings and loan association, or trust company. Moneys also may be in-vested in the same classes of securities referenced in G.S. 159-30(c). (c) Th e Commission shall have power to make reasonable bylaws, rules and regulations that are not inconsistent with the provisions of this Chapter and the General Statutes; provided, however, the Commission shall not make rules or regulations regulating commissions, sala-ries, or fees to be charged by licensees under this Chap-ter. (c1) Th e provisions of G.S. 93A-1 and G.S. 93A-2 notwith-standing, the Commission may adopt rules to permit a real estate broker to pay a fee or other valuable consider-ation to a travel agent for the introduction or procure-ment of tenants or potential tenants in vacation rent-als as defi ned in G.S. 42A-4. Rules adopted pursuant to this subsection may include a defi nition of the term ‘travel agent’, may regulate the conduct of permitted transations, and may limit the amount of the fee or the value of the consideration that may be paid to the trav-el agent. However, the Commission may not authorize a person or entity not licensed as a broker to negotiate any real estate transaction on behalf of another. (c2) Th e Commission shall adopt a seal for its use, which shall bear thereon the words “North Carolina Real Es-tate Commission.” Copies of all records and papers in the offi ce of the Commission duly certifi ed and au-thenticated by the seal of the Commission shall be re-ceived in evidence in all courts and with like eff ect as the originals. (d) Th e Commission may employ an Executive Director and professional and clerical staff as may be necessary to carry out the provisions of this Chapter and to put into eff ect the rules and regulations that the Commis-sion may promulgate. Th e Commission shall fi x salaries and shall require employees to make good and suffi cient surety bond for the faithful performance of their duties. Th e Commission shall reimburse its employees for trav-el on offi cial business. Mileage expenses for transporta-tion by privately owned automobile shall be reimbursed at the business standard mileage set by the Internal Rev-enue Service per mile of travel along with the actual tolls paid. Other travel expenses shall be reimbursed in accor-dance with G.S. 138-6. Th e Commission may, when it deems it necessary or convenient, delegate to the Execu-tive Director, legal counsel for the Commission, or oth-er Commission staff , professional or clerical, the Com-mission’s authority and duties under this Chapter, but the Commission may not delegate its authority to make rules or its duty to act as a hearing panel in accordance with the provisions of G.S. 150B-40(b). (e) Th e Commission shall be entitled to the services of the Attorney General of North Carolina, in connection with the aff airs of the Commission or may on approval of the Attorney General, employ an attorney to assist or represent it in the enforcement of this Chapter, as to specifi c matters, but the fee paid for such service shall be approved by the Attorney General. Th e Commis-sion may prefer a complaint for violation of this Chap-ter before any court of competent jurisdiction, and it 4 North Carolina Real Estate License Law and Commission Rules may take the necessary legal steps through the proper legal offi ces of the State to enforce the provisions of this Chapter and collect the penalties provided therein. (f ) Th e Commission is authorized to acquire, hold, convey, rent, encumber, alienate, and otherwise deal with real property in the same manner as a private person or cor-poration, subject only to the approval of the Governor and Council of State. Th e rents, proceeds, and other revenues and benefi ts of the ownership of real property shall inure to the Commission. Collateral pledged by the Commission for any encumbrance of real property shall be limited to the assets, income, and revenues of the Commission. Leases, deeds, and other instruments relating to the Commission’s interest in real property shall be valid when executed by the executive director of the Commission. Th e Commission may create and conduct education and information programs relating to the real estate business for the information, educa-tion, guidance and protection of the general public, li-censees, and applicants for license. Th e education and information programs may include preparation, print-ing and distribution of publications and articles and the conduct of conferences, seminars, and lectures. Th e Commission may claim the copyright to written ma-terials it creates and may charge fees for publications and programs. 93A-4. Applications for licenses; fees; qualifi cations; examinations; privilege licenses; renewal or reinstatement of license; power to enforce provisions. (a) Any person, partnership, corporation, limited liability company, association, or other business entity hereafter desiring to enter into business of and obtain a license as a real estate broker shall make written application for such license to the Commission in the form and manner prescribed by the Commission. Each appli-cant for a license as a real estate broker shall be at least 18 years of age. Each applicant for a license as a real es-tate broker shall, within three years preceding the date the application is made, have satisfactorily completed, at a school approved by the Commission, an educa-tion program consisting of at least 75 hours of class-room instruction in subjects determined by the Com-mission, or shall possess real estate education or experi-ence in real estate transactions which the Commission shall fi nd equivalent to the education program. Each applicant for a license as a real estate broker shall be re-quired to pay a fee, fi xed by the Commission but not to exceed thirty dollars ($30.00). (a1) Each person who is issued a real estate broker license on or after April 1, 2006, shall initially be classifi ed as a provisional broker and shall, within three years follow-ing initial licensure, satisfactorily complete, at a school approved by the Commission, a postlicensing educa-tion program consisting of 90 hours of classroom in-struction in subjects determined by the Commission or shall possess real estate education or experience in real estate transactions which the Commission shall fi nd equivalent to the education program. Th e Com-mission may, by rule, establish a schedule for comple-tion of the prescribed postlicensing education that re-quires provisional brokers to complete portions of the 90-hour postlicensing education program in less than three years, and provisional brokers must comply with this schedule in order to be entitled to actively engage in real estate brokerage. Upon completion of the postli-censing education program, the provisional status of the broker’s license shall be terminated. When a provi-sional broker fails to complete all 90 hours of required postlicensing education within three years following initial licensure, the broker’s license shall be cancelled, and the Commission may, in its discretion, require the person whose license was cancelled to satisfy the postli-censing education program and the requirements for original licensure prescribed in this Chapter as a con-dition of license reinstatement, including the exami-nation requirements and the license reinstatement fee prescribed by subsection (c) of this section. (a2) An approved school shall pay a fee of ten dollars ($10.00) per licensee to the Commission for each li-censee completing a postlicensing education course conducted by the school, provided that these fees shall not be charged to a community college, junior col-lege, college, or university located in this State and ac-credited by the Southern Association of Colleges and Schools. (b) Except as otherwise provided in this Chapter, any per-son who submits an application to the Commission in proper manner for a license as real estate broker shall be required to take an examination. Th e examination may be administered orally, by computer, or by any other method the Commission deems appropriate. Th e Commission may require the applicant to pay the Com-mission or a provider contracted by the Commission the actual cost of the examination and its administration. Th e cost of the examination and its administration shall be in addition to any other fees the applicant is required to pay under subsection (a) of this section. Th e exam-ination shall determine the applicant’s qualifi cations with due regard to the paramount interests of the pub-lic as to the applicant’s competency. A person who fails the license examination shall be entitled to know the re-sult and score. A person who passes the exam shall be notifi ed only that the person passed the examination. Whether a person passed or failed the examination shall be a matter of public record; however, the scores for li-cense examinations shall not be considered public re-cords. Nothing in this subsection shall limit the rights granted to any person under G.S. 93B-8. North Carolina Real Estate License Law and Commission Rules 5 An applicant for licensure under this Chapter shall sat-isfy the Commission that he or she possesses the compe-tency, honesty, truthfulness, integrity, and general mor-al character necessary to protect the public interest and promote public confi dence in the real estate brokerage business. Th e Commission may investigate the moral character of each applicant for licensure and require an applicant to provide the Commission with a criminal record report. All applicants shall obtain criminal re-cord reports from one or more reporting services des-ignated by the Commission to provide criminal record reports. Applicants are required to pay the designated reporting service for the cost of these reports. If the re-sults of any required competency examination and in-vestigation of the applicant’s moral character shall be satisfactory to the Commission, then the Commission shall issue to the applicant a license, authorizing the ap-plicant to act as a real estate broker in the State of North Carolina, upon the payment of privilege taxes now re-quired by law or that may hereafter be required by law. Notwithstanding G.S. 150B-38(c), in a contested case commenced upon the request of a party applying for licensure regarding the question of the moral charac-ter or fi tness of the applicant, if notice has been reason-ably attempted, but cannot be given to the applicant personally or by certifi ed mail in accordance with G.S. 150B-38(c), the notice of hearing shall be deemed giv-en to the applicant when a copy of the notice is depos-ited in an offi cial depository of the United States Postal Service addressed to the applicant at the latest mailing address provided by the applicant to the Commission or by any other means reasonably designed to achieve actual notice to the applicant. (b1) Th e Department of Justice may provide a criminal re-cord check to the Commission for a person who has ap-plied for a license through the Commission. Th e Com-mission shall provide to the Department of Justice, along with the request, the fi ngerprints of the applicant, any additional information required by the Department of Justice, and a form signed by the applicant consent-ing to the check of the criminal record and to the use of the fi ngerprints and other identifying information re-quired by the State or national repositories. Th e appli-cant’s fi ngerprints shall be forwarded to the State Bu-reau of Investigation for a search of the State’s criminal history record fi le, and the State Bureau of Investiga-tion shall forward a set of the fi ngerprints to the Federal Bureau of Investigation for a national criminal history check. Th e Commission shall keep all information pur-suant to this subsection privileged, in accordance with applicable State law and federal guidelines, and the in-formation shall be confi dential and shall not be a public record under Chapter 132 of the General Statutes. Th e Department of Justice may charge each applicant a fee for conducting the checks of criminal history re-cords authorized by this subsection. (c) All licenses issued by the Commission under the pro-visions of this Chapter shall expire on the 30th day of June following issuance or on any other date that the Commission may determine and shall become invalid after that date unless reinstated. A license may be re-newed 45 days prior to the expiration date by fi ling an application with and paying to the Executive Director of the Commission the license renewal fee. Th e license renewal fee is thirty dollars ($30.00) unless the Com-mission sets the fee at a higher amount. Th e Commis-sion may set the license renewal fee at an amount that does not exceed fi fty dollars ($50.00). Th e license re-newal fee may not increase by more than fi ve dollars ($5.00) during a 12-month period. Th e Commission may adopt rules establishing a system of license renew-al in which the licenses expire annually with varying expiration dates. Th ese rules shall provide for prorat-ing the annual fee to cover the initial renewal period so that no licensee shall be charged an amount greater than the annual fee for any 12-month period. Th e fee for reinstatement of an expired license shall be fi fty-fi ve dollars ($55.00). In the event a licensee fails to ob-tain a reinstatement of such license within six months after the expiration date thereof, the Commission may, in its discretion, consider such person as not having been previously licensed, and thereby subject to the provisions of this Chapter relating to the issuance of an original license, including the examination require-ments set forth herein. Duplicate licenses may be is-sued by the Commission upon payment of a fee of fi ve dollars ($5.00) by the licensee. Commission certifi ca-tion of a licensee’s license history shall be made only af-ter the payment of a fee of ten dollars ($10.00). (d) Th e Commission is expressly vested with the power and authority to make and enforce any and all reason-able rules and regulations connected with license ap-plication, examination, renewal, and reinstatement as shall be deemed necessary to administer and enforce the provisions of this Chapter. Th e Commission is further authorized to adopt reasonable rules and regu-lations necessary for the approval of real estate schools, instructors, and textbooks and rules that prescribe spe-cifi c requirements pertaining to instruction, adminis-tration, and content of required education courses and programs. (e) Nothing contained in this Chapter shall be construed as giving any authority to the Commission nor any li-censee of the Commission as authorizing any licens-ee to engage in the practice of law or to render any le-gal service as specifi cally set out in G.S. 84-2.1 or any other legal service not specifi cally referred to in said section. 6 North Carolina Real Estate License Law and Commission Rules 93A-4.1. Continuing education. (a) Th e Commission shall establish a program of continu-ing education for real estate brokers. An individual li-censed as a real estate broker is required to complete continuing education requirements in an amount not to exceed eight classroom hours of instruction a year during any license renewal period in subjects and at times the Commission deems appropriate. Any licens-ee who fails to complete continuing education require-ments pursuant to this section shall not actively engage in the business of real estate broker. (a1) Th e Commission may, as part of the broker continu-ing education requirements, require real estate bro-kers- in-charge to complete during each annual license period a special continuing education course consist-ing of not more than four classroom hours of instruc-tion in subjects prescribed by the Commission. (b) Th e Commission shall establish procedures allowing for a deferral of continuing education for brokers while they are not actively engaged in real estate brokerage. (c) Th e Commission may adopt any reasonable rules not inconsistent with this Chapter to give purpose and ef-fect to the continuing education requirement, includ-ing rules that govern: (1) Th e content and subject matter of continuing ed-ucation courses. (2) Th e curriculum of courses required. (3) Th e criteria, standards, and procedures for the ap-proval of courses, course sponsors, and course in-structors. (4) Th e methods of instruction. (5) Th e computation of course credit. (6) Th e ability to carry forward course credit from one year to another. (7) Th e deferral of continuing education for brokers and salespersons not engaged in brokerage. (8) Th e waiver of or variance from the continuing edu-cation requirement for hardship or other reasons. (9) Th e procedures for compliance and sanctions for noncompliance. (d) Th e Commission may establish a nonrefundable course application fee to be charged to a course sponsor for the review and approval of a proposed continuing ed-ucation course. Th e fee shall not exceed one hundred twenty-fi ve dollars ($125.00) per course. Th e Com-mission may charge the sponsor of an approved course a nonrefundable fee not to exceed seventy-fi ve dollars ($75.00) for the annual renewal of course approval. An approved course sponsor shall pay a fee of ten dol-lars ($10.00) per licensee to the Commission for each licensee completing an approved continuing education course conducted by the sponsor. Th e Commission shall not charge a course application fee, a course renewal fee, or any other fee for a con-tinuing education course sponsored by a community college, junior college, college, or university located in this State and accredited by the Southern Association of Colleges and Schools. (e) Th e Commission may award continuing education credit for an unapproved course or related education-al activity. Th e Commission may prescribe procedures for a licensee to submit information on an unapproved course or related educational activity for continuing education credit. Th e Commission may charge a fee to the licensee for each course or activity submitted. Th e fee shall not exceed fi fty dollars ($50.00). 93A-4.2. Broker-in-charge qualifi cation. To be qualifi ed to serve as a broker-in-charge of a real es-tate offi ce, a real estate broker shall possess at least two years of full-time real estate brokerage experience or equivalent part-time real estate brokerage experience within the previ-ous fi ve years or real estate education or experience in real estate transactions that the Commission fi nds equivalent to such experience and shall complete, within a time pre-scribed by the Commission, a course of study prescribed by the Commission for brokers-in-charge not to exceed 12 classroom hours of instruction. A provisional broker may not be designated as a broker-in-charge. 93A-4.3. Elimination of salesperson license; conversion of salesperson licenses to broker licenses. (a) Eff ective April 1, 2006, the Commission shall discon-tinue issuing real estate salesperson licenses. Also eff ec-tive April 1, 2006, all salesperson licenses shall become broker licenses, and each person holding a broker li-cense that was changed from salesperson to broker on that date shall be classifi ed as a provisional broker as defi ned in G.S. 93A-2(a2). (b) A provisional broker as contemplated in subsection (a) of this section who was issued a salesperson license prior to October 1, 2005, shall, not later than April 1, 2008, complete a broker transition course prescribed by the Commission, not to exceed 24 classroom hours of in-struction, or shall demonstrate to the Commission that he or she possesses four years’ full-time real estate broker-age experience or equivalent part-time real estate broker-age experience within the previous six years. If the provi-sional broker satisfi es this requirement by April 1, 2008, the provisional status of his or her broker license will be terminated, and the broker will not be required to com-plete the 90-classroom-hour broker postlicensing educa-tion program prescribed by G.S. 93A-4(a1). If the provi-sional broker fails to satisfy this requirement by April 1, 2008, his or her license will be placed on inactive status, if not already on inactive status, and he or she must com-plete the 90-classroom-hour broker postlicensing educa-tion program prescribed by G.S. 93A-4(a1) in order to terminate the provisional status of the broker license and to be eligible to return his or her license to active status. North Carolina Real Estate License Law and Commission Rules 7 (c) An approved school or sponsor shall pay a fee of ten dol-lars ($10.00) per licensee to the Commission for each licensee completing a broker transition course con-ducted by the school or sponsor, provided that these fees shall not be charged to a community college, ju-nior college, college, or university located in this State and accredited by the Southern Association of Colleg-es and Schools. (d) A provisional broker as contemplated in subsection (a) of this section, who was issued a salesperson license be-tween October 1, 2005, and March 31, 2006, shall, not later than April 1, 2009, satisfy the requirements of G.S. 93A-4(a1). Upon satisfaction of the requirements of G.S. 93A-4(a1), the provisional status of the bro-ker’s license will be terminated. If the provisional bro-ker fails to satisfy the requirements of G.S. 93A-4(a1) by April 1, 2009, the broker’s license shall be cancelled, and the person will be subject to the requirements for licensure reinstatement prescribed by G.S. 93A-4(a1). (e) A broker who was issued a broker license prior to April 1, 2006, shall not be required to complete either the 90-classroom-hour broker postlicensing education pro-gram prescribed by G.S. 93A-4(a1) or the broker transi-tion course prescribed by subsection (b) of this section. (f ) For the purpose of determining a licensee’s status, rights, and obligations under this section, the Commission may treat a person who is issued a license on or after the October 1, 2005, or April 1, 2006, dates cited in subsec-tions (a), (b), (d), or (e) of this section as though the per-son had been issued a license prior to those dates if the only reason the person’s license was not issued prior to those dates was that the person’s application was pend-ing a determination by the Commission as to whether the applicant possessed the requisite moral character for licensure. If a license application is pending on April 1, 2006, for any reason other than a determination by the Commission as to the applicant’s moral character for li-censure, and if the applicant has not satisfi ed all educa-tion and examination requirements for licensing in ef-fect on April 1, 2006, the applicant’s application shall be cancelled and the application fee refunded. (g) No applications for a real estate salesperson license shall be accepted by the Commission between September 1, 2005, and September 30, 2005. 93A-5. Register of applicants; roster of brokers; fi nancial report to Secretary of State. (a) Th e Executive Director of the Commission shall keep a register of all applicants for license, showing for each the date of application, name, place of residence, and whether the license was granted or refused. Said regis-ter shall be prima facie evidence of all matters record-ed therein. (b) Th e Executive Director of the Commission shall also keep a current roster showing the names and places of business of all licensed real estate brokers, which roster shall be kept on fi le in the offi ce of the Commission and be open to public inspection. (c) On or before the fi rst day of September of each year, the Commission shall fi le with the Secretary of State a copy of the roster of real estate brokers holding certifi cates of license, and at the same time shall also fi le with the Sec-retary of State a report containing a complete statement of receipts and disbursements of the Commission for the preceding fi scal year ending June 30 attested by the affi davit of the Executive Director of the Commission. 