License Law Amendments
Benefit
Consumers, Licensees
On April 1, 2006,
Highlights
of the Law Changes
•
Increasing the education required to obtain a real estate license.
•
Adding a substantial postlicensing education
requirement that all new licensees must satisfy.
• Eliminating the “salesperson” license category as
part of a “broker only” licensing system.
• Converting
existing “salesperson” licenses to “broker” licenses and requiring
licensees to either demonstrate substantial recent brokerage experience or take
additional education.
• Requiring prospective brokers-in-charge of
real estate offices to complete additional specialized education and possess substantial
brokerage experience.
Advisory committees of the Commission and the
North Carolina Association of REALTORS® had reported to the Commission problems
with brokers who had become brokers-in-charge of real
estate offices with little or no actual real estate experience. They also expressed concern that many newly
licensed salespersons did not appear to possess a thorough knowledge of some
very important aspects of brokerage practice.
It was further noted that real estate consumers did not differentiate
between salespersons and brokers as to the level of service they expected. The Commission determined that the best
solution was to adopt a “broker only” licensing system, to increase education
requirements for new licensees, and to require brokers-in-charge to be better
qualified. Legislation to accomplish
these goals and objectives was proposed by the Commission and enthusiastically
supported and promoted by the REALTORS® Association. The legislation was unanimously enacted by
both houses of the General Assembly and signed into law by Governor
Easley.
Since enactment of the law changes, the
Commission and its staff have been working diligently to adopt the many rules
and policies, develop courses, create computer programs and complete a
multitude of other tasks necessary to implement this massive new program on
April 1 - - in addition to processing a record number of license applications
and broker-in-charge declarations.
But perhaps the most challenging task which
the Commission has encountered has been that of informing and educating
licensees about the coming changes and how it will affect them. Articles have been published in this
newsletter, information posted on the Commission’s website, notices sent to
real estate schools and instructors and letters sent to all salespersons and
brokers-in-charge.
To respond to the heavy volume of calls that
this has generated, additional help has been recruited and trained. Nevertheless, you may still encounter delays
contacting the Commission office. For
this reason, the Commission requests your patience and understanding during
this very busy time and asks for your cooperation by carefully reading this
article, the letters to salespersons and brokers-in-charge reprinted in this Bulletin and other explanatory materials available to you on the
Commission’s website, www.ncrec.state.nc.us.
Following is a more detailed discussion of
the new licensing requirements, the April 1 conversion of salesperson licenses
to “provisional broker” licenses, and the new broker-in-charge requirements.
NEW
LICENSING
REQUIREMENTS
Persons applying for real estate licenses on
or after April 1, 2006 must first complete a 75-hour prelicensing
course (currently 67 hours). Upon
passing the license examination, they will be issued a “provisional broker”
license (technically a broker license on “provisional” status) which is
actually the same as a current salesperson license with regard to activities
the provisional broker is authorized to perform. Thus, provisional brokers must continue to be
supervised by a broker-in-charge and may not, of course, be broker-in-charge of
their own or any other office. The
license certificate will only say “Broker”, but the pocket card will reflect
that it is on “provisional” status.
Persons with provisional broker licenses issued
or reinstated on or after April 1 must complete three 30-hour postlicensing courses within three years after licensure
(at least one course each year). Upon completing the three postlicensing
courses, the “provisional” status of the broker’s license will be
terminated. If a provisional broker
fails to complete at least one course by the end of the first year (or a second
course by the end of the second year), his or her license will be placed on
“inactive” status until the required education is completed. And if a provisional broker fails to complete
all three postlicensing courses within three years,
the license will be cancelled and the former licensee must satisfy the
requirements for license reinstatement.
The postlicensing
courses will be offered by the same schools that offer prelicensing
courses and will include a final examination.
When the Commission receives notice from the school that the provisional
broker has completed the final course, it will terminate the “provisional”
status of the license. [Nonresident
CONVERSION
OF
SALESPERSON
LICENSES TO PROVISIONAL BROKER LICENSES
Also on April 1, all salesperson licenses
will be converted to “provisional broker” licenses. Persons licensed as salespersons between October 1, 2005 and March 31,
2006 must satisfy the postlicensing education requirement described above to
avoid having their “provisional” broker licenses placed on “inactive” status or
eventually cancelled. Persons licensed as salespersons before October 1, 2005 must, prior to April 1, 2008, either
complete a 24-hour Broker Transition Course or demonstrate at least four years full-time
(or equivalent) brokerage experience within the previous six years to avoid
having their “provisional” broker licenses placed on “inactive” status.
How to Terminate
“Provisional”
Status by Taking the
Broker Transition Course
If your salesperson license was issued before
October 1, 2005 (look at the issuance date on your license certificate) and you
cannot satisfy the experience option, you will need to take the 24 classroom
hour Broker Transition Course. This
course will have no “end-of-course exam” and will count as your continuing
education elective course for the license period in which you take it (or
carryover credit if you have already taken your elective course for the
period). The course will be offered by
continuing education Update Course sponsors who will report your completion of
the course to the Commission. So you
will not need to request termination of “provisional” status upon completing
this course. [Nonresident
How to Terminate
“Provisional”
Status Based Upon
Real Estate Experience
You may have the “provisional” status of your
broker license terminated without taking the Broker Transition Course if:
1. Your salesperson license was issued before October 1, 2005; and
2. You have at least four years experience as a licensed broker
and/or salesperson at the time you request termination of “provisional” status
(which can include experience acquired between April 1, 2006 and April 1,
2008); and
3. Your experience was
acquired within six years preceding the time you request termination of “provisional” status;
and
4. You were working as a broker or salesperson on a full-time (or
equivalent part-time) basis and your license was on
active status when you acquired the experience. “Full-Time” means at least 40
hours per week. Only experience
performing activities that require a real estate license (listing, selling,
property management, etc.) is acceptable, including experience obtained in
another state. Experience gained as a licensed real estate assistant is
acceptable. But you cannot claim credit
for work performed as a secretary, bookkeeper or manager of a real estate
office, or as a leasing agent performing acts exempt from licensure - even
though you were licensed as a broker or salesperson at the time.
