Anyone that lives in the Triangle of North Carolina knows that real estate is a hot commodity and for good reason, this is a great place in which to live. Perhaps we should start keeping it a secret, so we maintain our small big city charm but that’s a different blog for a different day. Today we will be discussing the professional license of North Carolina real estate professionals.
With a lot of real estate sales comes a lot of real estate brokers, agents of those brokers and salespersons. This is where the North Carolina Real Estate Commission comes in. The Commission derives its legal authority through Chapter 93A of the North Carolina General Statutes. Ch. 93A sets forth the license that is required of real estate brokers, creates and organizes the real estate commission (93A-3). Ch. 93A also establishes what disciplinary action may be taken by the commission against an agent or broker. Conduct that is subject to disciplinary action is found in (93A-6(a)). The list is extensive so I will only be discussing the most common reasons licensed realtors are disciplined below.
Be sure to manage your trust account properly. Believe me, I know it’s a lot to keep up with but it’s imperative that the trust account be properly reconciled every month. Also, make sure you maintain a trust account journal monthly and keep a ledger for all sale transactions or leases. The responsibility for the trust account ultimately falls on the broker-in-charge. It’s his or her job to supervise anyone doing the bookkeeping for the trust account. Hire someone you trust. If you need someone, contact me and I will provide a referral.
Anyone who has sold or purchased a home is familiar with what is called a ‘disclosure statement’. It’s a section or attachment to your offer to purchase and contract that lets the buyer know certain conditions of the property inside and out. An example is whether or not there are known problems or defects with the structure or foundation. A seller can check ‘yes’, ‘no’ or ‘no representation’. If a seller checks ‘no’ knowing that there is a structural defect, for example, then he/she breached the contract and was fraudulent in their assertion. If a licensed realtor knows that the seller has lied on the disclosure statement, then he/she is subject to discipline.
Don’t practice law, unless you have a law license and are a member of the North Carolina State Bar. This is another common error that some licensed realtors make and it’s not necessary. Most of the contracts for real estate transactions are standard and available through the NC Association of Realtors. If your client wants something in the contract that cannot just be inserted into the blanks of the form, then have them call an attorney. Need the name of an attorney? Call me I know a number of real estate attorneys that I trust. Curious if what you are about to do is practicing law? Check out G.S. § 84-2.1. That statute defines what is the practice of law in North Carolina.
Yes, you can be sued if you help a client lie on their disclosure statement. An attorney will more than likely include you as a Defendant in a civil action. You could face at least actions for fraud, unfair and deceptive trade practice, and breach of contract. Your license took you time and money to acquire. Don’t risk your professional license for a client. It’s not going to be worth it. If a client insists that you do something unethical then drop him/her as a client and move on. Failing to move on and proceeding with perpetrating a fraud with your client, then you open yourself up to civil liability. You will also have to deal with the prospect of having your professional license suspended or revoked.
As always, check out our blog page here for information on other professional license areas or call us at 919-521-8810 to set up a consultation.