93A-6. Disciplinary action by Commission. (a) Th e Commission has the power to take disciplinary action. Upon its own initiative, or on the complaint of any person, the Commission may investigate the actions of any person or entity licensed under this Chapter, or any other person or entity who shall assume to act in such capacity. If the Commission fi nds probable cause that a licensee has violat-ed any of the provisions of this Chapter, the Commission may hold a hearing on the allegations of misconduct. Th e Commission has the power to suspend or revoke at any time a license issued under the provisions of this Chapter, or to reprimand or censure any licensee, if, fol-lowing a hearing, the Commission adjudges the licensee to be guilty of: (1) Making any willful or negligent misrepresentation or any willful or negligent omission of material fact. (2) Making any false promises of a character likely to infl uence, persuade, or induce. (3) Pursuing a course of misrepresentation or mak-ing of false promises through agents, advertising or otherwise. (4) Acting for more than one party in a transaction without the knowledge of all parties for whom he or she acts. (5) Accepting a commission or valuable consider-ation as a real estate salesperson for the perfor-mance of any of the acts specifi ed in this Article or Article 4 of this Chapter, from any person ex-cept his or her broker-in-charge or licensed bro-ker by whom he or she is employed. (6) Representing or attempting to represent a real es-tate broker other than the broker by whom he or she is engaged or associated, without the express knowledge and consent of the broker with whom he or she is associated. (7) Failing, within a reasonable time, to account for or to remit any moneys coming into his or her possession which belong to others. (8) Being unworthy or incompetent to act as a real estate broker in a manner as to endanger the in-terest of the public. (9) Paying a commission or valuable consideration to 8 North Carolina Real Estate License Law and Commission Rules any person for acts or services performed in vio-lation of this Chapter. (10) Any other conduct which constitutes improper, fraudulent or dishonest dealing. (11) Performing or undertaking to perform any legal service, as set forth in G.S. 84-2.1, or any other acts constituting the practice of law. (12) Commingling the money or other property of his or her principals with his or her own or failure to maintain and deposit in a trust or escrow ac-count in an insured bank or savings and loan as-sociation in North Carolina all money received by him or her as a real estate licensee acting in that capacity, or an escrow agent, or the custodian or manager of the funds of another person or enti-ty which relate to or concern that person’s or en-tity’s interest or investment in real property, pro-vided, these accounts shall not bear interest unless the principals authorize in writing the deposit be made in an interest bearing account and also pro-vide for the disbursement of the interest accrued. (13) Failing to deliver, within a reasonable time, a completed copy of any purchase agreement or of-fer to buy and sell real estate to the buyer and to the seller. (14) Failing, at the time the transaction is consum-mated, to deliver to the seller in every real estate transaction, a complete detailed closing statement showing all of the receipts and disbursements han-dled by him or her for the seller or failing to deliv-er to the buyer a complete statement showing all money received in the transaction from the buyer and how and for what it was disbursed. (15) Violating any rule or regulation promulgated by the Commission. Th e Executive Director shall transmit a certifi ed copy of all fi nal orders of the Commission suspending or re-voking licenses issued under this Chapter to the clerk of superior court of the county in which the licensee maintains his or her principal place of business. Th e clerk shall enter these orders upon the judgment dock-et of the county. (b) Following a hearing, the Commission shall also have power to suspend or revoke any license issued under the provisions of this Chapter or to reprimand or cen-sure any licensee when: (1) Th e licensee has obtained a license by false or fraud-ulent representation; (2) Th e licensee has been convicted or has entered a plea of guilty or no contest upon which fi nal judg-ment is entered by a court of competent jurisdic-tion in this State, or any other state, of the crim-inal off enses of: embezzlement, obtaining money under false pretense, fraud, forgery, conspiracy to defraud, or any other off ense involving moral tur-pitude which would reasonably aff ect the licens-ee’s performance in the real estate business; (3) Th e licensee has violated any of the provisions of G.S. 93A-6(a) when selling, leasing, or buying his or her own property; (4) Th e broker’s unlicensed employee, who is ex-empt from the provisions of this Chapter under G.S. 93A-2(c)(6), has committed, in the regu-lar course of business, any act which, if commit-ted by the broker, would constitute a violation of G.S. 93A-6(a) for which the broker could be dis-ciplined; or (5) Th e licensee, who is also a State-licensed or State-certifi ed real estate appraiser pursuant to Chapter 93E of the General Statutes, has violat-ed any provisions of Chapter 93E of the General Statutes and has been reprimanded or has had his or her appraiser license or certifi cate suspended or revoked by the Appraisal Board. (c) Th e Commission may appear in its own name in supe-rior court in actions for injunctive relief to prevent any person from violating the provisions of this Chapter or rules promulgated by the Commission. Th e superior court shall have the power to grant these injunctions even if criminal prosecution has been or may be insti-tuted as a result of the violations, or whether the per-son is a licensee of the Commission. (d) Each broker shall maintain complete records showing the deposit, maintenance, and withdrawal of mon-ey or other property owned by his or her principals or held in escrow or in trust for his or her principals. Th e Commission may inspect these records periodical-ly, without prior notice and may also inspect these re-cords whenever the Commission determines that they are pertinent to an investigation of any specifi c com-plaint against a licensee. (e) When a person or entity licensed under this Chapter is accused of any act, omission, or misconduct which would subject the licensee to disciplinary action, the licensee, with the consent and approval of the Com-mission, may surrender his or her or its license and all the rights and privileges pertaining to it for a period of time established by the Commission. A person or en-tity who surrenders his or her or its license shall not thereafter be eligible for or submit any application for licensure as a real estate broker or salesperson during the period of license surrender. (f ) In any contested case in which the Commission takes disciplinary action authorized by any provision of this Chapter, the Commission may also impose reasonable conditions, restrictions, and limitations upon the li-cense, registration, or approval issued to the disciplined person or entity. In any contested case concerning an application for licensure, time share project registration, or school, sponsor, instructor, or course approval, the North Carolina Real Estate License Law and Commission Rules 9 Commission may impose reasonable conditions, restric-tions, and limitations on any license, registration, or ap-proval it may issue as a part of its fi nal decision. 93A-6.1. Commission may subpoena witnesses, records, documents, or other materials. (a) Th e Commission, Executive Director, or other repre-sentative designated by the Commission may issue a subpoena for the appearance of witnesses deemed nec-essary to testify concerning any matter to be heard be-fore or investigated by the Commission. Th e Com-mission may issue a subpoena ordering any person in possession of records, documents, or other materi-als, however maintained, that concern any matter to be heard before or investigated by the Commission to produce the records, documents, or other materials for inspection or deliver the same into the custody of the Commission’s authorized representatives. Upon writ-ten request, the Commission shall revoke a subpoena if it fi nds that the evidence, the production of which is required, does not relate to a matter in issue, or if the subpoena does not describe with suffi cient particulari-ty the evidence, the production of which is required, or if for any other reason in law the subpoena is invalid. If any person shall fail to fully and promptly comply with a subpoena issued under this section, the Commission may apply to any judge of the superior court resident in any county where the person to whom the subpoena is issued maintains a residence or place of business for an order compelling the person to show cause why he or she should not be held in contempt of the Commis-sion and its processes. Th e court shall have the power to impose punishment for acts that would constitute direct or indirect contempt if the acts occurred in an action pending in superior court. (b) Th e Commission shall be exempt from the require-ments of Chapter 53B of the General Statutes with re-gard to subpoenas issued to compel the production of a licensee’s trust account records held by any fi nancial in-stitution. Notwithstanding that exemption, the Com-mission shall serve, pursuant to G.S. 1A-1, Rule 4(j) of the N.C. Rules of Civil Procedure or by certifi ed mail to the licensee’s last known address, a copy of the sub-poena and notice that the subpoena has been served upon the fi nancial institution. Service of the subpoe-na and notice on the licensee shall be made within 10 days following service of the subpoena on the fi nancial institution holding the trust account records. 93A-7. Power of courts to revoke. Whenever any person, partnership, association or corpora-tion claiming to have been injured or damaged by the gross negligence, incompetency, fraud, dishonesty or misconduct on the part of any licensee following the calling or engaging in the business herein described and shall fi le suit upon such claim against such licensee in any court of record in this State and shall recover judgment thereon, such court may as part of its judgment or decree in such case, if it deem it a proper case in which so to do, order a written copy of the transcript of record in said case to be forwarded by the clerk of court to the chairman of the said Commission with a recommenda-tion that the licensee’s certifi cate of license be revoked. 93A-8. Penalty for violation of Chapter. Any person violating the provisions of this Chapter shall upon conviction thereof be deemed guilty of a Class 1 mis-demeanor. 93A-9. Licensing nonresidents. (a) An applicant from another state, which off ers licens-ing privileges to residents of North Carolina, may be licensed by conforming to all the provisions of this Chapter and, in the discretion of the Commission, such other terms and conditions as are required of North Carolina residents applying for license in such other state; provided that the Commission may exempt from the examination prescribed in G.S. 93A-4 a broker or salesperson duly licensed in another state if a similar exemption is extended to licensed brokers from North Carolina. A license applicant who has been a resident of North Carolina for not more than 90 days may be considered by the Commission as a nonresident for the purposes of this subsection. (b) Th e Commission may issue a limited broker’s license to a person or an entity from another state or territory of the United States without regard to whether that state or territory off ers similar licensing privileges to residents in North Carolina if the person or entity satisfi es all of the following: (1) Is of good moral character and licensed as a real es-tate broker or salesperson in good standing in an-other state or territory of the United States. (2) Only engages in business as a real estate broker in North Carolina in transactions involving com-mercial real estate and while the person or enti-ty is affi liated with a resident North Carolina real estate broker. (3) Complies with the laws of this State regulating real estate brokers and rules adopted by the Commis-sion. Th e Commission may require an applicant for licen-sure under this subsection to pay a fee not to exceed three hundred dollars ($300.00). All licenses issued under this subsection shall expire on June 30 of each year following issuance or on a date that the Commis-sion deems appropriate unless the license is renewed pursuant to the requirements of G.S. 93A-4. A person or entity licensed under this subsection may be disci-plined by the Commission for violations of this Chap-ter as provided in G.S. 93A-6 and G.S. 93A-54. 10 North Carolina Real Estate License Law and Commission Rules Any person or entity licensed under this subsection shall be affi liated with a resident North Carolina real estate broker, and the resident North Carolina real es-tate broker shall actively and personally supervise the licensee in a manner that reasonably assures that the li-censee complies with the requirements of this Chap-ter and rules adopted by the Commission. A person or entity licensed under this subsection shall not, howev-er, be affi liated with a resident North Carolina real es-tate provisional broker. Th e Commission may exempt applicants for licensure under this subsection from ex-amination and the other licensing requirements under G.S. 93A-4. Th e Commission may adopt rules as it deems necessary to give eff ect to this subsection, in-cluding rules establishing: (i) qualifi cations for licen-sure; (ii) licensure and renewal procedures; (iii) re-quirements for continuing education; (iv) conduct of persons and entities licensed under this subsection and their affi liated resident real estate brokers; (v) a defi - nition of commercial real estate; and (vi) any require-ments or limitations on affi liation between resident real estate brokers and persons or entities seeking licen-sure under this subsection. 93A-10. Nonresident licensees; fi ling of consent as to service of process and pleadings. Every nonresident applicant shall fi le an irrevocable consent that suits and actions may be commenced against such ap-plicant in any of the courts of record of this State, by the service of any process or pleading authorized by the laws of this State in any county in which the plaintiff may reside, by serving the same on the Executive Director of the Com-mission, said consent stipulating and agreeing that such ser-vice of such process or pleadings on said Executive Director shall be taken and held in all courts to be valid and binding as if due service had been made personally upon the appli-cant in this State. Th is consent shall be duly acknowledged, and, if made by a corporation, shall be executed by an of-fi cer of the corporation. Th e signature of the offi cer on the consent to service instrument shall be suffi cient to bind the corporation and no further authentication is necessary. An application from a corporation or other business entity shall be signed by an offi cer of the corporation or entity or by an individual designated by the Commission. In all cases where process or pleadings shall be served, un-der the provisions of this Chapter, upon the Executive Di-rector of the Commission, such process or pleadings shall be served in duplicate, one of which shall be fi led in the of-fi ce of the Commission and the other shall be forwarded immediately by the Executive Director of the Commission, by registered mail, to the last known business address of the nonresident licensee against which such process or plead-ings are directed. 93A-11. Reimbursement by real estate independent contractor of brokers’ workers’ compensation. (a) Notwithstanding the provisions of G.S. 97-21 or any other provision of law, a real estate broker may include in the governing contract with a real estate salesper-son whose nonemployee status is recognized pursuant to section 3508 of the United States Internal Revenue Code, 26 U.S.C. § 3508, an agreement for the sales-person to reimburse the broker for the cost of covering that salesperson under the broker’s workers’ compensa-tion coverage of the broker’s business. (b) Nothing in this section shall aff ect a requirement under any other law to provide workers’ compensation cover-age or in any manner exclude from coverage any person, fi rm, or corporation otherwise subject to the provisions of Article 1 of Chapter 97 of the General Statutes. 93A-12. Disputed monies. (a) A real estate broker licensed under this Chapter may deposit with the clerk of court in accordance with this section monies, other than a residential security depos-it, the ownership of which are in dispute and that the real estate broker received while acting in a fi duciary capacity. (b) Th e disputed monies shall be deposited with the clerk of court in the county in which the property for which the disputed monies are being held is located. At the time of depositing the disputed monies, the real es-tate broker shall certify to the clerk of court that the persons who are claiming ownership of the disputed monies have been notifi ed in accordance with subsec-tion (c) of this section that the disputed monies are to be deposited with the clerk of court and that the per-sons may initiate a special proceeding with the clerk of court to recover the disputed monies. (c) Notice to the persons who are claiming ownership to the disputed monies required under subsection (b) of this section shall be provided by delivering a copy of the notice to the person or by mailing it to the person by fi rst-class mail, postpaid, properly addressed to the person at the person’s last known address. (d) A real estate broker shall not deposit disputed monies with the clerk of court until 90 days following notifi ca-tion of the persons claiming ownership of the disput-ed monies. (e) Upon the fi ling of a special proceeding to recover the disputed monies, the clerk shall determine the right-ful ownership of the monies and distribute the disput-ed monies accordingly. If no special proceeding is fi led with the clerk of court within one year of the disputed monies being deposited with the clerk of court, the dis-puted monies shall be deemed unclaimed and shall be delivered by the clerk of court to the State Treasurer in accordance with the provisions of Article 4 of Chapter 116B of the General Statutes. North Carolina Real Estate License Law and Commission Rules 11 Sections 93A-13 through 93A-15: Reserved for future codifi cation purposes. 93A-16. Real Estate Recovery Fund created; payment to fund; management. (a) Th ere is hereby created a special fund to be known as the “Real Estate Recovery Fund” which shall be set aside and maintained by the North Carolina Real Es-tate Commission. Said fund shall be used in the man-ner provided under this Article for the payment of un-satisfi ed judgments where the aggrieved person has suf-fered a direct monetary loss by reason of certain acts committed by any real estate salesperson licensed be-fore April 1, 2006, or by any real estate broker. (b) On September 1, 1979, the Commission shall transfer the sum of one hundred thousand dollars ($100,000) from its expense reserve fund to the Real Estate Recov-ery Fund. Th ereafter, the Commission may transfer to the Real Estate Recovery Fund additional sums of mon-ey from whatever funds the Commission may have, pro-vided that, if on December 31 of any year the amount remaining in the fund is less than fi fty thousand dollars ($50,000), the Commission may determine that each person or entity licensed under this Chapter, when re-newing his or her or its license, shall pay in addition to his or her license renewal fee, a fee not to exceed ten dollars ($10.00) per broker and fi ve dollars ($5.00) per salesperson as shall be determined by the Commission for the purpose of replenishing the fund. (c) Th e Commission shall invest and reinvest the moneys in the Real Estate Recovery Fund in the same manner as provided by law for the investment of funds by the clerk of superior court. Th e proceeds from such invest-ments shall be deposited to the credit of the fund. (d) Th e Commission shall have the authority to adopt rea-sonable rules and procedures not inconsistent with the provisions of this Article, to provide for the orderly, fair and effi cient administration and payment of monies held in the Real Estate Recovery Fund. 93A-17. Grounds for payment; notice and application to Commission. (a) An aggrieved person who has suff ered a direct monetary loss by reason of the conversion of trust funds by a real estate salesperson licensed before April 1, 2006, or by any licensed real estate broker shall be eligible to recov-er, subject to the limitations of this Article, the amount of trust funds converted and which is otherwise unre-coverable provided that: (1) Th e act or acts of conversion which form the ba-sis of the claim for recovery occurred on or after September 1, 1979; (2) Th e aggrieved person has sued the real estate bro-ker or salesperson in a court of competent juris-diction and has fi led with the Commission writ-ten notice of such lawsuit within 60 days after its commencement unless the claim against the Real Estate Recovery Fund is for an amount less than three thousand dollars ($3,000), excluding attor-neys fees, in which case the notice may be fi led within 60 days after the termination of all judicial proceedings including appeals; (3) Th e aggrieved person has obtained fi nal judgment in a court of competent jurisdiction against the real estate broker or salesperson on grounds of conversion of trust funds arising out of a transac-tion which occurred when such broker or sales-person was licensed and acting in a capacity for which a license is required; and (4) Execution of the judgment has been attempted and has been returned unsatisfi ed in whole or in part. Upon the termination of all judicial proceedings includ-ing appeals, and for a period of one year thereafter, a person eligible for recovery may fi le a verifi ed applica-tion with the Commission for payment out of the Real Estate Recovery Fund of the amount remaining unpaid upon the judgment which represents the actual and di-rect loss sustained by reason of conversion of trust funds. A copy of the judgment and return of execution shall be attached to the application and fi led with the Commis-sion. Th e applicant shall serve upon the judgment debt-or a copy of the application and shall fi le with the Com-mission an affi davit or certifi cate of such service. (b) For the purposes of this Article, the term “trust funds” shall include all earnest money deposits, down payments, sales proceeds, tenant security deposits, undisbursed rents and other such monies which belong to another or others and are held by a real estate broker or salesper-son acting in that capacity. Trust funds shall also include all time share purchase monies which are required to be held in trust by G.S. 93A-45(c) during the time they are, in fact, so held. Trust funds shall not include, however, any funds held by an independent escrow agent under G.S. 93A-42 or any funds which the court may fi nd to be subject to an implied, constructive or resulting trust. (c) For the purposes of this Article, the terms “licensee”, “broker”, and “salesperson” shall include only individu-al persons licensed under this Chapter as brokers or in-dividual persons who were licensed under this Chap-ter as salespersons prior to April 1, 2006. Th e terms “li-censee”, “broker”, and “salesperson” shall not include a time share developer, time share project, independent escrow agent, corporation or other entity licensed un-der this Chapter. 