To request the Commission to terminate the
“provisional” status of your broker license:
1. Go to the Commission’s
website, www.ncrec.state.nc.us
2. On the website, go to
“Licensee Login” and enter your license number and PIN.
3. From the “Menu”, select
“Provisional Broker Certification of Experience” which will contain a statement
for you to certify to the Real Estate Commission that you possess the
experience required to terminate the “provisional” status of your broker
license.
4. Enter the information
requested on the “Certification of Experience” screen, and you will be promptly
sent a new license pocket card reflecting that your broker license is no longer
on “provisional” status.
By submitting the above information to the
Real Estate Commission, you are certifying to the Commission that you possess
the experience required to terminate the “provisional” status of your broker
license. You will not, at that time, be
required to produce evidence of your experience, but you should be prepared if
the Commission later asks you to do so.
Here are some suggestions for records you may wish to have on hand
should the Commission request you to verify your real estate experience. They are listed in the order preferred by the
Commission.
1. Written statement(s) from
your current and/or former broker(s)-in-charge or other firm officials giving
the dates of your affiliation with the firm(s) and stating that during those
dates, you were engaged in the business of a real estate broker and/or
salesperson on a full-time basis (at least 40 hours per week) or, if not
full-time, the approximate number of hours worked per week; and/or
2.
Transaction documents (copies of sales contracts, agency agreements,
leases, etc.) from the period for which you are seeking credit; and/or
3. A
list of transactions in which you participated during the period for which you
are seeking credit giving the approximate dates of the transactions, types of
properties involved, the names of the parties and any other agents in the
transaction, and a description of your role in them (listing agent, rental
agent, etc).
Due to the large number of persons expected
to seek termination of the “provisional” status of their broker licenses based
upon their real estate experience, the Real Estate Commission staff will be unable to evaluate or
comment on the adequacy of your experience. Therefore, if you will
not be able to produce for the Commission upon request documentation which
reasonably demonstrates that you were engaged in the business of a licensed
real estate broker and/or salesperson on a full-time (or equivalent part-time)
basis for at least four out of the past six years prior to certifying your
experience, you are advised to complete the 24-hour Broker Transition Course.
NEW BROKER-IN-CHARGE
REQUIREMENTS
Generally, all active real estate firms and
sole proprietorships must have a broker-in-charge designated with the
Commission for each real estate office.
(There are exceptions for “sole practitioners” who have no associates,
handle no trust monies, and don’t advertise or otherwise promote their services
as a broker in any way; and for certain Subchapter S corporations.)
Broker-In-Charge
Qualification Requirements
If you want to become a broker-in-charge on
or after April 1, 2006 you must:
1. Hold an active broker
license which is not on “provisional” status; and
2. Possess two years
full-time (or equivalent part-time) experience as a broker and/or salesperson
in
3. Complete the Commission’s
12 classroom hour Broker-In-Charge Course within three years prior to or 120 days
following your designation as broker-in-charge.
You will receive continuing education elective course credit during the
license period in which the course is taken.
This course will be offered by the Commission at various locations each
month. Brokers-in-charge may obtain the
course schedule and register for the course via the Commission’s website, www.ncrec.state.nc.us.
[Nonresident brokers-in-charge whose offices
are in another state are exempt from the course requirement.]
How to Certify and Verify
Broker-In-Charge
Qualifying Experience
Beginning April 1, to designate yourself as a broker-in-charge, you should access the
Commission’s website, www.ncrec.state.nc.us, and complete online the “Broker-In-Charge Declaration
Form”. It will contain a statement for
you to certify to the Real Estate Commission that you possess the experience
required to qualify as a broker-in-charge.
You will not be required to produce evidence of your experience at that
time, but you may later be requested to do so by the Commission. For more information on what constitutes
acceptable experience and how to verify it, see the previous discussion about
how to terminate “provisional broker” status based on real estate experience
and how to verify such experience.
Broker-In-Charge
Continuing Education
Beginning July 1, 2006,
all brokers-in-charge must complete a four classroom hour Broker-In-Charge Annual Review Course each full license period after being
designated a broker-in-charge. When you
take the review course, it will count as your continuing education elective
course for the license period, but you must still complete the Real Estate Update continuing education course each license
period. The content of the Broker-In-Charge Annual Review Course will change each year.
Future Breaks in Service
If you are designated broker-in-charge before
April 1, 2006 and have satisfied the current or new broker-in-charge education
requirement, you may continue to serve indefinitely as broker-in-charge so long
as there is no break in your service for any reason. If there is a break in service, and you
subsequently want to again become a broker-in-charge, you must satisfy the
education and experience requirements in effect at that time. If you terminate yourself as broker-in-charge
from one office and simultaneously designate yourself broker-in-charge of
another office with the same or a different firm, this will not be considered a
break in service.