License Law Changes: Commercial Brokerage,

Pencil and Paper Exams, Corporate Applicants

by Miriam J. Baer, Assistant Director, Legal Services

At its recently concluded session, the General Assembly enacted and Governor Easley signed legislation making certain changes to the Real Estate License Law affecting commercial brokerage, licensing examinations, and out-of-state corporate applicants.

Out-of-State Commercial Brokers
Perhaps the most significant change in the law allows the Commission to issue limited broker or salesperson licenses to commercial real estate practitioners licensed in other states. There are limitations on this license:
• The commercial broker or salesperson must affiliate with a North Carolina broker while practicing in this state; and
• The commercial broker or salesperson cannot engage in residential transactions in North Carolina.
The effect of the change is to permit a commercial broker or salesperson who is licensed in good standing in another state to apply for a limited license in North Carolina. Upon licensure and affiliation with a North Carolina broker, the out-of-state commercial broker or salesperson may enter this state to participate in commercial transactions.

This change was initiated by commercial brokers who believe that a stream-lined mechanism for licensing non-resident commercial brokers and salespersons will result in economic benefit to the state by encouraging commercial enterprises to look to North Carolina as a place to locate their businesses. It was supported by the North Carolina Association of REALTORS®.

The Commission will next undertake rule-making to set out the mechanics for how such licenses will be issued and regulated.

Licensing Examination
The law changes also allow the Commission to retire the existing option to take a paper and pencil licensing examination in favor of the computerized examination. Demand for the paper and pencil exam is low, and dropping steadily. Of the approximately 700 people tested each month, only about 20 request the paper and pencil option. Paper and pencil examinations would still be available to persons with special needs and disabilities.

Out-of-State Corporate Applicants
Finally, a new provision in the law eliminates certain archaic requirements relating to a corporation’s Consent to Service of Process. It replaces them with the simple requirement that the Consent to Service be signed by a corporate officer and provides that such signature shall be sufficient to bind the corporation.
The Commission believes these changes will benefit licensees, applicants and consumers.

Limited Commercial Licenses

The Commission hopes to begin accepting limited commercial license applications from qualified brokers and salespersons in other states by July, 2004.
To implement the program, the Commission must first adopt rules and establish administrative procedures requiring months to complete.