93A-18. Hearing; required showing. Upon such application by an aggrieved person, the Commis- 12 North Carolina Real Estate License Law and Commission Rules sion shall conduct a hearing and the aggrieved person shall be required to show: (1) He or she is not a spouse of the judgment debtor or a person representing such spouse; and (2) He or she is making application not more than one year after termination of all judicial proceedings, in-cluding appeals, in connection with the judgment; (3) He or she has complied with all requirements of this Article; (4) He or she has obtained a judgment as described in G.S. 93A-17, stating the amount owing thereon at the date of application; (5) He or she has made all reasonable searches and in-quiries to ascertain whether the judgment debtor is possessed of real or personal property or other assets liable to be sold or applied in satisfaction of the judgment; (6) Th at by such search he or she has discovered no real or personal property or other assets liable to be sold or applied, or that he or she has discov-ered certain of them, describing them, but that the amount so realized was insuffi cient to satisfy the judgment, stating the amount realized and the balance remaining due on the judgment after ap-plication of the amount realized; and (7) He or she has diligently pursued his or her rem-edies including attempted execution on the judg-ment against all the judgment debtors which exe-cution has been returned unsatisfi ed. In addition to that, he or she knows of no assets of the judg-ment debtor and that he or she has attempted col-lection from all other persons who may be liable to him or her in the transaction for which he or she seeks payment from the Real Estate Recovery Fund if there be any such other persons. 93A-19. Response and defense by Commis sion and judgment debtor; proof of conversion. (a) Whenever the Commission proceeds upon an applica-tion as set forth in this Article, counsel for the Com-mission may defend such action on behalf of the fund and shall have recourse to all appropriate means of de-fense, including the examination of witnesses. Th e judgment debtor may defend such action on his or her own behalf and shall have recourse to all appro-priate means of defense, including the examination of witnesses. Counsel for the Commission and the judg-ment debtor may fi le responses to the application, set-ting forth answers and defenses. Responses shall be fi led with the Commission and copies shall be served upon every party by the fi ling party. If at any time it appears there are no triable issues of fact and the ap-plication for payment from the fund is without mer-it, the Commission shall dismiss the application. A motion to dismiss may be supported by affi davit of any person or persons having knowledge of the facts and may be made on the basis that the application or the judgment referred to therein do not form a basis for meritorious recovery within the purview of G.S. 93A-17, that the applicant has not complied with the provisions of this Article, or that the liability of the fund with regard to the particular licensee or transac-tion has been exhausted; provided, however, notice of such motion shall be given at least 10 days prior to the time fi xed for hearing. If the applicant or judgment debtor fails to appear at the hearing after receiving no-tice of the hearing, the applicant or judgment debtor shall waive his or her rights unless the absence is ex-cused by the Commission. (b) Whenever the judgment obtained by an applicant is by default, stipulation, or consent, or whenever the action against the licensee was defended by a trustee in bank-ruptcy, the applicant, for purposes of this Article, shall have the burden of proving his or her cause of action for conversion of trust funds. Otherwise, the judgment shall create a rebuttable presumption of the conversion of trust funds. Th is presumption is a presumption af-fecting the burden of producing evidence. 93A-20. Order directing payment out of fund; compromise of claims. Applications for payment from the Real Estate Recovery Fund shall be heard and decided by a majority of the mem-bers of the Commission. If, after a hearing, the Commis-sion fi nds the claim should be paid from the fund, the Commission shall enter an order requiring payment from the fund of whatever sum the Commission shall fi nd to be payable upon the claim in accordance with the limitations contained in this Article. Subject to Commission approval, a claim based upon the application of an aggrieved person may be compromised; however, the Commission shall not be bound in any way by any compromise or stipulation of the judgment debtor. If a claim appears to be otherwise meritorious, the Com-mission may waive procedural defects in the application for payment. 93A-21. Limitations; pro rata distribution; attorney fees. (a) Payments from the Real Estate Recovery Fund shall be subject to the following limitations: (1) Th e right to recovery under this Article shall be for-ever barred unless application is made within one year after termination of all proceedings including appeals, in connection with the judgment; (2) Th e fund shall not be liable for more than twen-ty- fi ve thousand dollars ($25,000) per transaction regardless of the number of persons aggrieved or parcels of real estate involved in such transaction; and North Carolina Real Estate License Law and Commission Rules 13 (3) Th e liability of the fund shall not exceed in the ag-gregate twenty-fi ve thousand dollars ($25,000) for any one licensee within a single calendar year, and in no event shall it exceed in the aggregate fi fty thousand dollars ($50,000) for any one licensee. (4) Th e fund shall not be liable for payment of any judgment awards of consequential damages, mul-tiple or punitive damages, civil penalties, inciden-tal damages, special damages, interest, costs of court or action or other similar awards. (b) If the maximum liability of the fund is insuffi cient to pay in full the valid claims of all aggrieved persons whose claims relate to the same transaction or to the same li-censee, the amount for which the fund is liable shall be distributed among the claimants in a ratio that their re-spective claims bear to the total of such valid claims or in such manner as the Commission, in its discretion, deems equitable. Upon petition of counsel for the Commis-sion, the Commission may require all claimants and pro-spective claimants to be joined in one proceeding to the end that the respective rights of all such claimants to the Real Estate Recovery Fund may be equitably resolved. A person who fi les an application for payment after the maximum liability of the fund for the licensee or transac-tion has been exhausted shall not be entitled to payment and may not seek judicial review of the Commission’s award of payment to any party except upon a showing that the Commission abused its discretion. (c) In the event an aggrieved person is entitled to payment from the fund in an amount of one thousand fi ve hun-dred dollars ($1,500) or less, the Commission may allow such person to recover from the fund reasonable attor-ney’s fees incurred in eff ecting such recovery. Reimburse-ment for attorney’s fees shall be limited to those fees in-curred in eff ecting recovery from the fund and shall not include any fee incurred in obtaining judgment against the licensee. 93A-22. Repayment to fund; automatic sus pension of license. Should the Commission pay from the Real Estate Recovery Fund any amount in settlement of a claim or toward satisfac-tion of a judgment against a licensed real estate broker or sales-person, any license issued to the broker or salesperson shall be automatically suspended upon the eff ective date of the order authorizing payment from the fund. No such broker or sales-person shall be granted a reinstatement until the fund has been repaid in full, including interest at the legal rate as provided for in G.S. 24-1. 93A-23. Subrogation of rights. When the Commission has paid from the Real Estate Re-covery Fund any sum to the judgment creditor, the Com-mission shall be subrogated to all of the rights of the judg-ment creditor to the extent of the amount so paid and the judgment creditor shall assign all his or her right, title, and interest in the judgment to the extent of the amount so paid to the Commission and any amount and interest so recov-ered by the Commission on the judgment shall be deposited in the Real Estate Recovery Fund. 93A-24. Waiver of rights. Th e failure of an aggrieved person to comply with this Arti-cle shall constitute a waiver of any rights hereunder. 93A-25. Persons ineligible to recover from fund. No real estate broker or real estate salesperson who suff ers the loss of any commission from any transaction in which he or she was acting in the capacity of a real estate broker or real estate salesperson shall be entitled to make application for payment from the Real Estate Recovery Fund for such loss. 93A-26. Disciplinary action against licensee. Nothing contained in this Article shall limit the authority of the Commission to take disciplinary action against any li-censee under this Chapter, nor shall the repayment in full of all obligations to the fund by any licensee nullify or modify the eff ect of any other disciplinary proceeding brought un-der this Chapter. Sections 93A-27 through 93A-31: Reserved for future codifi cation purposes. 93A-39. Title. Th is Article shall be known and may be cited as the “North Carolina Time Share Act.” 93A-40. Regis tration required of time share projects; real es tate license required. (a) It shall be unlawful for any person in this State to en-gage or assume to engage in the business of a time share salesperson without fi rst obtaining a real estate broker license issued by the North Carolina Real Estate Com-mission under the provisions of Article I of this Chap-ter, and it shall be unlawful for a time share developer to sell or off er to sell a time share located in this State without fi rst obtaining a certifi cate of registration for the time share project to be off ered for sale issued by the North Carolina Real Estate Commission under the provisions of this Article. 14 North Carolina Real Estate License Law and Commission Rules (b) A person responsible as general partner, corporate of-fi cer, joint venturer or sole proprietor who intentional-ly acts as a time share developer, allowing the off ering of sale or the sale of time shares to a purchaser, without fi rst obtaining registration of the time share project un-der this Article shall be guilty of a Class I felony. 93A-41. Defi nitions. When used in this Article, unless the context otherwise re-quires, the term: (1) “Commission” means the North Carolina Real Es-tate Commission; (2) “Developer” means any person or entity which cre-ates a time share or a time share project or pro-gram, purchases a time share for purpose of re-sale, or is engaged in the business of selling its own time shares and shall include any person or entity who controls, is controlled by, or is in com-mon control with the developer which is engaged in creating or selling time shares for the develop-er, but a person who purchases a time share for his or her occupancy, use, and enjoyment shall not be deemed a developer; (3) “Enrolled” means paid membership in exchange programs or membership in an exchange program evidenced by written acceptance or confi rmation of membership; (4) “Exchange company” means any person operat-ing an exchange program; (5) “Exchange program” means any opportunity or procedure for the assignment or exchange of time shares among purchasers in the same or other time share project; (5a) “Independent escrow agent” means a licensed at-torney located in this State or a fi nancial institu-tion located in this State; (6) “Managing agent” means a person who under-takes the duties, responsibilities, and obligations of the management of a time share program; (7) Person” means one or more natural persons, cor-porations, partnerships, associations, trusts, oth-er entities, or any combination thereof; (7a) “Project broker” means a natural person licensed as a real estate broker and designated by the de-veloper to supervise brokers at the time share project; (8) “Purchaser” means any person other than a de-veloper or lender who owns or acquires an inter-est or proposes to acquire an interest in a time share; (9) “Time share” means a right to occupy a unit or any of several units during fi ve or more separated time periods over a period of at least fi ve years, includ-ing renewal options, whether or not coupled with a freehold estate or an estate for years in a time share project or a specifi ed portion thereof, includ-ing, but not limited to, a vacation license, prepaid hotel reservation, club membership, limited part-nership, vacation bond, or a plan or system where the right to use is awarded or apportioned on the basis of points, vouchers, split, divided, or fl oating use; (9a) “Time share instrument” means an instrument transferring a time share or any interest, legal or benefi cial, in a time share to a purchaser, including a contract, installment contract, lease, deed, or oth-er instrument; (10) “Time share program” means any arrangement for time shares whereby real property has been made subject to a time share; (11) “Time share project” means any real property that is subject to a time share program; (11a)“Time share registrar” means a natural person who is designated by the developer to record or cause time share instruments and lien releases to be re-corded and to fulfi ll the other duties imposed by this Article; (12) “Time share salesperson” means a person who sells or off ers to sell on behalf of a developer a time share to a purchaser; and (13) “Time share unit” or “unit” means the real property or real property improvement in a project which is divided into time shares and designated for separate occupancy and use. 93A-42. Time shares deemed real estate. (a) A time share is deemed to be an interest in real estate, and shall be governed by the law of this State relating to real estate. (b) A purchaser of a time share may in accordance with G.S. 47-18 register the time share instrument by which he or she acquired his or her interest and upon such reg-istration shall be entitled to the protection provided by Chapter 47 of the General Statutes for the recordation of other real property instruments. A time share in-strument transferring or encumbering a time share shall not be rejected for recordation because of the nature or duration of that estate, provided all other requirements necessary to make an instrument recordable are com-plied with. (c) Th e developer shall record or cause to be recorded a time share instrument: (1) Not less than six days nor more than 45 days follow-ing the execution of the contract of sale by the pur-chaser; or (2) Not later than 180 days following the execution of the contract of sale by the purchaser, provided that all payments made by the purchaser shall be placed by the developer with an independent es-crow agent upon the expiration of the 10-day es-crow period provided by G.S. 93A-45(c). North Carolina Real Estate License Law and Commission Rules 15 (d) Th e independent escrow agent provided by G.S. 93A-42(c)(2) shall deposit and maintain the purchaser’s payments in an insured trust or escrow account in a bank or savings and loan association located in this State. Th e trust or escrow account may be interest-bearing and the interest earned shall belong to the developer, if agreed upon in writing by the purchaser; provided, however, if the time share instrument is not recorded within the time periods specifi ed in this section, then the interest earned shall belong to the purchaser. Th e independent escrow agent shall return all payments to the purchas-er at the expiration of 180 days following the execution of the contract of sale by the purchaser, unless prior to that time the time share instrument has been recorded. However, if prior to the expiration of 180 days follow-ing the execution of the contract of sale, the developer and the purchaser provide their written consent to the independent escrow agent, the developer’s obligation to record the time share instrument and the escrow period may be extended for an additional period of 120 days. Upon recordation of the time share instrument, the in-dependent escrow agent shall pay the purchaser’s funds to the developer. Upon request by the Commission, the independent escrow agent shall promptly make avail-able to the Commission inspection of records of money held by him or her. (e) In no event shall the developer be required to record a time share instrument if the purchaser is in default of his or her obligations. (f ) Recordation under the provisions of this section of the time share instrument shall constitute delivery of that instrument from the developer to the purchaser. 93A-43. Partition. When a time share is owned by two or more persons as ten-ants in common or as joint tenants either may seek a parti-tion by sale of that interest but no purchaser of a time share may maintain an action for partition by sale or in kind of the unit in which such time share is held. 93A-44. Public off ering statement. Each developer shall fully and conspicuously disclose in a public off ering statement: (1) Th e total fi nancial obligation of the purchaser, which shall include the initial purchase price and any addi-tional charges to which the purchaser may be subject; (2) Any person who has or may have the right to alter, amend or add to charges to which the purchaser may be subject and the terms and conditions un-der which such charges may be imposed; (3) Th e nature and duration of each agreement be-tween the developer and the person managing the time share program or its facilities; (4) Th e date of availability of each amenity and facil-ity of the time share program when they are not completed at the time of sale of a time share; (5) Th e specifi c term of the time share; (6) Th e purchaser’s right to cancel within fi ve days of execution of the contract and how that right may be exercised under G.S. 93A-45; (7) A statement that under North Carolina law an in-strument conveying a time share must be record-ed in the Register of Deeds Offi ce to protect that interest; and (8) Any other information which the Commission may by rule require. Th e public off ering statement shall also contain a one page cover containing a summary of the text of the statement. 93A-45. Purchaser’s right to cancel; escrow; violation. (a) A developer shall, before transfer of a time share and no later than the date of any contract of sale, provide a prospective purchaser with a copy of a public off ering statement containing the information required by G.S. 93A-44. Th e contract of sale is voidable by the pur-chaser for fi ve days after the execution of the contract. Th e contract shall conspicuously disclose the purchas-er’s right to cancel under this subsection and how that right may be exercised. Th e purchaser may not waive this right of cancellation. Any oral or written declara-tion or instrument that purports to waive this right of cancellation is void. (b) A purchaser may elect to cancel within the time period set out in subsection (a) by hand delivering or by mail-ing notice to the developer or the time share salesper-son. Cancellation under this section is without penalty and upon receipt of the notice all payments made prior to cancellation must be refunded immediately. (c) Any payments received by a time share developer or time share salesperson in connection with the sale of the time share shall be immediately deposited by such developer or salesperson in a trust or escrow account in an insured bank or savings and loan association in North Carolina and shall remain in such account for 10 days or cancella-tion by the purchaser, whichever occurs fi rst. Payments held in such trust or escrow accounts shall be deemed to belong to the purchaser and not the developer. In lieu of such escrow requirements, the Commission shall have the authority to accept, in its discretion, alternative fi nancial assurances adequate to protect the purchaser’s interest during the contract cancellation period, includ-ing but not limited to a surety bond, corporate bond, cash deposit or irrevocable letter of credit in an amount equal to the escrow requirements. (d) If a developer fails to provide a purchaser to whom a time share is transferred with the statement as required by subsection (a), the purchaser, in addition to any rights to damages or other relief, is entitled to receive from the developer an amount equal to ten percent (10%) of the sales price of the time share not to exceed three thousand 16 North Carolina Real Estate License Law and Commission Rules dollars ($3,000). A receipt signed by the purchaser stat-ing that he or she has received the statement required by subsection (a) is prima facie evidence of delivery of such statement. 93A-46. Prizes. An advertisement of a time share which includes the off er of a prize or other inducement shall fully comply with the provi-sions of Chapter 75 of the General Statutes. 