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.