§ 93A-1. License required of real estate brokers +7North Carolina · Real Estate · English

Effective July 1, 1957, it is unlawful for any person, partnership, corporation, LLC, association, or other business entity to act as a real estate broker or engage in the business of real estate brokerage without first obtaining a license from the North Carolina Real Estate Commission. This applies even to those licensed in another state who affiliate with an NC broker.

• ✓No person or entity may act as a real estate broker without a Commission-issued license
• ✓A license must be obtained even if the person is licensed in another state and affiliated with an NC broker
• ✓Advertising or holding oneself out as engaging in brokerage without a license is unlawful

Any person or business entity who directly or indirectly engages in the business of a real estate broker for compensation while physically in North Carolina must hold a NC real estate broker license. A licensee may only act as an 'agent' for a party to a transaction. A licensee is NOT automatically a REALTOR® — that term applies only to members of the National Association of REALTORS®.

• ✓A license is required to engage in brokerage for compensation while physically in NC
• ✓A licensee is not automatically a REALTOR®; that requires NAR membership
• ✓There is no exemption for engaging in a limited number of transactions
• ✓Even one transaction for any fee (referral fee, finder's fee) requires a license

The entry-level license status. A person completing the 75-hour prelicensing course and passing the exam is issued a broker license on 'provisional' status. A provisional broker must be supervised by a broker-in-charge and may never operate independently. This status is temporary — postlicensing education must be completed to remove the provisional status.

• ✓Must complete 75-hour prelicensing course and pass the exam
• ✓Must be supervised by a broker-in-charge at all times
• ✓May not operate independently in any way
• ✓Must complete postlicensing education to remove provisional status
• ✓Provisional broker may never engage in brokerage for more than one company at a time

A provisional broker who completes all postlicensing education becomes a 'broker' without retaking the exam. A broker is not required to be supervised by a BIC to hold active status. An applicant with an equivalent current license in another U.S. jurisdiction active within the previous 3 years may pass only the State portion of the exam to obtain a NC broker license.

• ✓Becomes a broker by completing postlicensing education, no new exam
• ✓A broker is NOT required to be supervised by a BIC for active status
• ✓Out-of-state applicants active within previous 3 years may take only the State portion of the exam
• ✓Brokers operating independently generally must qualify as broker-in-charge

BIC is not a separate license but a license status category. Each real estate office must have a designated BIC. To qualify: license must be on active (not provisional) status, broker must have 2 years full-time or 4 years part-time brokerage experience within the previous 5 years, and complete a 12-hour Broker-In-Charge Course no earlier than one year prior or within 120 days after designation.

• ✓License must be active and NOT provisional to be BIC
• ✓Requires 2 years full-time or 4 years part-time brokerage experience within previous 5 years
• ✓Must complete 12-hour BIC Course (within 120 days of designation)
• ✓BIC is a status category, not a separate license
• ✓Must be designated as BIC with the Commission

Persons performing certain activities as an agent for others for consideration are performing brokerage and must be licensed. These include listing, selling/buying, leasing/renting, conducting auctions, dealing in interests in connection with business sales, and referring parties for compensation.

• ✓Listing or offering to list property requires a license
• ✓Selling, buying, leasing, or renting property as agent requires a license
• ✓Conducting a real estate auction requires a license (also an auctioneer's license)
• ✓Referring a party for compensation requires a license
• ✓No licensee may pay a finder's/referral/'bird dog' fee to an unlicensed person

Any person or business entity who directly or indirectly engages in the business of a real estate broker for compensation (or promise thereof) while physically in North Carolina must hold an NC real estate broker license. A licensee may only act as an 'agent' for a party. A licensee is NOT automatically a REALTOR; that term applies only to members of the National Association of REALTORS.

• ✓A license is required to engage in brokerage for compensation while physically in NC
• ✓There is no exemption for a limited number of transactions - even one transaction for compensation requires a license
• ✓A licensee is not a REALTOR unless a member of NAR

The entry-level license status. A person meeting all qualification requirements (75-hour prelicensing course and passing the exam) is issued a broker license on 'provisional' status. A provisional broker may perform the same acts as a broker but must be supervised by a broker-in-charge and may never operate independently. This is a temporary status - postlicensing education must be completed to remove it.