93A-47. Time shares proxies. No proxy, power of attorney or similar device given by the pur-chaser of a time share regarding the management of the time share program or its facilities shall exceed one year in duration, but the same may be renewed from year to year. 93A-48. Exchange programs. (a) If a purchaser is off ered the opportunity to subscribe to any exchange program, the developer shall, except as provided in subsection (b), deliver to the purchaser, prior to the ex-ecution of (i) any contract between the purchaser and the exchange company, and (ii) the sales contract, at least the following information regarding such exchange program: (1) Th e name and address of the exchange company; (2) Th e names of all offi cers, directors, and shareholders owning fi ve percent (5%) or more of the outstand-ing stock of the exchange company; (3) Whether the exchange company or any of its offi - cers or directors has any legal or benefi cial interest in any developer or managing agent for any time share project participating in the exchange program and, if so, the name and location of the time share proj-ect and the nature of the interest; (4) Unless the exchange company is also the developer a statement that the purchaser’s contract with the ex-change company is a contract separate and distinct from the sales contract; (5) Whether the purchaser’s participation in the ex-change program is dependent upon the contin-ued affi liation of the time share project with the ex-change program; (6) Whether the purchaser’s membership or participa-tion, or both, in the exchange program is voluntary or mandatory; (7) A complete and accurate description of the terms and conditions of the purchaser’s contractual rela-tionship with the exchange company and the pro-cedure by which changes thereto may be made; (8) A complete and accurate description of the proce-dure to qualify for and eff ectuate exchanges; (9) A complete and accurate description of all limita-tions, restrictions, or priorities employed in the op-eration of the exchange program, including, but not limited to, limitations on exchanges based on sea-sonality, unit size, or levels of occupancy, expressed in boldfaced type, and, in the event that such limi-tations, restrictions, or priorities are not uniformly applied by the exchange program, a clear descrip-tion of the manner in which they are applied; (10) Whether exchanges are arranged on a space avail-able basis and whether any guarantees of fulfi ll-ment of specifi c requests for exchanges are made by the exchange program; (11) Whether and under what circumstances an owner, in dealing with the exchange company, may lose the use and occupancy of his or her time share in any properly applied for exchange without his or her being provided with substitute accommoda-tions by the exchange company; (12) Th e expenses, fees or range of fees for participa-tion by owners in the exchange program, a state-ment whether any such fees may be altered by the exchange company, and the circumstances under which alterations may be made; (13) Th e name and address of the site of each time share project or other property which is partici-pating in the exchange program; (14) Th e number of units in each project or other prop-erty participating in the exchange program which are available for occupancy and which qualify for participation in the exchange program, expressed within the following numerical groupings, 1-5, 6-10, 11-20, 21-50 and 51, and over; (15) Th e number of owners with respect to each time share project or other property which are eligible to participate in the exchange program expressed within the following numerical groupings, 1-100, 101-249, 250-499, 500-999, and 1,000 and over, and a statement of the criteria used to determine those owners who are currently eligible to partici-pate in the exchange program; (16) Th e disposition made by the exchange company of time shares deposited with the exchange pro-gram by owners eligible to participate in the ex-change program and not used by the exchange company in eff ecting exchanges; (17) Th e following information which, except as pro-vided in subsection (b) below, shall be indepen-dently audited by a certifi ed public accountant in accordance with the standards of the Accounting Standards Board of the American Institute of Cer-tifi ed Public Accountants and reported for each year no later than July 1, of the succeeding year: a. Th e number of owners enrolled in the exchange program and such numbers shall disclose the relationship between the exchange company and owners as being either fee paying or gra-tuitous in nature; b. Th e number of time share projects or other properties eligible to participate in the ex- North Carolina Real Estate License Law and Commission Rules 17 change program categorized by those having a contractual relationship between the de-veloper or the association and the exchange company and those having solely a contrac-tual relationship between the exchange com-pany and owners directly; c. Th e percentage of confi rmed exchanges, which shall be the number of exchanges confi rmed by the exchange company divided by the number of exchanges properly applied for, together with a complete and accurate state-ment of the criteria used to determine wheth-er an exchange requested was properly ap-plied for; d. Th e number of time shares or other intervals for which the exchange company has an out-standing obligation to provide an exchange to an owner who relinquished a time share or interval during the year in exchange for a time share or interval in any future year; and e. Th e number of exchanges confi rmed by the exchange company during the year; and (18) A statement in boldfaced type to the eff ect that the percentage described in subparagraph (17)c. of subsection (a) is a summary of the exchange re-quests entered with the exchange company in the period reported and that the percentage does not indicate a purchaser’s/owner’s probabilities of be-ing confi rmed to any specifi c choice or range of choices, since availability at individual locations may vary. Th e purchaser shall certify in writing to the receipt of the information required by this subsection and any other information which the Commissioners may by rule require. (b) Th e information required by subdivisions (a), (2), (3), (13), (14), (15), and (17) shall be accurate as of De-cember 31 of the year preceding the year in which the information is delivered, except for information de-livered within the fi rst 180 days of any calendar year which shall be accurate as of December 31 of the year two years preceding the year in which the informa-tion is delivered to the purchaser. Th e remaining in-formation required by subsection (a) shall be accu-rate as of a date which is no more than 30 days prior to the date on which the information is delivered to the purchaser. (c) In the event an exchange company off ers an exchange program directly to the purchaser or owner, the ex-change company shall deliver to each purchaser or owner, concurrently with the off ering and prior to the execution of any contract between the purchas-er or owner and the exchange company the informa-tion set forth in subsection (a) above. Th e require-ments of this paragraph shall not apply to any renew-al of a contract between an owner and an exchange company. (d) All promotional brochures, pamphlets, advertisements, or other materials disseminated by the exchange com-pany to purchasers in this State which contain the per-centage of confi rmed exchanges described in (a)(17)c. must include the statement set forth in (a)(18). 93A-49. Service of process on exchange company. Any exchange company off ering an exchange program to a purchaser shall be deemed to have made an irrevocable appointment of the Commission to receive service of law-ful process in any proceeding against the exchange company arising under this Article. 93A-50. Securities laws apply. Th e North Carolina Securities Act, Chapter 78A, shall also apply, in addition to the laws relating to real estate, to time shares deemed to be investment contracts or to other secu-rities off ered with or incident to a time share; provided, in the event of such applicability of the North Carolina Se-curities Act, any off er or sale of time shares registered un-der this Article shall not be subject to the provisions of G.S. 78A-24 and any real estate broker registered under Article 1 of this Chapter shall not be subject to the provisions of G.S. 78A-36. 93A-51. Rule-making authority. Th e Commission shall have the authority to adopt rules and regulations that are not inconsistent with the provisions of this Article and the General Statutes of North Carolina. Th e Commission may prescribe forms and procedures for submitting information to the Commission. 93A-52. Application for registration of time share project; denial of registration; renewal; reinstate ment; and termination of developer’s interest. (a) Prior to the off ering in this State of any time share located in this State, the developer of the time share project shall make written application to the Commission for the registration of the project. Th e application shall be ac-companied by a fee in an amount fi xed by the Commis-sion but not to exceed one thousand fi ve hundred dol-lars ($1,500), and shall include a description of the proj-ect, copies of proposed time share instruments including public off ering statements, sale contracts, deeds, and oth-er documents referred to therein, information pertaining to any marketing or managing entity to be employed by the developer for the sale of time shares in a time share project or the management of the project, information regarding any exchange program available to the pur-chaser, an irrevocable appointment of the Commission to receive service of any lawful process in any proceeding against the developer or the developer’s time share sales- 18 North Carolina Real Estate License Law and Commission Rules persons arising under this Article, and such other infor-mation as the Commission may by rule require. Upon receipt of a properly completed application and fee and upon a determination by the Commission that the sale and management of the time shares in the time share project will be directed and conducted by persons of good moral character, the Commission shall issue to the developer a certifi cate of registration authorizing the developer to off er time shares in the project for sale. Th e Commission shall within 15 days after receipt of an in-complete application, notify the developer by mail that the Commission has found specifi ed defi ciencies, and shall, within 45 days after the receipt of a properly com-pleted application, either issue the certifi cate of registra-tion or notify the developer by mail of any specifi c ob-jections to the registration of the project. Th e certifi cate shall be prominently displayed in the offi ce of the devel-oper on the site of the project. Th e developer shall promptly report to the Commission any and all changes in the information required to be submitted for the purpose of the registration. Th e de-veloper shall also immediately furnish the Commission complete information regarding any change in its inter-est in a registered time share project. In the event a de-veloper disposes of, or otherwise terminates its interest in a time share project, the developer shall certify to the Commission in writing that its interest in the time share project is terminated and shall return to the Commission for cancellation the certifi cate of registration. (b) In the event the Commission fi nds that there is substantial reason to deny the application for registration as a time share project, the Commission shall notify the applicant that such application has been denied and shall aff ord the applicant an opportunity for a hearing before the Com-mission to show cause why the application should not be denied. In all proceedings to deny a certifi cate of regis-tration, the provisions of Chapter 150B of the General Statutes shall be applicable. (c) Th e acceptance by the Commission of an application for registration shall not constitute the approval of its con-tents or waive the authority of the Commission to take disciplinary action as provided by this Article. (d) All certifi cates of registration granted and issued by the Commission under the provisions of this Article shall ex-pire on the 30th day of June following issuance thereof, and shall become invalid after such date unless reinstat-ed. Renewal of such certifi cate may be eff ected at any time during the month of June preceding the date of ex-piration of such registration upon proper application to the Commission and by the payment of a renewal fee fi xed by the Commission but not to exceed one thou-sand fi ve hundred dollars ($1,500) for each time share project. Th e developer shall, when making application for renewal, also provide a copy of the report required in G.S. 93A-48. Each certifi cate reinstated after the expi-ration date thereof shall be subject to a fee of fi fty dollars ($50.00) in addition to the required renewal fee. In the event a time share developer fails to reinstate the regis-tration within 12 months after the expiration date there-of, the Commission may, in its discretion, consider the time share project as not having been previously regis-tered, and thereby subject to the provisions of this Article relating to the issuance of an original certifi cate. Dupli-cate certifi cates may be issued by the Commission upon payment of a fee of one dollar ($1.00) by the registrant developer. Except as prescribed by Commission rules, all fees paid pursuant to this Article shall be nonrefundable. 93A-53. Register of applicants; roster of registrants; registered projects; fi nancial report to Secretary of State. (a) Th e Executive Director of the Commission shall keep a register of all applicants for certifi cates of registration, showing for each the date of application, name, busi-ness address, and whether the certifi cate was granted or refused. (b) Th e Executive Director of the Commission shall also keep a current roster showing the name and address of all time share projects registered with the Commission. Th e roster shall be kept on fi le in the offi ce of the Com-mission and be open to public inspection. (c) On or before the fi rst day of September of each year, the Commission shall fi le with the Secretary of State a copy of the roster of time share projects registered with the Commission and a report containing a complete state-ment of income received by the Commission in con-nection with the registration of time share projects for the preceding fi scal year ending June 30th attested by the affi davit of the Executive Director of the Commis-sion. Th e report shall be made a part of those annual reports required under the provisions of G.S. 93A- 5. 93A-54. Disciplinary action by Com mission. (a) Th e Commission shall have power to take disciplinary action. Upon its own motion, or on the verifi ed com-plaint of any person, the Commission may investigate the actions of any time share salesperson, developer, or project broker of a time share project registered under this Article, or any other person or entity who shall as-sume to act in such capacity. If the Commission fi nds probable cause that a time share salesperson, develop-er, or project broker has violated any of the provisions of this Article, the Commission may hold a hearing on the allegations of misconduct. Th e Commission shall have the power to suspend or revoke at any time a real estate license issued to a time share salesperson or project broker, or a certifi cate of registration of a time share project issued to a develop-er; or to reprimand or censure such salesperson, devel-oper, or project broker; or to fi ne such developer in the North Carolina Real Estate License Law and Commission Rules 19 amount of fi ve hundred dollars ($500.00) for each vi-olation of this Article, if, after a hearing, the Commis-sion adjudges either the salesperson, developer, or proj-ect broker to be guilty of: (1) Making any willful or negligent misrepresentation or any willful or negligent omission of material fact about any time share or time share project; (2) Making any false promises of a character likely to infl uence, persuade, or induce; (3) Pursuing a course of misrepresentation or making of false promises through agents, salespersons, ad-vertising or otherwise; (4) Failing, within a reasonable time, to account for all money received from others in a time share transaction, and failing to remit such monies as may be required in G.S. 93A- 45 of this Article; (5) Acting as a time share salesperson or time share developer in a manner as to endanger the inter-est of the public; (6) Paying a commission, salary, or other valuable consideration to any person for acts or services performed in violation of this Article; (7) Any other conduct which constitutes improper, fraudulent, or dishonest dealing; (8) Performing or undertaking to perform any legal service as set forth in G.S. 84-2.1, or any other acts not specifi cally set forth in that section; (9) Failing to deposit and maintain in a trust or es-crow account in an insured bank or savings and loan association in North Carolina all money re-ceived from others in a time share transaction as may be required in G.S. 93A-45 of this Article or failing to place with an independent escrow agent the funds of a time share purchaser when required by G.S. 93A-42(c); (10) Failing to deliver to a purchaser a public off ering statement containing the information required by G.S. 93A-44 and any other disclosures that the Commission may by regulation require; (11) Failing to comply with the provisions of Chapter 75 of the General Statutes in the advertising or promotion of time shares for sale, or failing to as-sure such compliance by persons engaged on be-half of a developer; (12) Failing to comply with the provisions of G.S. 93A-48 in furnishing complete and accurate in-formation to purchasers concerning any exchange program which may be off ered to such purchaser; (13) Making any false or fraudulent representation on an application for registration; (14) Violating any rule or regulation promulgated by the Commission; (15) Failing to record or cause to be recorded a time share instrument as required by G.S. 93A-42(c), or failing to provide a purchaser the protection against liens required by G.S. 93A-57(a); or (16) Failing as a time share project broker to exercise reasonable and adequate supervision of the con-duct of sales at his or her project or location by the brokers and salespersons under his or her control. (a1) Th e clear proceeds of fi nes collected pursuant to sub-section (a) of this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. (b) Following a hearing, the Commission shall also have power to suspend or revoke any certifi cate of registra-tion issued under the provisions of this Article or to reprimand or censure any developer when the regis-trant has been convicted or has entered a plea of guilty or no contest upon which fi nal judgment is entered by a court of competent jurisdiction in this State, or any other state, of the criminal off enses of: embezzlement, obtaining money under false pretense, fraud, forgery, conspiracy to defraud, or any other off ense involving moral turpitude which would reasonably aff ect the de-veloper’s performance in the time share business. (c) Th e Commission may appear in its own name in supe-rior court in actions for injunctive relief to prevent any person or entity from violating the provisions of this Article or rules promulgated by the Commission. Th e superior court shall have the power to grant these in-junctions even if criminal prosecution has been or may be instituted as a result of the violations, or regardless of whether the person or entity has been registered by the Commission. (d) Each developer shall maintain or cause to be main-tained complete records of every time share transac-tion including records pertaining to the deposit, main-tenance, and withdrawal of money required to be held in a trust or escrow account, or as otherwise required by the Commission, under G.S. 93A-45 of this Article. Th e Commission may inspect these records periodical-ly without prior notice and may also inspect these re-cords whenever the Commission determines that they are pertinent to an investigation of any specifi c com-plaint against a registrant. (e) When a licensee is accused of any act, omission, or mis-conduct under this Article which would subject the li-censee to disciplinary action, the licensee may, with the consent and approval of the Commission, surrender his or her or its license and all the rights and privileg-es pertaining to it for a period of time to be established by the Commission. A licensee who surrenders his or her or its license shall not be eligible for, or submit any application for, licensure as a real estate broker or reg-istration of a time share project during the period of li-cense surrender. For the purposes of this section, the term licensee shall include a time share developer. 20 North Carolina Real Estate License Law and Commission Rules 93A-55. Private enforcement. Th e provisions of the Article shall not be construed to limit in any manner the right of a purchaser or other person in-jured by a violation of this Article to bring a private action. 93A-56. Penalty for violation of Article. Except as provided in G.S. 93A-40(b) and G.S. 93A-58, any person violating the provisions of this Article shall be guilty of a Class 1 misdemeanor. 93A-57. Release of liens. (a) Prior to any recordation of the instrument transferring a time share, the developer shall record and furnish notice to the purchaser of a release or subordination of all liens aff ecting that time share, or shall provide a surety bond or insurance against the lien from a company acceptable to the Commission as provided for liens on real estate in this State, or such underlying lien document shall contain a provision wherein the lienholder subordinates its rights to that of a time share purchaser who fully complies with all of the provisions and terms of the contract of sale. (b) Unless a time share owner or a time share owner who is his or her predecessor in title agree otherwise with the lienor, if a lien other than a mortgage or deed of trust becomes eff ective against more than one time share in a time share project, any time share owner is entitled to a release of his or her time share from a lien upon payment of the amount of the lien attributable to his or her time share. Th e amount of the payment must be proportionate to the ratio that the time share owner’s liability bears to the liabilities of all time share owners whose interests are subject to the lien. Upon receipt of payment, the lien holder shall promptly deliver to the time share owner a release of the lien covering that time share. After payment, the managing agent may not assess or have a lien against that time share for any portion of the ex-penses incurred in connection with that lien. 93A-58. Registrar required; criminal penal ties; project broker. (a) Every developer of a registered project shall, by affi da-vit fi led with the Commission, designate a natural per-son to serve as time share registrar for its registered proj-ects. Th e registrar shall be responsible for the recorda-tion of time share instruments and the release of liens re-quired by G.S. 93A-42(c) and G.S. 93A-57(a). A devel-oper may, from time to time, change the designated time share registrar by proper fi ling with the Commission and by otherwise complying with this subsection. No sales or off ers to sell shall be made until the registrar is designated for a time share project. Th e registrar has the duty to ensure that the provisions of this Article are complied with in a time share project for which he or she is registrar. No registrar shall record a time share instrument except as provided by this Article. (b) A time share registrar shall be guilty of a Class I felony if he or she knowingly or recklessly fails to record or cause to be recorded a time share instrument as required by this Article. A person responsible as general partner, corporate offi - cer, joint venturer or sole proprietor of the developer of a time share project shall be guilty of a Class I felony if he or she intentionally allows the off ering for sale or the sale of time share to purchasers without fi rst designating a time share registrar. (c) Th e developer shall designate for each project and other lo-cations where time shares are sold or off ered for sale a proj-ect broker. Th e project broker shall act as supervising bro-ker for all time share salespersons at the project or other lo-cation and shall directly, personally, and actively supervise all such persons at the project or other location in a manner to reasonably ensure that the sale of time shares will be con-ducted in accordance with the provisions of this Chapter. 93A-59. Preservation of time share pur chas er’s claims and defenses. (a) For one year following the execution of an instrument of indebtedness for the purchase of a time share, the purchaser of a time share may assert against the sell-er, assignee of the seller, or other holder of the instru-ment of indebtedness, any claims or defenses avail-able against the developer or the original seller, and the purchaser may not waive the right to assert these claims or defenses in connection with a time share pur-chase. Any recovery by the purchaser on a claim as-serted against an assignee of the seller or other holder of the instrument of indebtedness shall not exceed the amount paid by the purchaser under the instrument. A holder shall be the person or entity with the rights of a holder as set forth in G.S. 25-3-301. (b) Every instrument of indebtedness for the purchase of a time share shall set forth the following provision in a clear and conspicuous manner: Sections 93A-60 through 93A-69: Reserved for future codifi cation purposes.
