In addition to those amendments to the Real Estate License Law which were reported in the last issue of the Bulletin, the General Assembly further amended the License Law by enacting the North Carolina Time Share Act and by strengthening the education requirements for persons applying for real estate broker licenses. Following is a summary of these amendments.
Time Shares
In recent years a new concept in real estate ownership has emerged known as "time sharing" or "interval ownership." The term "time share" generally refers to the ownership or the right to use a specific housing unit (usually a condominium) for a given week each year over a period of many years. Time sharing is especially popular in resort areas where it is promoted as an attractive alternative to the high cost of vacation lodging. Consequently, as a vacation state, North Carolina has attracted a number of time share projects to its mountain and coastal areas.
Recognizing the need for regulation of this rapidly expanding industry, the North Carolina General Assembly during its 1983 Session enacted the North Carolina Time Share Act to become effective July 1, 1984. The legislation creating the Time Share Act was recommended by the North Carolina General Statutes Commission and supported by both the North Carolina Real Estate Commission and the Consumer Protection Section of the North Carolina Attorney General's Office.
Following is a summary of the major provisions of the Time Share Act:
1. All persons who sell time shares in North Carolina must hold North Carolina real estate licenses.
Prior to enactment of the Time Share Act, employees of time share owners and developers were not required to be licensed when selling time shares owned by their employers.
2. Developers of time share projects located in North Carolina must register their projects with the North Carolina Real Estate Commission.
Project registration involves paying a registration fee and filing an application for registration setting forth detailed information about the ownership of the project and its facilities.
3. Time shares are defined as being real estate.
Documents evidencing ownership of a time share may be recorded, thus providing time share owners the same protections afforded to owners of other real estate.
4. Purchasers must be given a public offering statement.
This document provides basic information to the purchaser regarding his total financial obligation under the purchase contract and other information regarding the time share offering.
5. Purchasers may (without penalty) cancel their purchase contract at any time within five days after the execution of the contract.
6. Purchasers must be given detailed information regarding exchange programs.
Under certain conditions, time share owners may be given the right to exchange their time share unit for a unit in another location. Under the new Act, purchasers must be given specific information regarding the potential for effecting an exchange and other information regarding any exchange program available to the purchaser.
7. Purchasers must be given a release of all liens affecting their time share.
8. The Real Estate Commission may discipline any broker, salesman or developer for violating the Time Share Act and may also fine developers for each violation of the Act.
Real estate brokers who are currently engaged in the sale of time shares or who are contemplating such activity are advised to contact the Real Estate Commission for a complete copy of the North Carolina Time Share Act.
Broker Education Requirements
After considerable discussion and debate, the General Assembly amended those provisions of the Real Estate License Law relating to qualification requirements for real estate broker licenses. The qualification requirements for salesman licenses were not changed.
Under the new law, effective September 1, 1984 applicants for broker licenses who have not had at least two years' experience as a licensed real estate salesman (or its equivalent) will be required to complete a real estate education program approved by the Commission consisting of at least 120 classroom hours of instruction. The current education requirement is 90 classroom hours.
The new program is to consist of a "Fundamentals Course" of at least 30 classroom hours which will qualify the student to take the salesman license examination; a 30-hour course in "Real Estate Law"; a 30-hour course in "Real Estate Finance"; and a 30-hour course in "Real Estate Brokerage Operations" which will address some of the more practical aspects of operating a real estate office.
It is hoped that through these increased requirements applicants for broker licenses will be better prepared for their licensing examinations and for entry into the real estate business as brokers.