• ✓Provisional brokers must be supervised by a broker-in-charge at all times
• ✓A provisional broker may not operate independently in any way
• ✓Provisional status is temporary and requires postlicensing education to remove
• ✓75-hour prelicensing course and passing the license exam are required

A broker-in-charge (BIC) is a broker designated as responsible for supervising provisional brokers and administrative/supervisory duties at a particular office. Each real estate office must have a designated BIC. To qualify, a broker's license must be active but not provisional, have 2 years full-time or 4 years part-time brokerage experience within the previous 5 years, and complete a 12-hour BIC Course.

• ✓Each office must have a designated broker-in-charge
• ✓BIC license must be active but not provisional
• ✓Requires 2 years full-time or 4 years part-time experience within previous 5 years
• ✓Must complete 12-hour BIC Course (no earlier than 1 year prior or 120 days after designation)

Performing for compensation as an agent for others: listing, selling/buying, leasing/renting real estate (or offering to), conducting a real estate auction, dealing in interests in real estate connected with sale of a business, and referring a party for compensation. No fee is too small to trigger licensing.

• ✓Referral, finder's, or bird-dog fees to unlicensed persons are prohibited
• ✓No amount of consideration is too small to require a license
• ✓An auctioneer's license is also required to auction real estate
• ✓Referring a party for compensation requires a license

A broker or salesperson residing outside NC holding an active license in their primary state may obtain a NC limited nonresident commercial broker license to handle commercial real estate transactions in NC. They remain affiliated with their out-of-state company but must enter into a notification of broker affiliation and brokerage cooperation agreement with a resident NC broker (not provisional) who supervises them.

• ✓Restricted to commercial real estate transactions in NC
• ✓Must have active license in primary state of business
• ✓Must enter a notification of broker affiliation and brokerage cooperation agreement with a resident NC broker
• ✓Must be supervised by the resident NC broker
• ✓It is a separate license

In addition to individuals, business entities must be licensed. Any corporation, partnership, LLC, association or other business entity (other than a sole proprietorship) must obtain a separate real estate firm broker license.

• ✓Corporations, partnerships, LLCs and associations must obtain a separate firm broker license
• ✓Sole proprietorships do not need a separate firm license

A provisional broker who satisfies all postlicensing education requirements becomes a 'broker' without another examination. A broker is not required to be supervised by a broker-in-charge to hold active status. An out-of-state applicant with an equivalent license active within the previous 3 years may pass only the State portion of the exam.

• ✓Postlicensing education terminates provisional status without a new exam
• ✓A non-provisional broker need not be supervised to hold an active license
• ✓Equivalent out-of-state licensees active within 3 years may pass only the State portion of the exam

A broker/salesperson residing outside NC with an active license in their home state may obtain an NC limited nonresident commercial broker license to engage in commercial real estate transactions in NC. The licensee must enter a notification of broker affiliation and a brokerage cooperation agreement with a resident NC broker (not provisional) who supervises them.

• ✓Only permits commercial real estate transactions in NC
• ✓Requires notification of broker affiliation and brokerage cooperation agreement with a resident NC broker
• ✓The resident NC broker must supervise the nonresident and cannot be on provisional status
• ✓It is a separate license

Business entities (corporation, partnership, LLC, association, other than sole proprietorship) engaging in brokerage must obtain a separate real estate firm broker license, in addition to individual licenses.

• ✓Business entities must obtain a separate firm broker license
• ✓Sole proprietorships are excepted from the firm licensing requirement

Unlicensed salaried/hourly employees (not paid per-transaction) may perform limited acts: forwarding calls, submitting MLS data compiled by a licensee, obtaining public records, placing signs/lockboxes at licensee direction, acting as courier, providing basic factual info, scheduling showings, typing forms from licensee drafts, recording/depositing trust monies under BIC supervision, and computing commissions.

• ✓Unlicensed employees must be salaried/hourly, not paid per-transaction
• ✓May not negotiate or provide information beyond basic advertised facts
• ✓May show/lease rental properties managed by employing broker
• ✓Trust money handling must be under close BIC supervision

Exempt persons include: a business entity managing its own real estate (extends to officers/employees); attorney-in-fact under a power of attorney for final consummation only; NC attorneys practicing law; receivers/trustees/guardians/executors acting under court order; trustees under a written trust; certain salaried employees of broker-property managers; individual owners selling/leasing own property; and housing authorities.