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Title | North Carolina real estate license law : codified as chapter 93A of the General Statutes of North Carolina. |
Other Title | North Carolina Real Estate license law and Commission rules |
Contributor | North Carolina Real Estate Commission. |
Subjects |
Real estate business--Licenses--North Carolina Real estate business--Law and legislation--North Carolina Licenses--North Carolina |
Place | North Carolina, United States |
Description | Caption title from opening screen (viewed on August 22, 2012). |
Publisher | North Carolina Real Estate Commission |
Agency-Current | North Carolina Real Estate Commission |
Rights | State Document see http://digital.ncdcr.gov/u?/p249901coll22,63754 |
Physical Characteristics | 20 p. of electronic text : digital, PDf file. |
Collection | North Carolina State Documents Collection. State Library of North Carolina |
Type | Text |
Language | English |
Format | Laws (documents) |
Digital Characteristics-A | 117 KB; 20 p. |
Digital Collection | North Carolina Digital State Documents Collection |
Digital Format | application/pdf |
Related Items | http://worldcat.org/oclc/807760566/viewonline |
Audience | All |
Pres File Name-M | pubs_ncrealestate.pdf |
Pres Local File Path-M | \Preservation_content\StatePubs\pubs_borndigital\images_master\ |
Full Text | North Carolina Real Estate License Law and Commission Rules 1 Section 93A-1 License required of real estate brokers. 93A-2 Defi nitions and exceptions. 93A-3 Commission created; compensation; organi-za tion. 93A-4 Applications for licenses; fees; qualifi caions; examina tions; privilege licenses; re new al or reinstate ment of license; power to en force provisions. 93A-4.1 Continuing education. 93A-4.2 Broker-in-charge qualifi cation. 93A-4.3 Elimination of salesperson license; conver-sion of salesperson license to broker licenses. 93A-5 Register of applicants; roster of brokers; fi nan-cial report to Secretary of State. 93A-6 Disciplinary action by Commission. 93A-6.1 Commission may subpoena witnesses, re-cords, documents, or other materials. 93A-7 Power of courts to revoke. 93A-8 Penalty for violation of Chapter. 93A-9 Licensing nonresidents. 93A-10 Nonresident licensees; fi ling of consent as to service of process and pleadings. 93A-11 Reimbursement by real estate independent contractor of brokers’ workers’ compensation. 93A-12 Disputed Monies 93A-13 to 93A-15 [Reserved.] Section 93A-16 Real Estate Recovery Fund created; payment to fund; management. 93A-17 Grounds for payment; notice and application to Commission. 93A-18 Hearing; required showing. 93A-19 Response and defense by Commission and judgment debtor; proof of conversion. 93A-20 Order directing payment out of fund; com-promise of claims. 93A-21 Limitations; pro rata distribution; attorney fees. 93A-22 Repayment to fund; automatic suspension of license. 93A-23 Subrogation of rights. 93A-24 Waiver of rights. 93A-25 Persons ineligible to recover from fund. 93A-26 Disciplinary action against licensee. 93A-27 to 93A-31 [Reserved] Section 93A-39 Title. 93A-40 Registration required of time share projects; real estate salespersons license required. 93A-41 Defi nitions. 93A-42 Time shares deemed real estate. 93A-43 Partition. 93A-44 Public off ering statement. 93A-45 Purchaser’s right to cancel; escrow; viola tion. 93A-46 Prizes. 93A-47 Time shares proxies. 93A-48 Exchange programs. 93A-49 Service of process on exchange company. 93A-50 Securities laws apply. 93A-51 Rule-making authority. 93A-52 Application for registration of time share project; denial of registration; renewal; rein statement; and termina tion of developer’s in terest. 93A-53 Register of applicants; roster of registrants; registered projects; fi nancial report to Secre-tary of State. 93A-54 Disciplinary action by Commission. 93A-55 Private enforcement. 93A-56 Penalty for violation of Article. 93A-57 Release of liens. 93A-58 Registrar required; criminal penalties; project broker. 93A-59 Preservation of time share purchaser’s claims and defenses. 93A-60 to 93A-69 [Reserved] 2 North Carolina Real Estate License Law and Commission Rules 93A-1. License required of real estate brokers. From and after July 1, 1957, it shall be unlawful for any per-son, partnership, corporation, limited liability company, as-sociation, or other business entity in this State to act as a real estate broker, or directly or indirectly to engage or assume to engage in the business of real estate broker or to adver-tise or hold himself or herself or themselves out as engaging in or conducting such business without fi rst obtaining a li-cense issued by the North Carolina Real Estate Commission (hereinafter referred to as the Commission), under the pro-visions of this Chapter. A license shall be obtained from the Commission even if the person, partnership, corporation, limited liability company, association, or business entity is licensed in another state and is affi liated or otherwise associ-ated with a licensed real estate broker in this State. 93A-2. Defi nitions and exceptions. (a) A real estate broker within the meaning of this Chapter is any person, partnership, corporation, limited liabil-ity company, association, or other business entity who for a compensation or valuable consideration or prom-ise thereof lists or off ers to list, sells or off ers to sell, buys or off ers to buy, auctions or off ers to auction (specifi cal-ly not including a mere crier of sales), or negotiates the purchase or sale or exchange of real estate, or who leas-es or off ers to lease, or who sells or off ers to sell leases of whatever character, or rents or off ers to rent any real es-tate or the improvement thereon, for others. (a1) Th e term broker-in-charge within the meaning of this Chapter shall mean a real estate broker who has been designated as the broker having responsibility for the supervision of real estate salespersons engaged in real estate brokerage at a particular real estate offi ce and for other administrative and supervisory duties as the Commission shall prescribe by rule. (a2) Th e term provisional broker within the meaning of this Chapter means a real estate broker who, pending ac-quisition and documentation to the Commission of the education or experience prescribed by either G.S. 93A-4(a1) or G.S. 93A-4.3, must be supervised by a broker-in-charge when performing any act for which a real estate license is required. (b) Th e term real estate salesperson within the meaning of this Chapter shall mean and include any person who was formerly licensed by the Commission as a real es-tate salesperson before April 1, 2006. (c) Th e provisions of this Chapter shall not apply to and shall not include: (1) Any person, partnership, corporation, limited liabil-ity company, association, or other business entity who, as owner or lessor, shall perform any of the acts aforesaid with reference to property owned or leased by them, where the acts are performed in the regular course of or as incident to the management of that property and the investment therein. (2) Any person acting as an attorney-in-fact under a duly executed power of attorney from the owner autho-rizing the fi nal consummation of performance of any contract for the sale, lease or exchange of real estate. (3) Th e acts or services of an attorney-at-law. (4) Any person, while acting as a receiver, trustee in bankruptcy, guardian, administrator or executor or any person acting under order of any court. (5) Any person, while acting as a trustee under a trust agreement, deed of trust or will, or his or her regular salaried employees. (6) Any salaried person employed by a licensed real es-tate broker, for and on behalf of the owner of any real estate or the improvements thereon, which the licensed broker has contracted to manage for the owner, if the salaried employee is limited in his or her employment to: exhibiting units on the real es-tate to prospective tenants; providing the prospec-tive tenants with information about the lease of the units; accepting applications for lease of the units; completing and executing preprinted form leases; and accepting security deposits and rental payments for the units only when the deposits and rental pay-ments are made payable to the owner or the bro-ker employed by the owner. Th e salaried employ-ee shall not negotiate the amount of security depos-its or rental payments and shall not negotiate leases or any rental agreements on behalf of the owner or broker. (7) Any owner who personally leases or sells his or her own property. (8) Any housing authority organized in accordance with the provisions of Chapter 157 of the General Stat-utes and any regular salaried employees of the hous-ing authority when performing acts authorized in this Chapter as to any property owned or leased by the housing authority. Th is exception shall not ap-ply to any person, partnership, corporation, limited liability company, association, or other business en-tity that contracts with a housing authority to sell or manage property owned or leased by the hous-ing authority. North Carolina Real Estate License Law and Commission Rules 3 93A-3. Commission created; compensation; organization. (a) Th ere is hereby created the North Carolina Real Es-tate Commission, hereinafter called the Commission. Th e Commission shall consist of nine members, sev-en members to be appointed by the Governor, one member to be appointed by the General Assembly upon the recommendation of the President Pro Tem-pore of the Senate in accordance with G.S. 120-121, and one member to be appointed by the General As-sembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121. At least three members of the Commission shall be licensed real estate brokers. At least two mem-bers of the Commission shall be persons who are not involved directly or indirectly in the real estate or real estate appraisal business. Members of the Commission shall serve three-year terms so staggered that the terms of three members expire in one year, the terms of three members expire in the next year, and the terms of three members expire in the third year of each three-year pe-riod. Th e members of the Commission shall elect one of their members to serve as chairman of the Commis-sion for a term of one year. Th e Governor may re-move any member of the Commission for misconduct, incompetency, or willful neglect of duty. Th e Gover-nor shall have the power to fi ll all vacancies occurring on the Commission, except vacancies in legislative ap-pointments shall be fi lled under G.S. 120-122. (b) Th e provisions of G.S. 93B-5 notwithstanding, members of the Commission shall receive as compensation for each day spent on work for the Commission a per diem in an amount established by the Commission by rule, and mileage reimbursement for transportation by private-ly owned automobile at the business standard mileage rate set by the Internal Revenue Service per mile of trav-el along with actual cost of tolls paid. Th e total expense of the administration of this Chapter shall not exceed the total income therefrom; and none of the expenses of said Commission or the compensation or expenses of any of-fi ce thereof or any employee shall ever be paid or pay-able out of the treasury of the State of North Carolina; and neither the Commission nor any offi cer or employee thereof shall have any power or authority to make or in-cur any expense, debt or other fi nancial obligation bind-ing upon the State of North Carolina. After all expenses of operation, the Commission may set aside an expense reserve each year. Th e Commission may deposit moneys in accounts, certifi cates of deposit, or time deposits as the Commission may approve, in any bank, savings and loan association, or trust company. Moneys also may be in-vested in the same classes of securities referenced in G.S. 159-30(c). (c) Th e Commission shall have power to make reasonable bylaws, rules and regulations that are not inconsistent with the provisions of this Chapter and the General Statutes; provided, however, the Commission shall not make rules or regulations regulating commissions, sala-ries, or fees to be charged by licensees under this Chap-ter. (c1) Th e provisions of G.S. 93A-1 and G.S. 93A-2 notwith-standing, the Commission may adopt rules to permit a real estate broker to pay a fee or other valuable consider-ation to a travel agent for the introduction or procure-ment of tenants or potential tenants in vacation rent-als as defi ned in G.S. 42A-4. Rules adopted pursuant to this subsection may include a defi nition of the term ‘travel agent’, may regulate the conduct of permitted transations, and may limit the amount of the fee or the value of the consideration that may be paid to the trav-el agent. However, the Commission may not authorize a person or entity not licensed as a broker to negotiate any real estate transaction on behalf of another. (c2) Th e Commission shall adopt a seal for its use, which shall bear thereon the words “North Carolina Real Es-tate Commission.” Copies of all records and papers in the offi ce of the Commission duly certifi ed and au-thenticated by the seal of the Commission shall be re-ceived in evidence in all courts and with like eff ect as the originals. (d) Th e Commission may employ an Executive Director and professional and clerical staff as may be necessary to carry out the provisions of this Chapter and to put into eff ect the rules and regulations that the Commis-sion may promulgate. Th e Commission shall fi x salaries and shall require employees to make good and suffi cient surety bond for the faithful performance of their duties. Th e Commission shall reimburse its employees for trav-el on offi cial business. Mileage expenses for transporta-tion by privately owned automobile shall be reimbursed at the business standard mileage set by the Internal Rev-enue Service per mile of travel along with the actual tolls paid. Other travel expenses shall be reimbursed in accor-dance with G.S. 138-6. Th e Commission may, when it deems it necessary or convenient, delegate to the Execu-tive Director, legal counsel for the Commission, or oth-er Commission staff , professional or clerical, the Com-mission’s authority and duties under this Chapter, but the Commission may not delegate its authority to make rules or its duty to act as a hearing panel in accordance with the provisions of G.S. 150B-40(b). (e) Th e Commission shall be entitled to the services of the Attorney General of North Carolina, in connection with the aff airs of the Commission or may on approval of the Attorney General, employ an attorney to assist or represent it in the enforcement of this Chapter, as to specifi c matters, but the fee paid for such service shall be approved by the Attorney General. Th e Commis-sion may prefer a complaint for violation of this Chap-ter before any court of competent jurisdiction, and it 4 North Carolina Real Estate License Law and Commission Rules may take the necessary legal steps through the proper legal offi ces of the State to enforce the provisions of this Chapter and collect the penalties provided therein. (f ) Th e Commission is authorized to acquire, hold, convey, rent, encumber, alienate, and otherwise deal with real property in the same manner as a private person or cor-poration, subject only to the approval of the Governor and Council of State. Th e rents, proceeds, and other revenues and benefi ts of the ownership of real property shall inure to the Commission. Collateral pledged by the Commission for any encumbrance of real property shall be limited to the assets, income, and revenues of the Commission. Leases, deeds, and other instruments relating to the Commission’s interest in real property shall be valid when executed by the executive director of the Commission. Th e Commission may create and conduct education and information programs relating to the real estate business for the information, educa-tion, guidance and protection of the general public, li-censees, and applicants for license. Th e education and information programs may include preparation, print-ing and distribution of publications and articles and the conduct of conferences, seminars, and lectures. Th e Commission may claim the copyright to written ma-terials it creates and may charge fees for publications and programs. 93A-4. Applications for licenses; fees; qualifi cations; examinations; privilege licenses; renewal or reinstatement of license; power to enforce provisions. (a) Any person, partnership, corporation, limited liability company, association, or other business entity hereafter desiring to enter into business of and obtain a license as a real estate broker shall make written application for such license to the Commission in the form and manner prescribed by the Commission. Each appli-cant for a license as a real estate broker shall be at least 18 years of age. Each applicant for a license as a real es-tate broker shall, within three years preceding the date the application is made, have satisfactorily completed, at a school approved by the Commission, an educa-tion program consisting of at least 75 hours of class-room instruction in subjects determined by the Com-mission, or shall possess real estate education or experi-ence in real estate transactions which the Commission shall fi nd equivalent to the education program. Each applicant for a license as a real estate broker shall be re-quired to pay a fee, fi xed by the Commission but not to exceed thirty dollars ($30.00). (a1) Each person who is issued a real estate broker license on or after April 1, 2006, shall initially be classifi ed as a provisional broker and shall, within three years follow-ing initial licensure, satisfactorily complete, at a school approved by the Commission, a postlicensing educa-tion program consisting of 90 hours of classroom in-struction in subjects determined by the Commission or shall possess real estate education or experience in real estate transactions which the Commission shall fi nd equivalent to the education program. Th e Com-mission may, by rule, establish a schedule for comple-tion of the prescribed postlicensing education that re-quires provisional brokers to complete portions of the 90-hour postlicensing education program in less than three years, and provisional brokers must comply with this schedule in order to be entitled to actively engage in real estate brokerage. Upon completion of the postli-censing education program, the provisional status of the broker’s license shall be terminated. When a provi-sional broker fails to complete all 90 hours of required postlicensing education within three years following initial licensure, the broker’s license shall be cancelled, and the Commission may, in its discretion, require the person whose license was cancelled to satisfy the postli-censing education program and the requirements for original licensure prescribed in this Chapter as a con-dition of license reinstatement, including the exami-nation requirements and the license reinstatement fee prescribed by subsection (c) of this section. (a2) An approved school shall pay a fee of ten dollars ($10.00) per licensee to the Commission for each li-censee completing a postlicensing education course conducted by the school, provided that these fees shall not be charged to a community college, junior col-lege, college, or university located in this State and ac-credited by the Southern Association of Colleges and Schools. (b) Except as otherwise provided in this Chapter, any per-son who submits an application to the Commission in proper manner for a license as real estate broker shall be required to take an examination. Th e examination may be administered orally, by computer, or by any other method the Commission deems appropriate. Th e Commission may require the applicant to pay the Com-mission or a provider contracted by the Commission the actual cost of the examination and its administration. Th e cost of the examination and its administration shall be in addition to any other fees the applicant is required to pay under subsection (a) of this section. Th e exam-ination shall determine the applicant’s qualifi cations with due regard to the paramount interests of the pub-lic as to the applicant’s competency. A person who fails the license examination shall be entitled to know the re-sult and score. A person who passes the exam shall be notifi ed only that the person passed the examination. Whether a person passed or failed the examination shall be a matter of public record; however, the scores for li-cense examinations shall not be considered public re-cords. Nothing in this subsection shall limit the rights granted to any person under G.S. 93B-8. North Carolina Real Estate License Law and Commission Rules 5 An applicant for licensure under this Chapter shall sat-isfy the Commission that he or she possesses the compe-tency, honesty, truthfulness, integrity, and general mor-al character necessary to protect the public interest and promote public confi dence in the real estate brokerage business. Th e Commission may investigate the moral character of each applicant for licensure and require an applicant to provide the Commission with a criminal record report. All applicants shall obtain criminal re-cord reports from one or more reporting services des-ignated by the Commission to provide criminal record reports. Applicants are required to pay the designated reporting service for the cost of these reports. If the re-sults of any required competency examination and in-vestigation of the applicant’s moral character shall be satisfactory to the Commission, then the Commission shall issue to the applicant a license, authorizing the ap-plicant to act as a real estate broker in the State of North Carolina, upon the payment of privilege taxes now re-quired by law or that may hereafter be required by law. Notwithstanding G.S. 150B-38(c), in a contested case commenced upon the request of a party applying for licensure regarding the question of the moral charac-ter or fi tness of the applicant, if notice has been reason-ably attempted, but cannot be given to the applicant personally or by certifi ed mail in accordance with G.S. 150B-38(c), the notice of hearing shall be deemed giv-en to the applicant when a copy of the notice is depos-ited in an offi cial depository of the United States Postal Service addressed to the applicant at the latest mailing address provided by the applicant to the Commission or by any other means reasonably designed to achieve actual notice to the applicant. (b1) Th e Department of Justice may provide a criminal re-cord check to the Commission for a person who has ap-plied for a license through the Commission. Th e Com-mission shall provide to the Department of Justice, along with the request, the fi ngerprints of the applicant, any additional information required by the Department of Justice, and a form signed by the applicant consent-ing to the check of the criminal record and to the use of the fi ngerprints and other identifying information re-quired by the State or national repositories. Th e appli-cant’s fi ngerprints shall be forwarded to the State Bu-reau of Investigation for a search of the State’s criminal history record fi le, and the State Bureau of Investiga-tion shall forward a set of the fi ngerprints to the Federal Bureau of Investigation for a national criminal history check. Th e Commission shall keep all information pur-suant to this subsection privileged, in accordance with applicable State law and federal guidelines, and the in-formation shall be confi dential and shall not be a public record under Chapter 132 of the General Statutes. Th e Department of Justice may charge each applicant a fee for conducting the checks of criminal history re-cords authorized by this subsection. (c) All licenses issued by the Commission under the pro-visions of this Chapter shall expire on the 30th day of June following issuance or on any other date that the Commission may determine and shall become invalid after that date unless reinstated. A license may be re-newed 45 days prior to the expiration date by fi ling an application with and paying to the Executive Director of the Commission the license renewal fee. Th e license renewal fee is thirty dollars ($30.00) unless the Com-mission sets the fee at a higher amount. Th e Commis-sion may set the license renewal fee at an amount that does not exceed fi fty dollars ($50.00). Th e license re-newal fee may not increase by more than fi ve dollars ($5.00) during a 12-month period. Th e Commission may adopt rules establishing a system of license renew-al in which the licenses expire annually with varying expiration dates. Th ese rules shall provide for prorat-ing the annual fee to cover the initial renewal period so that no licensee shall be charged an amount greater than the annual fee for any 12-month period. Th e fee for reinstatement of an expired license shall be fi fty-fi ve dollars ($55.00). In the event a licensee fails to ob-tain a reinstatement of such license within six months after the expiration date thereof, the Commission may, in its discretion, consider such person as not having been previously licensed, and thereby subject to the provisions of this Chapter relating to the issuance of an original license, including the examination require-ments set forth herein. Duplicate licenses may be is-sued by the Commission upon payment of a fee of fi ve dollars ($5.00) by the licensee. Commission certifi ca-tion of a licensee’s license history shall be made only af-ter the payment of a fee of ten dollars ($10.00). (d) Th e Commission is expressly vested with the power and authority to make and enforce any and all reason-able rules and regulations connected with license ap-plication, examination, renewal, and reinstatement as shall be deemed necessary to administer and enforce the provisions of this Chapter. Th e Commission is further authorized to adopt reasonable rules and regu-lations necessary for the approval of real estate schools, instructors, and textbooks and rules that prescribe spe-cifi c requirements pertaining to instruction, adminis-tration, and content of required education courses and programs. (e) Nothing contained in this Chapter shall be construed as giving any authority to the Commission nor any li-censee of the Commission as authorizing any licens-ee to engage in the practice of law or to render any le-gal service as specifi cally set out in G.S. 84-2.1 or any other legal service not specifi cally referred to in said section. 