Preparations underway for 1998-99 Real Estate Update Course

Commission staff is now preparing the mandatory Real Estate Update continuing education course for the current license year (through June 1999) for use by approved instructors and sponsors. Planned topics for the course are described below.

• The Commission has adopted amendments to a number of rules to be effective August 1, 1998. Some of the rule changes that will be addressed in the course include:
• Revised requirement relating to display of license certificates and use of license pocket cards.
• Revised requirements for reporting changes to the Commission.
• Changes to rule regarding the handling of and accounting for trust funds.
• Changes to rule relating to retention of transaction records.
• Rule clarifying that licensees may not compensate or share compensation with unlicensed persons or entities for acts performed in North Carolina which require a real estate license.
• Minor changes to the broker-in-charge rule.
• New requirement for licensees to respond within 14 days to a formal Letter of Inquiry from the Commission.

In accordance with 1997 changes to the Residential Property Disclosure Act, the Commission has adopted by rule a new Residential Property Disclosure Statement form (see pages 7 and 8 of this Bulletin) which becomes effective October 1, 1998. The Update course will address the new form in depth, and will briefly discuss licensees' responsibilities as they relate to the form.

The Commission expects the new form to be well-received by licensees because it is considerably more detailed than the original form and is more informative to prospective buyers.

There is still considerable misunderstanding about how to comply with agency common law and the Commission's agency rules in certain types of situations. The course will address several problem areas related to agency practice, including the following:

• Acting as the agent of a buyer or prospective buyer in a transaction without a written buyer agency agreement.
• Failure by a licensee to provide to a prospective buyer at first substantial contact written disclosure of the licensee's status as a seller's agent or subagent when the licensee has no written buyer agency agreement with the prospective buyer. (See pages 13 and 14 of this Bulletin.)
• Transactions in which the prospective buyer won't sign a buyer agency agreement and some firms in the area won't offer subagency (i.e., will only co-broke on their listings with a buyer's agent). [Possible solution: Using a non-exclusive buyer agency agreement.]
• Misunderstandings about what constitutes dual agency.

Some of the other issues that will be addressed in the course include:

• What happens when a licensee lets his/her license expire and then "late renews" the expired license.
• What happens when the license of a principal broker or firm expires.
• Miscellaneous improper acts by licensed salesmen, such as: Acting independently of their broker-in-charge; accepting compensation directly from persons/firms other than their employing broker; etc.
• Proper handling of transactions in progress and old clients when licensees change firms.