The following article was written and submitted for publication by a real estate broker who was disciplined by the Real Estate Commission for trust account violations following an audit of his trust account. The Commission wishes to express its appreciation to the author for his willingness to share his experience with other licensees in the hope that they might avoid similar action.
It was a few days after Christmas. A gloomy day at that, both in weather and events. It got even more gloomy when I received a telephone call at home from my assistant who advised me that the auditor from the North Carolina Real Estate Licensing Board had come by to audit my accounts.
On my way to the office many thoughts passed through my mind. I thought "They're just out 'to get me * I They have their quota to nail down so they can print it in the quarterly bulletin and scare others to death." And "Why should it have to be me. After all, I have never had a single complaint from either a buyer, seller, property owner ' tenant, or even another broker which would be serious enough to turn over to the Licensing Board." I remembered reading that an audit or check-up could be made on anyone at any time without prior notice, but I never thought that it could happen to me; furthermore, I kept my records so there was always plenty of money in my bank account so that checks would not bounce. Why should it be me?
When I arrived at my office I was very surprised to find that the auditor was most cordial and yet at the same time very professional. She advised me that this was a routine audit, that no complaint had been made against my operation, and that she would be glad to help me in any way possible. It took the auditor quite some time to perform the audit due to my confused system of bookkeeping. Yet during the entire time she continued to remain cordial and friendly, yet very professional. A number of discrepancies were found and shortages detected. But although I corrected the shortages at once, the matters were still serious enough to warrant a hearing before the Real Estate Licensing Board.
The waiting period before the hearing was enough to keep me guessing and very uptight, and when I went to the hearing I had predicted that they would be out "to get me." Instead I found a very considerate group who certainly rendered the least punishment they could. To me the real punishment was in waiting for the hearing and having my name appear in the disciplinary column of the bulletin for the many thousands of real estate brokers, salesmen and others to read about. This is where the real punishment comes into being.
But since going through the experience of an audit and a- hearing, I have at least changed my views about the Real Estate Licensing Board. It is not the "witch hunting agency" that I had pictured it to be. But rather, it is a group of people charged with the responsibility to protect the public -which is all of us. And I further believe that it is our responsibility as brokers and salesmen to help them upgrade the real estate industry.
My purpose in writing this letter is to warn others of the dangers and punishments involved in not having your trust accounts in order, hoping that they can escape what I went through. My advice to them is this: To avoid this happening to you, get your trust and escrow accounts in order quick! As I found, ignorance and indifference are no excuses.