6 North Carolina Real Estate License Law and Commission Rules 93A-4.1. Continuing education. (a) Th e Commission shall establish a program of continu-ing education for real estate brokers. An individual li-censed as a real estate broker is required to complete continuing education requirements in an amount not to exceed eight classroom hours of instruction a year during any license renewal period in subjects and at times the Commission deems appropriate. Any licens-ee who fails to complete continuing education require-ments pursuant to this section shall not actively engage in the business of real estate broker. (a1) Th e Commission may, as part of the broker continu-ing education requirements, require real estate bro-kers- in-charge to complete during each annual license period a special continuing education course consist-ing of not more than four classroom hours of instruc-tion in subjects prescribed by the Commission. (b) Th e Commission shall establish procedures allowing for a deferral of continuing education for brokers while they are not actively engaged in real estate brokerage. (c) Th e Commission may adopt any reasonable rules not inconsistent with this Chapter to give purpose and ef-fect to the continuing education requirement, includ-ing rules that govern: (1) Th e content and subject matter of continuing ed-ucation courses. (2) Th e curriculum of courses required. (3) Th e criteria, standards, and procedures for the ap-proval of courses, course sponsors, and course in-structors. (4) Th e methods of instruction. (5) Th e computation of course credit. (6) Th e ability to carry forward course credit from one year to another. (7) Th e deferral of continuing education for brokers and salespersons not engaged in brokerage. (8) Th e waiver of or variance from the continuing edu-cation requirement for hardship or other reasons. (9) Th e procedures for compliance and sanctions for noncompliance. (d) Th e Commission may establish a nonrefundable course application fee to be charged to a course sponsor for the review and approval of a proposed continuing ed-ucation course. Th e fee shall not exceed one hundred twenty-fi ve dollars ($125.00) per course. Th e Com-mission may charge the sponsor of an approved course a nonrefundable fee not to exceed seventy-fi ve dollars ($75.00) for the annual renewal of course approval. An approved course sponsor shall pay a fee of ten dol-lars ($10.00) per licensee to the Commission for each licensee completing an approved continuing education course conducted by the sponsor. Th e Commission shall not charge a course application fee, a course renewal fee, or any other fee for a con-tinuing education course sponsored by a community college, junior college, college, or university located in this State and accredited by the Southern Association of Colleges and Schools. (e) Th e Commission may award continuing education credit for an unapproved course or related education-al activity. Th e Commission may prescribe procedures for a licensee to submit information on an unapproved course or related educational activity for continuing education credit. Th e Commission may charge a fee to the licensee for each course or activity submitted. Th e fee shall not exceed fi fty dollars ($50.00). 93A-4.2. Broker-in-charge qualifi cation. To be qualifi ed to serve as a broker-in-charge of a real es-tate offi ce, a real estate broker shall possess at least two years of full-time real estate brokerage experience or equivalent part-time real estate brokerage experience within the previ-ous fi ve years or real estate education or experience in real estate transactions that the Commission fi nds equivalent to such experience and shall complete, within a time pre-scribed by the Commission, a course of study prescribed by the Commission for brokers-in-charge not to exceed 12 classroom hours of instruction. A provisional broker may not be designated as a broker-in-charge. 93A-4.3. Elimination of salesperson license; conversion of salesperson licenses to broker licenses. (a) Eff ective April 1, 2006, the Commission shall discon-tinue issuing real estate salesperson licenses. Also eff ec-tive April 1, 2006, all salesperson licenses shall become broker licenses, and each person holding a broker li-cense that was changed from salesperson to broker on that date shall be classifi ed as a provisional broker as defi ned in G.S. 93A-2(a2). (b) A provisional broker as contemplated in subsection (a) of this section who was issued a salesperson license prior to October 1, 2005, shall, not later than April 1, 2008, complete a broker transition course prescribed by the Commission, not to exceed 24 classroom hours of in-struction, or shall demonstrate to the Commission that he or she possesses four years’ full-time real estate broker-age experience or equivalent part-time real estate broker-age experience within the previous six years. If the provi-sional broker satisfi es this requirement by April 1, 2008, the provisional status of his or her broker license will be terminated, and the broker will not be required to com-plete the 90-classroom-hour broker postlicensing educa-tion program prescribed by G.S. 93A-4(a1). If the provi-sional broker fails to satisfy this requirement by April 1, 2008, his or her license will be placed on inactive status, if not already on inactive status, and he or she must com-plete the 90-classroom-hour broker postlicensing educa-tion program prescribed by G.S. 93A-4(a1) in order to terminate the provisional status of the broker license and to be eligible to return his or her license to active status. North Carolina Real Estate License Law and Commission Rules 7 (c) An approved school or sponsor shall pay a fee of ten dol-lars ($10.00) per licensee to the Commission for each licensee completing a broker transition course con-ducted by the school or sponsor, provided that these fees shall not be charged to a community college, ju-nior college, college, or university located in this State and accredited by the Southern Association of Colleg-es and Schools. (d) A provisional broker as contemplated in subsection (a) of this section, who was issued a salesperson license be-tween October 1, 2005, and March 31, 2006, shall, not later than April 1, 2009, satisfy the requirements of G.S. 93A-4(a1). Upon satisfaction of the requirements of G.S. 93A-4(a1), the provisional status of the bro-ker’s license will be terminated. If the provisional bro-ker fails to satisfy the requirements of G.S. 93A-4(a1) by April 1, 2009, the broker’s license shall be cancelled, and the person will be subject to the requirements for licensure reinstatement prescribed by G.S. 93A-4(a1). (e) A broker who was issued a broker license prior to April 1, 2006, shall not be required to complete either the 90-classroom-hour broker postlicensing education pro-gram prescribed by G.S. 93A-4(a1) or the broker transi-tion course prescribed by subsection (b) of this section. (f ) For the purpose of determining a licensee’s status, rights, and obligations under this section, the Commission may treat a person who is issued a license on or after the October 1, 2005, or April 1, 2006, dates cited in subsec-tions (a), (b), (d), or (e) of this section as though the per-son had been issued a license prior to those dates if the only reason the person’s license was not issued prior to those dates was that the person’s application was pend-ing a determination by the Commission as to whether the applicant possessed the requisite moral character for licensure. If a license application is pending on April 1, 2006, for any reason other than a determination by the Commission as to the applicant’s moral character for li-censure, and if the applicant has not satisfi ed all educa-tion and examination requirements for licensing in ef-fect on April 1, 2006, the applicant’s application shall be cancelled and the application fee refunded. (g) No applications for a real estate salesperson license shall be accepted by the Commission between September 1, 2005, and September 30, 2005. 93A-5. Register of applicants; roster of brokers; fi nancial report to Secretary of State. (a) Th e Executive Director of the Commission shall keep a register of all applicants for license, showing for each the date of application, name, place of residence, and whether the license was granted or refused. Said regis-ter shall be prima facie evidence of all matters record-ed therein. (b) Th e Executive Director of the Commission shall also keep a current roster showing the names and places of business of all licensed real estate brokers, which roster shall be kept on fi le in the offi ce of the Commission and be open to public inspection. (c) On or before the fi rst day of September of each year, the Commission shall fi le with the Secretary of State a copy of the roster of real estate brokers holding certifi cates of license, and at the same time shall also fi le with the Sec-retary of State a report containing a complete statement of receipts and disbursements of the Commission for the preceding fi scal year ending June 30 attested by the affi davit of the Executive Director of the Commission. 93A-6. Disciplinary action by Commission. (a) Th e Commission has the power to take disciplinary action. Upon its own initiative, or on the complaint of any person, the Commission may investigate the actions of any person or entity licensed under this Chapter, or any other person or entity who shall assume to act in such capacity. If the Commission fi nds probable cause that a licensee has violat-ed any of the provisions of this Chapter, the Commission may hold a hearing on the allegations of misconduct. Th e Commission has the power to suspend or revoke at any time a license issued under the provisions of this Chapter, or to reprimand or censure any licensee, if, fol-lowing a hearing, the Commission adjudges the licensee to be guilty of: (1) Making any willful or negligent misrepresentation or any willful or negligent omission of material fact. (2) Making any false promises of a character likely to infl uence, persuade, or induce. (3) Pursuing a course of misrepresentation or mak-ing of false promises through agents, advertising or otherwise. (4) Acting for more than one party in a transaction without the knowledge of all parties for whom he or she acts. (5) Accepting a commission or valuable consider-ation as a real estate salesperson for the perfor-mance of any of the acts specifi ed in this Article or Article 4 of this Chapter, from any person ex-cept his or her broker-in-charge or licensed bro-ker by whom he or she is employed. (6) Representing or attempting to represent a real es-tate broker other than the broker by whom he or she is engaged or associated, without the express knowledge and consent of the broker with whom he or she is associated. (7) Failing, within a reasonable time, to account for or to remit any moneys coming into his or her possession which belong to others. (8) Being unworthy or incompetent to act as a real estate broker in a manner as to endanger the in-terest of the public. (9) Paying a commission or valuable consideration to 8 North Carolina Real Estate License Law and Commission Rules any person for acts or services performed in vio-lation of this Chapter. (10) Any other conduct which constitutes improper, fraudulent or dishonest dealing. (11) Performing or undertaking to perform any legal service, as set forth in G.S. 84-2.1, or any other acts constituting the practice of law. (12) Commingling the money or other property of his or her principals with his or her own or failure to maintain and deposit in a trust or escrow ac-count in an insured bank or savings and loan as-sociation in North Carolina all money received by him or her as a real estate licensee acting in that capacity, or an escrow agent, or the custodian or manager of the funds of another person or enti-ty which relate to or concern that person’s or en-tity’s interest or investment in real property, pro-vided, these accounts shall not bear interest unless the principals authorize in writing the deposit be made in an interest bearing account and also pro-vide for the disbursement of the interest accrued. (13) Failing to deliver, within a reasonable time, a completed copy of any purchase agreement or of-fer to buy and sell real estate to the buyer and to the seller. (14) Failing, at the time the transaction is consum-mated, to deliver to the seller in every real estate transaction, a complete detailed closing statement showing all of the receipts and disbursements han-dled by him or her for the seller or failing to deliv-er to the buyer a complete statement showing all money received in the transaction from the buyer and how and for what it was disbursed. (15) Violating any rule or regulation promulgated by the Commission. Th e Executive Director shall transmit a certifi ed copy of all fi nal orders of the Commission suspending or re-voking licenses issued under this Chapter to the clerk of superior court of the county in which the licensee maintains his or her principal place of business. Th e clerk shall enter these orders upon the judgment dock-et of the county. (b) Following a hearing, the Commission shall also have power to suspend or revoke any license issued under the provisions of this Chapter or to reprimand or cen-sure any licensee when: (1) Th e licensee has obtained a license by false or fraud-ulent representation; (2) Th e licensee has been convicted or has entered a plea of guilty or no contest upon which fi nal judg-ment is entered by a court of competent jurisdic-tion in this State, or any other state, of the crim-inal off enses of: embezzlement, obtaining money under false pretense, fraud, forgery, conspiracy to defraud, or any other off ense involving moral tur-pitude which would reasonably aff ect the licens-ee’s performance in the real estate business; (3) Th e licensee has violated any of the provisions of G.S. 93A-6(a) when selling, leasing, or buying his or her own property; (4) Th e broker’s unlicensed employee, who is ex-empt from the provisions of this Chapter under G.S. 93A-2(c)(6), has committed, in the regu-lar course of business, any act which, if commit-ted by the broker, would constitute a violation of G.S. 93A-6(a) for which the broker could be dis-ciplined; or (5) Th e licensee, who is also a State-licensed or State-certifi ed real estate appraiser pursuant to Chapter 93E of the General Statutes, has violat-ed any provisions of Chapter 93E of the General Statutes and has been reprimanded or has had his or her appraiser license or certifi cate suspended or revoked by the Appraisal Board. (c) Th e Commission may appear in its own name in supe-rior court in actions for injunctive relief to prevent any person from violating the provisions of this Chapter or rules promulgated by the Commission. Th e superior court shall have the power to grant these injunctions even if criminal prosecution has been or may be insti-tuted as a result of the violations, or whether the per-son is a licensee of the Commission. (d) Each broker shall maintain complete records showing the deposit, maintenance, and withdrawal of mon-ey or other property owned by his or her principals or held in escrow or in trust for his or her principals. Th e Commission may inspect these records periodical-ly, without prior notice and may also inspect these re-cords whenever the Commission determines that they are pertinent to an investigation of any specifi c com-plaint against a licensee. (e) When a person or entity licensed under this Chapter is accused of any act, omission, or misconduct which would subject the licensee to disciplinary action, the licensee, with the consent and approval of the Com-mission, may surrender his or her or its license and all the rights and privileges pertaining to it for a period of time established by the Commission. A person or en-tity who surrenders his or her or its license shall not thereafter be eligible for or submit any application for licensure as a real estate broker or salesperson during the period of license surrender. (f ) In any contested case in which the Commission takes disciplinary action authorized by any provision of this Chapter, the Commission may also impose reasonable conditions, restrictions, and limitations upon the li-cense, registration, or approval issued to the disciplined person or entity. In any contested case concerning an application for licensure, time share project registration, or school, sponsor, instructor, or course approval, the North Carolina Real Estate License Law and Commission Rules 9 Commission may impose reasonable conditions, restric-tions, and limitations on any license, registration, or ap-proval it may issue as a part of its fi nal decision. 93A-6.1. Commission may subpoena witnesses, records, documents, or other materials. (a) Th e Commission, Executive Director, or other repre-sentative designated by the Commission may issue a subpoena for the appearance of witnesses deemed nec-essary to testify concerning any matter to be heard be-fore or investigated by the Commission. Th e Com-mission may issue a subpoena ordering any person in possession of records, documents, or other materi-als, however maintained, that concern any matter to be heard before or investigated by the Commission to produce the records, documents, or other materials for inspection or deliver the same into the custody of the Commission’s authorized representatives. Upon writ-ten request, the Commission shall revoke a subpoena if it fi nds that the evidence, the production of which is required, does not relate to a matter in issue, or if the subpoena does not describe with suffi cient particulari-ty the evidence, the production of which is required, or if for any other reason in law the subpoena is invalid. If any person shall fail to fully and promptly comply with a subpoena issued under this section, the Commission may apply to any judge of the superior court resident in any county where the person to whom the subpoena is issued maintains a residence or place of business for an order compelling the person to show cause why he or she should not be held in contempt of the Commis-sion and its processes. Th e court shall have the power to impose punishment for acts that would constitute direct or indirect contempt if the acts occurred in an action pending in superior court. (b) Th e Commission shall be exempt from the require-ments of Chapter 53B of the General Statutes with re-gard to subpoenas issued to compel the production of a licensee’s trust account records held by any fi nancial in-stitution. Notwithstanding that exemption, the Com-mission shall serve, pursuant to G.S. 1A-1, Rule 4(j) of the N.C. Rules of Civil Procedure or by certifi ed mail to the licensee’s last known address, a copy of the sub-poena and notice that the subpoena has been served upon the fi nancial institution. Service of the subpoe-na and notice on the licensee shall be made within 10 days following service of the subpoena on the fi nancial institution holding the trust account records. 93A-7. Power of courts to revoke. Whenever any person, partnership, association or corpora-tion claiming to have been injured or damaged by the gross negligence, incompetency, fraud, dishonesty or misconduct on the part of any licensee following the calling or engaging in the business herein described and shall fi le suit upon such claim against such licensee in any court of record in this State and shall recover judgment thereon, such court may as part of its judgment or decree in such case, if it deem it a proper case in which so to do, order a written copy of the transcript of record in said case to be forwarded by the clerk of court to the chairman of the said Commission with a recommenda-tion that the licensee’s certifi cate of license be revoked. 93A-8. Penalty for violation of Chapter. Any person violating the provisions of this Chapter shall upon conviction thereof be deemed guilty of a Class 1 mis-demeanor. 93A-9. Licensing nonresidents. (a) An applicant from another state, which off ers licens-ing privileges to residents of North Carolina, may be licensed by conforming to all the provisions of this Chapter and, in the discretion of the Commission, such other terms and conditions as are required of North Carolina residents applying for license in such other state; provided that the Commission may exempt from the examination prescribed in G.S. 93A-4 a broker or salesperson duly licensed in another state if a similar exemption is extended to licensed brokers from North Carolina. A license applicant who has been a resident of North Carolina for not more than 90 days may be considered by the Commission as a nonresident for the purposes of this subsection. (b) Th e Commission may issue a limited broker’s license to a person or an entity from another state or territory of the United States without regard to whether that state or territory off ers similar licensing privileges to residents in North Carolina if the person or entity satisfi es all of the following: (1) Is of good moral character and licensed as a real es-tate broker or salesperson in good standing in an-other state or territory of the United States. (2) Only engages in business as a real estate broker in North Carolina in transactions involving com-mercial real estate and while the person or enti-ty is affi liated with a resident North Carolina real estate broker. (3) Complies with the laws of this State regulating real estate brokers and rules adopted by the Commis-sion. Th e Commission may require an applicant for licen-sure under this subsection to pay a fee not to exceed three hundred dollars ($300.00). All licenses issued under this subsection shall expire on June 30 of each year following issuance or on a date that the Commis-sion deems appropriate unless the license is renewed pursuant to the requirements of G.S. 93A-4. A person or entity licensed under this subsection may be disci-plined by the Commission for violations of this Chap-ter as provided in G.S. 93A-6 and G.S. 93A-54. 10 North Carolina Real Estate License Law and Commission Rules Any person or entity licensed under this subsection shall be affi liated with a resident North Carolina real estate broker, and the resident North Carolina real es-tate broker shall actively and personally supervise the licensee in a manner that reasonably assures that the li-censee complies with the requirements of this Chap-ter and rules adopted by the Commission. A person or entity licensed under this subsection shall not, howev-er, be affi liated with a resident North Carolina real es-tate provisional broker. Th e Commission may exempt applicants for licensure under this subsection from ex-amination and the other licensing requirements under G.S. 93A-4. Th e Commission may adopt rules as it deems necessary to give eff ect to this subsection, in-cluding rules establishing: (i) qualifi cations for licen-sure; (ii) licensure and renewal procedures; (iii) re-quirements for continuing education; (iv) conduct of persons and entities licensed under this subsection and their affi liated resident real estate brokers; (v) a defi - nition of commercial real estate; and (vi) any require-ments or limitations on affi liation between resident real estate brokers and persons or entities seeking licen-sure under this subsection. 93A-10. Nonresident licensees; fi ling of consent as to service of process and pleadings. Every nonresident applicant shall fi le an irrevocable consent that suits and actions may be commenced against such ap-plicant in any of the courts of record of this State, by the service of any process or pleading authorized by the laws of this State in any county in which the plaintiff may reside, by serving the same on the Executive Director of the Com-mission, said consent stipulating and agreeing that such ser-vice of such process or pleadings on said Executive Director shall be taken and held in all courts to be valid and binding as if due service had been made personally upon the appli-cant in this State. Th is consent shall be duly acknowledged, and, if made by a corporation, shall be executed by an of-fi cer of the corporation. Th e signature of the offi cer on the consent to service instrument shall be suffi cient to bind the corporation and no further authentication is necessary. An application from a corporation or other business entity shall be signed by an offi cer of the corporation or entity or by an individual designated by the Commission. In all cases where process or pleadings shall be served, un-der the provisions of this Chapter, upon the Executive Di-rector of the Commission, such process or pleadings shall be served in duplicate, one of which shall be fi led in the of-fi ce of the Commission and the other shall be forwarded immediately by the Executive Director of the Commission, by registered mail, to the last known business address of the nonresident licensee against which such process or plead-ings are directed. 93A-11. Reimbursement by real estate independent contractor of brokers’ workers’ compensation. (a) Notwithstanding the provisions of G.S. 97-21 or any other provision of law, a real estate broker may include in the governing contract with a real estate salesper-son whose nonemployee status is recognized pursuant to section 3508 of the United States Internal Revenue Code, 26 U.S.C. § 3508, an agreement for the sales-person to reimburse the broker for the cost of covering that salesperson under the broker’s workers’ compensa-tion coverage of the broker’s business. (b) Nothing in this section shall aff ect a requirement under any other law to provide workers’ compensation cover-age or in any manner exclude from coverage any person, fi rm, or corporation otherwise subject to the provisions of Article 1 of Chapter 97 of the General Statutes. 93A-12. Disputed monies. (a) A real estate broker licensed under this Chapter may deposit with the clerk of court in accordance with this section monies, other than a residential security depos-it, the ownership of which are in dispute and that the real estate broker received while acting in a fi duciary capacity. (b) Th e disputed monies shall be deposited with the clerk of court in the county in which the property for which the disputed monies are being held is located. At the time of depositing the disputed monies, the real es-tate broker shall certify to the clerk of court that the persons who are claiming ownership of the disputed monies have been notifi ed in accordance with subsec-tion (c) of this section that the disputed monies are to be deposited with the clerk of court and that the per-sons may initiate a special proceeding with the clerk of court to recover the disputed monies. (c) Notice to the persons who are claiming ownership to the disputed monies required under subsection (b) of this section shall be provided by delivering a copy of the notice to the person or by mailing it to the person by fi rst-class mail, postpaid, properly addressed to the person at the person’s last known address. (d) A real estate broker shall not deposit disputed monies with the clerk of court until 90 days following notifi ca-tion of the persons claiming ownership of the disput-ed monies. (e) Upon the fi ling of a special proceeding to recover the disputed monies, the clerk shall determine the right-ful ownership of the monies and distribute the disput-ed monies accordingly. If no special proceeding is fi led with the clerk of court within one year of the disputed monies being deposited with the clerk of court, the dis-puted monies shall be deemed unclaimed and shall be delivered by the clerk of court to the State Treasurer in accordance with the provisions of Article 4 of Chapter 116B of the General Statutes. North Carolina Real Estate License Law and Commission Rules 11 Sections 93A-13 through 93A-15: Reserved for future codifi cation purposes. 93A-16. Real Estate Recovery Fund created; payment to fund; management. (a) Th ere is hereby created a special fund to be known as the “Real Estate Recovery Fund” which shall be set aside and maintained by the North Carolina Real Es-tate Commission. Said fund shall be used in the man-ner provided under this Article for the payment of un-satisfi ed judgments where the aggrieved person has suf-fered a direct monetary loss by reason of certain acts committed by any real estate salesperson licensed be-fore April 1, 2006, or by any real estate broker. (b) On September 1, 1979, the Commission shall transfer the sum of one hundred thousand dollars ($100,000) from its expense reserve fund to the Real Estate Recov-ery Fund. Th ereafter, the Commission may transfer to the Real Estate Recovery Fund additional sums of mon-ey from whatever funds the Commission may have, pro-vided that, if on December 31 of any year the amount remaining in the fund is less than fi fty thousand dollars ($50,000), the Commission may determine that each person or entity licensed under this Chapter, when re-newing his or her or its license, shall pay in addition to his or her license renewal fee, a fee not to exceed ten dollars ($10.00) per broker and fi ve dollars ($5.00) per salesperson as shall be determined by the Commission for the purpose of replenishing the fund. (c) Th e Commission shall invest and reinvest the moneys in the Real Estate Recovery Fund in the same manner as provided by law for the investment of funds by the clerk of superior court. Th e proceeds from such invest-ments shall be deposited to the credit of the fund. (d) Th e Commission shall have the authority to adopt rea-sonable rules and procedures not inconsistent with the provisions of this Article, to provide for the orderly, fair and effi cient administration and payment of monies held in the Real Estate Recovery Fund. 93A-17. Grounds for payment; notice and application to Commission. (a) An aggrieved person who has suff ered a direct monetary loss by reason of the conversion of trust funds by a real estate salesperson licensed before April 1, 2006, or by any licensed real estate broker shall be eligible to recov-er, subject to the limitations of this Article, the amount of trust funds converted and which is otherwise unre-coverable provided that: (1) Th e act or acts of conversion which form the ba-sis of the claim for recovery occurred on or after September 1, 1979; (2) Th e aggrieved person has sued the real estate bro-ker or salesperson in a court of competent juris-diction and has fi led with the Commission writ-ten notice of such lawsuit within 60 days after its commencement unless the claim against the Real Estate Recovery Fund is for an amount less than three thousand dollars ($3,000), excluding attor-neys fees, in which case the notice may be fi led within 60 days after the termination of all judicial proceedings including appeals; (3) Th e aggrieved person has obtained fi nal judgment in a court of competent jurisdiction against the real estate broker or salesperson on grounds of conversion of trust funds arising out of a transac-tion which occurred when such broker or sales-person was licensed and acting in a capacity for which a license is required; and (4) Execution of the judgment has been attempted and has been returned unsatisfi ed in whole or in part. Upon the termination of all judicial proceedings includ-ing appeals, and for a period of one year thereafter, a person eligible for recovery may fi le a verifi ed applica-tion with the Commission for payment out of the Real Estate Recovery Fund of the amount remaining unpaid upon the judgment which represents the actual and di-rect loss sustained by reason of conversion of trust funds. A copy of the judgment and return of execution shall be attached to the application and fi led with the Commis-sion. Th e applicant shall serve upon the judgment debt-or a copy of the application and shall fi le with the Com-mission an affi davit or certifi cate of such service. (b) For the purposes of this Article, the term “trust funds” shall include all earnest money deposits, down payments, sales proceeds, tenant security deposits, undisbursed rents and other such monies which belong to another or others and are held by a real estate broker or salesper-son acting in that capacity. Trust funds shall also include all time share purchase monies which are required to be held in trust by G.S. 93A-45(c) during the time they are, in fact, so held. Trust funds shall not include, however, any funds held by an independent escrow agent under G.S. 93A-42 or any funds which the court may fi nd to be subject to an implied, constructive or resulting trust. (c) For the purposes of this Article, the terms “licensee”, “broker”, and “salesperson” shall include only individu-al persons licensed under this Chapter as brokers or in-dividual persons who were licensed under this Chap-ter as salespersons prior to April 1, 2006. Th e terms “li-censee”, “broker”, and “salesperson” shall not include a time share developer, time share project, independent escrow agent, corporation or other entity licensed un-der this Chapter. 93A-18. Hearing; required showing. Upon such application by an aggrieved person, the Commis- 12 North Carolina Real Estate License Law and Commission Rules sion shall conduct a hearing and the aggrieved person shall be required to show: (1) He or she is not a spouse of the judgment debtor or a person representing such spouse; and (2) He or she is making application not more than one year after termination of all judicial proceedings, in-cluding appeals, in connection with the judgment; (3) He or she has complied with all requirements of this Article; (4) He or she has obtained a judgment as described in G.S. 93A-17, stating the amount owing thereon at the date of application; (5) He or she has made all reasonable searches and in-quiries to ascertain whether the judgment debtor is possessed of real or personal property or other assets liable to be sold or applied in satisfaction of the judgment; (6) Th at by such search he or she has discovered no real or personal property or other assets liable to be sold or applied, or that he or she has discov-ered certain of them, describing them, but that the amount so realized was insuffi cient to satisfy the judgment, stating the amount realized and the balance remaining due on the judgment after ap-plication of the amount realized; and (7) He or she has diligently pursued his or her rem-edies including attempted execution on the judg-ment against all the judgment debtors which exe-cution has been returned unsatisfi ed. In addition to that, he or she knows of no assets of the judg-ment debtor and that he or she has attempted col-lection from all other persons who may be liable to him or her in the transaction for which he or she seeks payment from the Real Estate Recovery Fund if there be any such other persons. 93A-19. Response and defense by Commis sion and judgment debtor; proof of conversion. (a) Whenever the Commission proceeds upon an applica-tion as set forth in this Article, counsel for the Com-mission may defend such action on behalf of the fund and shall have recourse to all appropriate means of de-fense, including the examination of witnesses. Th e judgment debtor may defend such action on his or her own behalf and shall have recourse to all appro-priate means of defense, including the examination of witnesses. Counsel for the Commission and the judg-ment debtor may fi le responses to the application, set-ting forth answers and defenses. Responses shall be fi led with the Commission and copies shall be served upon every party by the fi ling party. If at any time it appears there are no triable issues of fact and the ap-plication for payment from the fund is without mer-it, the Commission shall dismiss the application. A motion to dismiss may be supported by affi davit of any person or persons having knowledge of the facts and may be made on the basis that the application or the judgment referred to therein do not form a basis for meritorious recovery within the purview of G.S. 93A-17, that the applicant has not complied with the provisions of this Article, or that the liability of the fund with regard to the particular licensee or transac-tion has been exhausted; provided, however, notice of such motion shall be given at least 10 days prior to the time fi xed for hearing. If the applicant or judgment debtor fails to appear at the hearing after receiving no-tice of the hearing, the applicant or judgment debtor shall waive his or her rights unless the absence is ex-cused by the Commission. (b) Whenever the judgment obtained by an applicant is by default, stipulation, or consent, or whenever the action against the licensee was defended by a trustee in bank-ruptcy, the applicant, for purposes of this Article, shall have the burden of proving his or her cause of action for conversion of trust funds. Otherwise, the judgment shall create a rebuttable presumption of the conversion of trust funds. Th is presumption is a presumption af-fecting the burden of producing evidence. 93A-20. Order directing payment out of fund; compromise of claims. Applications for payment from the Real Estate Recovery Fund shall be heard and decided by a majority of the mem-bers of the Commission. If, after a hearing, the Commis-sion fi nds the claim should be paid from the fund, the Commission shall enter an order requiring payment from the fund of whatever sum the Commission shall fi nd to be payable upon the claim in accordance with the limitations contained in this Article. Subject to Commission approval, a claim based upon the application of an aggrieved person may be compromised; however, the Commission shall not be bound in any way by any compromise or stipulation of the judgment debtor. If a claim appears to be otherwise meritorious, the Com-mission may waive procedural defects in the application for payment. 93A-21. Limitations; pro rata distribution; attorney fees. (a) Payments from the Real Estate Recovery Fund shall be subject to the following limitations: (1) Th e right to recovery under this Article shall be for-ever barred unless application is made within one year after termination of all proceedings including appeals, in connection with the judgment; (2) Th e fund shall not be liable for more than twen-ty- fi ve thousand dollars ($25,000) per transaction regardless of the number of persons aggrieved or parcels of real estate involved in such transaction; and North Carolina Real Estate License Law and Commission Rules 13 (3) Th e liability of the fund shall not exceed in the ag-gregate twenty-fi ve thousand dollars ($25,000) for any one licensee within a single calendar year, and in no event shall it exceed in the aggregate fi fty thousand dollars ($50,000) for any one licensee. (4) Th e fund shall not be liable for payment of any judgment awards of consequential damages, mul-tiple or punitive damages, civil penalties, inciden-tal damages, special damages, interest, costs of court or action or other similar awards. (b) If the maximum liability of the fund is insuffi cient to pay in full the valid claims of all aggrieved persons whose claims relate to the same transaction or to the same li-censee, the amount for which the fund is liable shall be distributed among the claimants in a ratio that their re-spective claims bear to the total of such valid claims or in such manner as the Commission, in its discretion, deems equitable. Upon petition of counsel for the Commis-sion, the Commission may require all claimants and pro-spective claimants to be joined in one proceeding to the end that the respective rights of all such claimants to the Real Estate Recovery Fund may be equitably resolved. A person who fi les an application for payment after the maximum liability of the fund for the licensee or transac-tion has been exhausted shall not be entitled to payment and may not seek judicial review of the Commission’s award of payment to any party except upon a showing that the Commission abused its discretion. (c) In the event an aggrieved person is entitled to payment from the fund in an amount of one thousand fi ve hun-dred dollars ($1,500) or less, the Commission may allow such person to recover from the fund reasonable attor-ney’s fees incurred in eff ecting such recovery. Reimburse-ment for attorney’s fees shall be limited to those fees in-curred in eff ecting recovery from the fund and shall not include any fee incurred in obtaining judgment against the licensee. 93A-22. Repayment to fund; automatic sus pension of license. Should the Commission pay from the Real Estate Recovery Fund any amount in settlement of a claim or toward satisfac-tion of a judgment against a licensed real estate broker or sales-person, any license issued to the broker or salesperson shall be automatically suspended upon the eff ective date of the order authorizing payment from the fund. No such broker or sales-person shall be granted a reinstatement until the fund has been repaid in full, including interest at the legal rate as provided for in G.S. 24-1. 93A-23. Subrogation of rights. When the Commission has paid from the Real Estate Re-covery Fund any sum to the judgment creditor, the Com-mission shall be subrogated to all of the rights of the judg-ment creditor to the extent of the amount so paid and the judgment creditor shall assign all his or her right, title, and interest in the judgment to the extent of the amount so paid to the Commission and any amount and interest so recov-ered by the Commission on the judgment shall be deposited in the Real Estate Recovery Fund. 93A-24. Waiver of rights. Th e failure of an aggrieved person to comply with this Arti-cle shall constitute a waiver of any rights hereunder. 93A-25. Persons ineligible to recover from fund. No real estate broker or real estate salesperson who suff ers the loss of any commission from any transaction in which he or she was acting in the capacity of a real estate broker or real estate salesperson shall be entitled to make application for payment from the Real Estate Recovery Fund for such loss. 93A-26. Disciplinary action against licensee. Nothing contained in this Article shall limit the authority of the Commission to take disciplinary action against any li-censee under this Chapter, nor shall the repayment in full of all obligations to the fund by any licensee nullify or modify the eff ect of any other disciplinary proceeding brought un-der this Chapter. Sections 93A-27 through 93A-31: Reserved for future codifi cation purposes. 93A-39. Title. Th is Article shall be known and may be cited as the “North Carolina Time Share Act.” 93A-40. Regis tration required of time share projects; real es tate license required. (a) It shall be unlawful for any person in this State to en-gage or assume to engage in the business of a time share salesperson without fi rst obtaining a real estate broker license issued by the North Carolina Real Estate Com-mission under the provisions of Article I of this Chap-ter, and it shall be unlawful for a time share developer to sell or off er to sell a time share located in this State without fi rst obtaining a certifi cate of registration for the time share project to be off ered for sale issued by the North Carolina Real Estate Commission under the provisions of this Article. 14 North Carolina Real Estate License Law and Commission Rules (b) A person responsible as general partner, corporate of-fi cer, joint venturer or sole proprietor who intentional-ly acts as a time share developer, allowing the off ering of sale or the sale of time shares to a purchaser, without fi rst obtaining registration of the time share project un-der this Article shall be guilty of a Class I felony. 93A-41. Defi nitions. When used in this Article, unless the context otherwise re-quires, the term: (1) “Commission” means the North Carolina Real Es-tate Commission; (2) “Developer” means any person or entity which cre-ates a time share or a time share project or pro-gram, purchases a time share for purpose of re-sale, or is engaged in the business of selling its own time shares and shall include any person or entity who controls, is controlled by, or is in com-mon control with the developer which is engaged in creating or selling time shares for the develop-er, but a person who purchases a time share for his or her occupancy, use, and enjoyment shall not be deemed a developer; (3) “Enrolled” means paid membership in exchange programs or membership in an exchange program evidenced by written acceptance or confi rmation of membership; (4) “Exchange company” means any person operat-ing an exchange program; (5) “Exchange program” means any opportunity or procedure for the assignment or exchange of time shares among purchasers in the same or other time share project; (5a) “Independent escrow agent” means a licensed at-torney located in this State or a fi nancial institu-tion located in this State; (6) “Managing agent” means a person who under-takes the duties, responsibilities, and obligations of the management of a time share program; (7) Person” means one or more natural persons, cor-porations, partnerships, associations, trusts, oth-er entities, or any combination thereof; (7a) “Project broker” means a natural person licensed as a real estate broker and designated by the de-veloper to supervise brokers at the time share project; (8) “Purchaser” means any person other than a de-veloper or lender who owns or acquires an inter-est or proposes to acquire an interest in a time share; (9) “Time share” means a right to occupy a unit or any of several units during fi ve or more separated time periods over a period of at least fi ve years, includ-ing renewal options, whether or not coupled with a freehold estate or an estate for years in a time share project or a specifi ed portion thereof, includ-ing, but not limited to, a vacation license, prepaid hotel reservation, club membership, limited part-nership, vacation bond, or a plan or system where the right to use is awarded or apportioned on the basis of points, vouchers, split, divided, or fl oating use; (9a) “Time share instrument” means an instrument transferring a time share or any interest, legal or benefi cial, in a time share to a purchaser, including a contract, installment contract, lease, deed, or oth-er instrument; (10) “Time share program” means any arrangement for time shares whereby real property has been made subject to a time share; (11) “Time share project” means any real property that is subject to a time share program; (11a)“Time share registrar” means a natural person who is designated by the developer to record or cause time share instruments and lien releases to be re-corded and to fulfi ll the other duties imposed by this Article; (12) “Time share salesperson” means a person who sells or off ers to sell on behalf of a developer a time share to a purchaser; and (13) “Time share unit” or “unit” means the real property or real property improvement in a project which is divided into time shares and designated for separate occupancy and use. 93A-42. Time shares deemed real estate. (a) A time share is deemed to be an interest in real estate, and shall be governed by the law of this State relating to real estate. (b) A purchaser of a time share may in accordance with G.S. 47-18 register the time share instrument by which he or she acquired his or her interest and upon such reg-istration shall be entitled to the protection provided by Chapter 47 of the General Statutes for the recordation of other real property instruments. A time share in-strument transferring or encumbering a time share shall not be rejected for recordation because of the nature or duration of that estate, provided all other requirements necessary to make an instrument recordable are com-plied with. (c) Th e developer shall record or cause to be recorded a time share instrument: (1) Not less than six days nor more than 45 days follow-ing the execution of the contract of sale by the pur-chaser; or (2) Not later than 180 days following the execution of the contract of sale by the purchaser, provided that all payments made by the purchaser shall be placed by the developer with an independent es-crow agent upon the expiration of the 10-day es-crow period provided by G.S. 93A-45(c). North Carolina Real Estate License Law and Commission Rules 15 (d) Th e independent escrow agent provided by G.S. 93A-42(c)(2) shall deposit and maintain the purchaser’s payments in an insured trust or escrow account in a bank or savings and loan association located in this State. Th e trust or escrow account may be interest-bearing and the interest earned shall belong to the developer, if agreed upon in writing by the purchaser; provided, however, if the time share instrument is not recorded within the time periods specifi ed in this section, then the interest earned shall belong to the purchaser. Th e independent escrow agent shall return all payments to the purchas-er at the expiration of 180 days following the execution of the contract of sale by the purchaser, unless prior to that time the time share instrument has been recorded. However, if prior to the expiration of 180 days follow-ing the execution of the contract of sale, the developer and the purchaser provide their written consent to the independent escrow agent, the developer’s obligation to record the time share instrument and the escrow period may be extended for an additional period of 120 days. Upon recordation of the time share instrument, the in-dependent escrow agent shall pay the purchaser’s funds to the developer. Upon request by the Commission, the independent escrow agent shall promptly make avail-able to the Commission inspection of records of money held by him or her. (e) In no event shall the developer be required to record a time share instrument if the purchaser is in default of his or her obligations. (f ) Recordation under the provisions of this section of the time share instrument shall constitute delivery of that instrument from the developer to the purchaser. 93A-43. Partition. When a time share is owned by two or more persons as ten-ants in common or as joint tenants either may seek a parti-tion by sale of that interest but no purchaser of a time share may maintain an action for partition by sale or in kind of the unit in which such time share is held. 93A-44. Public off ering statement. Each developer shall fully and conspicuously disclose in a public off ering statement: (1) Th e total fi nancial obligation of the purchaser, which shall include the initial purchase price and any addi-tional charges to which the purchaser may be subject; (2) Any person who has or may have the right to alter, amend or add to charges to which the purchaser may be subject and the terms and conditions un-der which such charges may be imposed; (3) Th e nature and duration of each agreement be-tween the developer and the person managing the time share program or its facilities; (4) Th e date of availability of each amenity and facil-ity of the time share program when they are not completed at the time of sale of a time share; (5) Th e specifi c term of the time share; (6) Th e purchaser’s right to cancel within fi ve days of execution of the contract and how that right may be exercised under G.S. 93A-45; (7) A statement that under North Carolina law an in-strument conveying a time share must be record-ed in the Register of Deeds Offi ce to protect that interest; and (8) Any other information which the Commission may by rule require. Th e public off ering statement shall also contain a one page cover containing a summary of the text of the statement. 93A-45. Purchaser’s right to cancel; escrow; violation. (a) A developer shall, before transfer of a time share and no later than the date of any contract of sale, provide a prospective purchaser with a copy of a public off ering statement containing the information required by G.S. 93A-44. Th e contract of sale is voidable by the pur-chaser for fi ve days after the execution of the contract. Th e contract shall conspicuously disclose the purchas-er’s right to cancel under this subsection and how that right may be exercised. Th e purchaser may not waive this right of cancellation. Any oral or written declara-tion or instrument that purports to waive this right of cancellation is void. (b) A purchaser may elect to cancel within the time period set out in subsection (a) by hand delivering or by mail-ing notice to the developer or the time share salesper-son. Cancellation under this section is without penalty and upon receipt of the notice all payments made prior to cancellation must be refunded immediately. (c) Any payments received by a time share developer or time share salesperson in connection with the sale of the time share shall be immediately deposited by such developer or salesperson in a trust or escrow account in an insured bank or savings and loan association in North Carolina and shall remain in such account for 10 days or cancella-tion by the purchaser, whichever occurs fi rst. Payments held in such trust or escrow accounts shall be deemed to belong to the purchaser and not the developer. In lieu of such escrow requirements, the Commission shall have the authority to accept, in its discretion, alternative fi nancial assurances adequate to protect the purchaser’s interest during the contract cancellation period, includ-ing but not limited to a surety bond, corporate bond, cash deposit or irrevocable letter of credit in an amount equal to the escrow requirements. (d) If a developer fails to provide a purchaser to whom a time share is transferred with the statement as required by subsection (a), the purchaser, in addition to any rights to damages or other relief, is entitled to receive from the developer an amount equal to ten percent (10%) of the sales price of the time share not to exceed three thousand 16 North Carolina Real Estate License Law and Commission Rules dollars ($3,000). A receipt signed by the purchaser stat-ing that he or she has received the statement required by subsection (a) is prima facie evidence of delivery of such statement. 93A-46. Prizes. An advertisement of a time share which includes the off er of a prize or other inducement shall fully comply with the provi-sions of Chapter 75 of the General Statutes. 93A-47. Time shares proxies. No proxy, power of attorney or similar device given by the pur-chaser of a time share regarding the management of the time share program or its facilities shall exceed one year in duration, but the same may be renewed from year to year. 93A-48. Exchange programs. (a) If a purchaser is off ered the opportunity to subscribe to any exchange program, the developer shall, except as provided in subsection (b), deliver to the purchaser, prior to the ex-ecution of (i) any contract between the purchaser and the exchange company, and (ii) the sales contract, at least the following information regarding such exchange program: (1) Th e name and address of the exchange company; (2) Th e names of all offi cers, directors, and shareholders owning fi ve percent (5%) or more of the outstand-ing stock of the exchange company; (3) Whether the exchange company or any of its offi - cers or directors has any legal or benefi cial interest in any developer or managing agent for any time share project participating in the exchange program and, if so, the name and location of the time share proj-ect and the nature of the interest; (4) Unless the exchange company is also the developer a statement that the purchaser’s contract with the ex-change company is a contract separate and distinct from the sales contract; (5) Whether the purchaser’s participation in the ex-change program is dependent upon the contin-ued affi liation of the time share project with the ex-change program; (6) Whether the purchaser’s membership or participa-tion, or both, in the exchange program is voluntary or mandatory; (7) A complete and accurate description of the terms and conditions of the purchaser’s contractual rela-tionship with the exchange company and the pro-cedure by which changes thereto may be made; (8) A complete and accurate description of the proce-dure to qualify for and eff ectuate exchanges; (9) A complete and accurate description of all limita-tions, restrictions, or priorities employed in the op-eration of the exchange program, including, but not limited to, limitations on exchanges based on sea-sonality, unit size, or levels of occupancy, expressed in boldfaced type, and, in the event that such limi-tations, restrictions, or priorities are not uniformly applied by the exchange program, a clear descrip-tion of the manner in which they are applied; (10) Whether exchanges are arranged on a space avail-able basis and whether any guarantees of fulfi ll-ment of specifi c requests for exchanges are made by the exchange program; (11) Whether and under what circumstances an owner, in dealing with the exchange company, may lose the use and occupancy of his or her time share in any properly applied for exchange without his or her being provided with substitute accommoda-tions by the exchange company; (12) Th e expenses, fees or range of fees for participa-tion by owners in the exchange program, a state-ment whether any such fees may be altered by the exchange company, and the circumstances under which alterations may be made; (13) Th e name and address of the site of each time share project or other property which is partici-pating in the exchange program; (14) Th e number of units in each project or other prop-erty participating in the exchange program which are available for occupancy and which qualify for participation in the exchange program, expressed within the following numerical groupings, 1-5, 6-10, 11-20, 21-50 and 51, and over; (15) Th e number of owners with respect to each time share project or other property which are eligible to participate in the exchange program expressed within the following numerical groupings, 1-100, 101-249, 250-499, 500-999, and 1,000 and over, and a statement of the criteria used to determine those owners who are currently eligible to partici-pate in the exchange program; (16) Th e disposition made by the exchange company of time shares deposited with the exchange pro-gram by owners eligible to participate in the ex-change program and not used by the exchange company in eff ecting exchanges; (17) Th e following information which, except as pro-vided in subsection (b) below, shall be indepen-dently audited by a certifi ed public accountant in accordance with the standards of the Accounting Standards Board of the American Institute of Cer-tifi ed Public Accountants and reported for each year no later than July 1, of the succeeding year: a. Th e number of owners enrolled in the exchange program and such numbers shall disclose the relationship between the exchange company and owners as being either fee paying or gra-tuitous in nature; b. Th e number of time share projects or other properties eligible to participate in the ex- North Carolina Real Estate License Law and Commission Rules 17 change program categorized by those having a contractual relationship between the de-veloper or the association and the exchange company and those having solely a contrac-tual relationship between the exchange com-pany and owners directly; c. Th e percentage of confi rmed exchanges, which shall be the number of exchanges confi rmed by the exchange company divided by the number of exchanges properly applied for, together with a complete and accurate state-ment of the criteria used to determine wheth-er an exchange requested was properly ap-plied for; d. Th e number of time shares or other intervals for which the exchange company has an out-standing obligation to provide an exchange to an owner who relinquished a time share or interval during the year in exchange for a time share or interval in any future year; and e. Th e number of exchanges confi rmed by the exchange company during the year; and (18) A statement in boldfaced type to the eff ect that the percentage described in subparagraph (17)c. of subsection (a) is a summary of the exchange re-quests entered with the exchange company in the period reported and that the percentage does not indicate a purchaser’s/owner’s probabilities of be-ing confi rmed to any specifi c choice or range of choices, since availability at individual locations may vary. Th e purchaser shall certify in writing to the receipt of the information required by this subsection and any other information which the Commissioners may by rule require. (b) Th e information required by subdivisions (a), (2), (3), (13), (14), (15), and (17) shall be accurate as of De-cember 31 of the year preceding the year in which the information is delivered, except for information de-livered within the fi rst 180 days of any calendar year which shall be accurate as of December 31 of the year two years preceding the year in which the informa-tion is delivered to the purchaser. Th e remaining in-formation required by subsection (a) shall be accu-rate as of a date which is no more than 30 days prior to the date on which the information is delivered to the purchaser. (c) In the event an exchange company off ers an exchange program directly to the purchaser or owner, the ex-change company shall deliver to each purchaser or owner, concurrently with the off ering and prior to the execution of any contract between the purchas-er or owner and the exchange company the informa-tion set forth in subsection (a) above. Th e require-ments of this paragraph shall not apply to any renew-al of a contract between an owner and an exchange company. (d) All promotional brochures, pamphlets, advertisements, or other materials disseminated by the exchange com-pany to purchasers in this State which contain the per-centage of confi rmed exchanges described in (a)(17)c. must include the statement set forth in (a)(18). 93A-49. Service of process on exchange company. Any exchange company off ering an exchange program to a purchaser shall be deemed to have made an irrevocable appointment of the Commission to receive service of law-ful process in any proceeding against the exchange company arising under this Article. 93A-50. Securities laws apply. Th e North Carolina Securities Act, Chapter 78A, shall also apply, in addition to the laws relating to real estate, to time shares deemed to be investment contracts or to other secu-rities off ered with or incident to a time share; provided, in the event of such applicability of the North Carolina Se-curities Act, any off er or sale of time shares registered un-der this Article shall not be subject to the provisions of G.S. 78A-24 and any real estate broker registered under Article 1 of this Chapter shall not be subject to the provisions of G.S. 78A-36. 93A-51. Rule-making authority. Th e Commission shall have the authority to adopt rules and regulations that are not inconsistent with the provisions of this Article and the General Statutes of North Carolina. Th e Commission may prescribe forms and procedures for submitting information to the Commission. 93A-52. Application for registration of time share project; denial of registration; renewal; reinstate ment; and termination of developer’s interest. (a) Prior to the off ering in this State of any time share located in this State, the developer of the time share project shall make written application to the Commission for the registration of the project. Th e application shall be ac-companied by a fee in an amount fi xed by the Commis-sion but not to exceed one thousand fi ve hundred dol-lars ($1,500), and shall include a description of the proj-ect, copies of proposed time share instruments including public off ering statements, sale contracts, deeds, and oth-er documents referred to therein, information pertaining to any marketing or managing entity to be employed by the developer for the sale of time shares in a time share project or the management of the project, information regarding any exchange program available to the pur-chaser, an irrevocable appointment of the Commission to receive service of any lawful process in any proceeding against the developer or the developer’s time share sales- 18 North Carolina Real Estate License Law and Commission Rules persons arising under this Article, and such other infor-mation as the Commission may by rule require. Upon receipt of a properly completed application and fee and upon a determination by the Commission that the sale and management of the time shares in the time share project will be directed and conducted by persons of good moral character, the Commission shall issue to the developer a certifi cate of registration authorizing the developer to off er time shares in the project for sale. Th e Commission shall within 15 days after receipt of an in-complete application, notify the developer by mail that the Commission has found specifi ed defi ciencies, and shall, within 45 days after the receipt of a properly com-pleted application, either issue the certifi cate of registra-tion or notify the developer by mail of any specifi c ob-jections to the registration of the project. Th e certifi cate shall be prominently displayed in the offi ce of the devel-oper on the site of the project. Th e developer shall promptly report to the Commission any and all changes in the information required to be submitted for the purpose of the registration. Th e de-veloper shall also immediately furnish the Commission complete information regarding any change in its inter-est in a registered time share project. In the event a de-veloper disposes of, or otherwise terminates its interest in a time share project, the developer shall certify to the Commission in writing that its interest in the time share project is terminated and shall return to the Commission for cancellation the certifi cate of registration. (b) In the event the Commission fi nds that there is substantial reason to deny the application for registration as a time share project, the Commission shall notify the applicant that such application has been denied and shall aff ord the applicant an opportunity for a hearing before the Com-mission to show cause why the application should not be denied. In all proceedings to deny a certifi cate of regis-tration, the provisions of Chapter 150B of the General Statutes shall be applicable. (c) Th e acceptance by the Commission of an application for registration shall not constitute the approval of its con-tents or waive the authority of the Commission to take disciplinary action as provided by this Article. (d) All certifi cates of registration granted and issued by the Commission under the provisions of this Article shall ex-pire on the 30th day of June following issuance thereof, and shall become invalid after such date unless reinstat-ed. Renewal of such certifi cate may be eff ected at any time during the month of June preceding the date of ex-piration of such registration upon proper application to the Commission and by the payment of a renewal fee fi xed by the Commission but not to exceed one thou-sand fi ve hundred dollars ($1,500) for each time share project. Th e developer shall, when making application for renewal, also provide a copy of the report required in G.S. 93A-48. Each certifi cate reinstated after the expi-ration date thereof shall be subject to a fee of fi fty dollars ($50.00) in addition to the required renewal fee. In the event a time share developer fails to reinstate the regis-tration within 12 months after the expiration date there-of, the Commission may, in its discretion, consider the time share project as not having been previously regis-tered, and thereby subject to the provisions of this Article relating to the issuance of an original certifi cate. Dupli-cate certifi cates may be issued by the Commission upon payment of a fee of one dollar ($1.00) by the registrant developer. Except as prescribed by Commission rules, all fees paid pursuant to this Article shall be nonrefundable. 93A-53. Register of applicants; roster of registrants; registered projects; fi nancial report to Secretary of State. (a) Th e Executive Director of the Commission shall keep a register of all applicants for certifi cates of registration, showing for each the date of application, name, busi-ness address, and whether the certifi cate was granted or refused. (b) Th e Executive Director of the Commission shall also keep a current roster showing the name and address of all time share projects registered with the Commission. Th e roster shall be kept on fi le in the offi ce of the Com-mission and be open to public inspection. (c) On or before the fi rst day of September of each year, the Commission shall fi le with the Secretary of State a copy of the roster of time share projects registered with the Commission and a report containing a complete state-ment of income received by the Commission in con-nection with the registration of time share projects for the preceding fi scal year ending June 30th attested by the affi davit of the Executive Director of the Commis-sion. Th e report shall be made a part of those annual reports required under the provisions of G.S. 93A- 5. 93A-54. Disciplinary action by Com mission. (a) Th e Commission shall have power to take disciplinary action. Upon its own motion, or on the verifi ed com-plaint of any person, the Commission may investigate the actions of any time share salesperson, developer, or project broker of a time share project registered under this Article, or any other person or entity who shall as-sume to act in such capacity. If the Commission fi nds probable cause that a time share salesperson, develop-er, or project broker has violated any of the provisions of this Article, the Commission may hold a hearing on the allegations of misconduct. Th e Commission shall have the power to suspend or revoke at any time a real estate license issued to a time share salesperson or project broker, or a certifi cate of registration of a time share project issued to a develop-er; or to reprimand or censure such salesperson, devel-oper, or project broker; or to fi ne such developer in the North Carolina Real Estate License Law and Commission Rules 19 amount of fi ve hundred dollars ($500.00) for each vi-olation of this Article, if, after a hearing, the Commis-sion adjudges either the salesperson, developer, or proj-ect broker to be guilty of: (1) Making any willful or negligent misrepresentation or any willful or negligent omission of material fact about any time share or time share project; (2) Making any false promises of a character likely to infl uence, persuade, or induce; (3) Pursuing a course of misrepresentation or making of false promises through agents, salespersons, ad-vertising or otherwise; (4) Failing, within a reasonable time, to account for all money received from others in a time share transaction, and failing to remit such monies as may be required in G.S. 93A- 45 of this Article; (5) Acting as a time share salesperson or time share developer in a manner as to endanger the inter-est of the public; (6) Paying a commission, salary, or other valuable consideration to any person for acts or services performed in violation of this Article; (7) Any other conduct which constitutes improper, fraudulent, or dishonest dealing; (8) Performing or undertaking to perform any legal service as set forth in G.S. 84-2.1, or any other acts not specifi cally set forth in that section; (9) Failing to deposit and maintain in a trust or es-crow account in an insured bank or savings and loan association in North Carolina all money re-ceived from others in a time share transaction as may be required in G.S. 93A-45 of this Article or failing to place with an independent escrow agent the funds of a time share purchaser when required by G.S. 93A-42(c); (10) Failing to deliver to a purchaser a public off ering statement containing the information required by G.S. 93A-44 and any other disclosures that the Commission may by regulation require; (11) Failing to comply with the provisions of Chapter 75 of the General Statutes in the advertising or promotion of time shares for sale, or failing to as-sure such compliance by persons engaged on be-half of a developer; (12) Failing to comply with the provisions of G.S. 93A-48 in furnishing complete and accurate in-formation to purchasers concerning any exchange program which may be off ered to such purchaser; (13) Making any false or fraudulent representation on an application for registration; (14) Violating any rule or regulation promulgated by the Commission; (15) Failing to record or cause to be recorded a time share instrument as required by G.S. 93A-42(c), or failing to provide a purchaser the protection against liens required by G.S. 93A-57(a); or (16) Failing as a time share project broker to exercise reasonable and adequate supervision of the con-duct of sales at his or her project or location by the brokers and salespersons under his or her control. (a1) Th e clear proceeds of fi nes collected pursuant to sub-section (a) of this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. (b) Following a hearing, the Commission shall also have power to suspend or revoke any certifi cate of registra-tion issued under the provisions of this Article or to reprimand or censure any developer when the regis-trant has been convicted or has entered a plea of guilty or no contest upon which fi nal judgment is entered by a court of competent jurisdiction in this State, or any other state, of the criminal off enses of: embezzlement, obtaining money under false pretense, fraud, forgery, conspiracy to defraud, or any other off ense involving moral turpitude which would reasonably aff ect the de-veloper’s performance in the time share business. (c) Th e Commission may appear in its own name in supe-rior court in actions for injunctive relief to prevent any person or entity from violating the provisions of this Article or rules promulgated by the Commission. Th e superior court shall have the power to grant these in-junctions even if criminal prosecution has been or may be instituted as a result of the violations, or regardless of whether the person or entity has been registered by the Commission. (d) Each developer shall maintain or cause to be main-tained complete records of every time share transac-tion including records pertaining to the deposit, main-tenance, and withdrawal of money required to be held in a trust or escrow account, or as otherwise required by the Commission, under G.S. 93A-45 of this Article. Th e Commission may inspect these records periodical-ly without prior notice and may also inspect these re-cords whenever the Commission determines that they are pertinent to an investigation of any specifi c com-plaint against a registrant. (e) When a licensee is accused of any act, omission, or mis-conduct under this Article which would subject the li-censee to disciplinary action, the licensee may, with the consent and approval of the Commission, surrender his or her or its license and all the rights and privileg-es pertaining to it for a period of time to be established by the Commission. A licensee who surrenders his or her or its license shall not be eligible for, or submit any application for, licensure as a real estate broker or reg-istration of a time share project during the period of li-cense surrender. For the purposes of this section, the term licensee shall include a time share developer. 20 North Carolina Real Estate License Law and Commission Rules 93A-55. Private enforcement. Th e provisions of the Article shall not be construed to limit in any manner the right of a purchaser or other person in-jured by a violation of this Article to bring a private action. 93A-56. Penalty for violation of Article. Except as provided in G.S. 93A-40(b) and G.S. 93A-58, any person violating the provisions of this Article shall be guilty of a Class 1 misdemeanor. 93A-57. Release of liens. (a) Prior to any recordation of the instrument transferring a time share, the developer shall record and furnish notice to the purchaser of a release or subordination of all liens aff ecting that time share, or shall provide a surety bond or insurance against the lien from a company acceptable to the Commission as provided for liens on real estate in this State, or such underlying lien document shall contain a provision wherein the lienholder subordinates its rights to that of a time share purchaser who fully complies with all of the provisions and terms of the contract of sale. (b) Unless a time share owner or a time share owner who is his or her predecessor in title agree otherwise with the lienor, if a lien other than a mortgage or deed of trust becomes eff ective against more than one time share in a time share project, any time share owner is entitled to a release of his or her time share from a lien upon payment of the amount of the lien attributable to his or her time share. Th e amount of the payment must be proportionate to the ratio that the time share owner’s liability bears to the liabilities of all time share owners whose interests are subject to the lien. Upon receipt of payment, the lien holder shall promptly deliver to the time share owner a release of the lien covering that time share. After payment, the managing agent may not assess or have a lien against that time share for any portion of the ex-penses incurred in connection with that lien. 93A-58. Registrar required; criminal penal ties; project broker. (a) Every developer of a registered project shall, by affi da-vit fi led with the Commission, designate a natural per-son to serve as time share registrar for its registered proj-ects. Th e registrar shall be responsible for the recorda-tion of time share instruments and the release of liens re-quired by G.S. 93A-42(c) and G.S. 93A-57(a). A devel-oper may, from time to time, change the designated time share registrar by proper fi ling with the Commission and by otherwise complying with this subsection. No sales or off ers to sell shall be made until the registrar is designated for a time share project. Th e registrar has the duty to ensure that the provisions of this Article are complied with in a time share project for which he or she is registrar. No registrar shall record a time share instrument except as provided by this Article. (b) A time share registrar shall be guilty of a Class I felony if he or she knowingly or recklessly fails to record or cause to be recorded a time share instrument as required by this Article. A person responsible as general partner, corporate offi - cer, joint venturer or sole proprietor of the developer of a time share project shall be guilty of a Class I felony if he or she intentionally allows the off ering for sale or the sale of time share to purchasers without fi rst designating a time share registrar. (c) Th e developer shall designate for each project and other lo-cations where time shares are sold or off ered for sale a proj-ect broker. Th e project broker shall act as supervising bro-ker for all time share salespersons at the project or other lo-cation and shall directly, personally, and actively supervise all such persons at the project or other location in a manner to reasonably ensure that the sale of time shares will be con-ducted in accordance with the provisions of this Chapter. 93A-59. Preservation of time share pur chas er’s claims and defenses. (a) For one year following the execution of an instrument of indebtedness for the purchase of a time share, the purchaser of a time share may assert against the sell-er, assignee of the seller, or other holder of the instru-ment of indebtedness, any claims or defenses avail-able against the developer or the original seller, and the purchaser may not waive the right to assert these claims or defenses in connection with a time share pur-chase. Any recovery by the purchaser on a claim as-serted against an assignee of the seller or other holder of the instrument of indebtedness shall not exceed the amount paid by the purchaser under the instrument. A holder shall be the person or entity with the rights of a holder as set forth in G.S. 25-3-301. (b) Every instrument of indebtedness for the purchase of a time share shall set forth the following provision in a clear and conspicuous manner: Sections 93A-60 through 93A-69: Reserved for future codifi cation purposes. |
OCLC number | 807760566 |
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