• ✓Owners selling/leasing their own property are exempt
• ✓Attorney-in-fact exemption applies only to final consummation, not to circumvent licensing
• ✓NC attorneys are exempt only when performing acts constituting the practice of law
• ✓A person acting under a court order (receiver, executor, etc.) is exempt

Option money and due diligence fees are paid directly to the seller, who is named as payee on the check. Because these checks are not payable to the broker or firm (unlike earnest money), they should NOT be deposited into the broker's trust account. Either the listing agent or buyer's agent may hold the negotiable instrument until a contract is formed, at which point it is delivered to the seller as soon as possible.

• ✓A broker may not retain a negotiable instrument for more than three business days after acceptance of the option or sales contract
• ✓Option money/due diligence fee checks are written to the seller as payee and are not deposited in the broker's trust account
• ✓'Custody' in the rule means possession

If a buyer gives the broker CASH (rather than a check) for option money or a due diligence fee, the broker must immediately deposit the cash in the trust account pending contract formation. Cash must always be deposited within three banking days of receipt with no exceptions. Once a contract is formed, the broker writes a trust account check payable to the seller, noting in the memo and records that it is for the option/due diligence fee.

• ✓Cash must always be deposited into a trust account within three banking days of receipt — no exceptions
• ✓When cash is received for option/due diligence fee, broker deposits it in trust account, then disburses to seller by trust account check upon contract formation

Rule A.0116(g) places on every licensee the responsibility to safeguard money or property of others coming into their possession per the License Law and Commission rules. Licensees are prohibited from converting others' money/property to their own use or misapplying it.

• ✓A broker shall not convert the money or property of others to his or her own use
• ✓A broker shall not apply money/property to a purpose other than intended, nor assist another in conversion or misapplication

Exchange companies must disclose specific data to purchasers including the percentage of confirmed exchanges (confirmed exchanges divided by exchanges properly applied for), the number of outstanding exchange obligations for future years, and the number of exchanges confirmed during the year. A conspicuous statement must clarify that the confirmed-exchange percentage is only a summary and does not indicate any purchaser's probability of being confirmed to a specific choice.

• ✓Percentage of confirmed exchanges = number confirmed / number properly applied for
• ✓A conspicuous-type statement must accompany the percentage explaining it does not indicate individual confirmation probability
• ✓The purchaser must certify in writing to receipt of the required information

Information required by subdivisions (2),(3),(13),(14),(15),(17) must be accurate as of December 31 of the prior year, except information delivered in the first 180 days of a calendar year which must be accurate as of December 31 two years prior. All remaining required information must be accurate as of a date no more than 30 days before delivery.

• ✓Certain information must be accurate as of Dec 31 of the preceding year
• ✓Information delivered in the first 180 days may be accurate as of Dec 31 two years prior
• ✓Remaining information must be accurate within 30 days of delivery

When an exchange company offers a program directly to a purchaser/owner, it must deliver the required information concurrently with the offering and prior to executing any contract. Promotional materials containing the confirmed-exchange percentage must include the required disclaimer statement.

• ✓Information must be delivered concurrently with offering and before contract execution
• ✓Requirements do not apply to contract renewals between owner and exchange company
• ✓Promotional materials using the confirmed percentage must include the required disclaimer statement

A real estate broker is any person or business entity who, for compensation or valuable consideration (or promise thereof), lists, sells, buys, auctions, negotiates, leases, or rents real estate or improvements for others. A mere crier of sales is specifically excluded.

• ✓Broker activity requires compensation or valuable consideration or promise thereof
• ✓Activities include listing, selling, buying, auctioning, negotiating, leasing, and renting for others
• ✓A mere crier of sales is not a broker

A broker-in-charge is a broker designated as responsible for supervising provisional brokers at a particular office and performing administrative/supervisory duties. A provisional broker is a broker who must be supervised by a broker-in-charge pending completion of postlicensing education or experience under G.S. 93A-4(a1) or 93A-4.3.

• ✓A broker-in-charge supervises provisional brokers at a particular real estate office
• ✓A provisional broker must be supervised by a broker-in-charge when performing licensed acts
• ✓A provisional broker may not be designated as a broker-in-charge

A real estate salesperson means any person who was formerly licensed by the Commission as a salesperson before April 1, 2006. After that date, salesperson licenses were discontinued and converted to broker licenses.

• ✓Salesperson refers only to persons formerly licensed before April 1, 2006
• ✓Salesperson licenses were discontinued effective April 1, 2006

G.S. 93A-1 and 93A-2 do not apply to entities acting as owner or lessor performing acts incident to managing their own property. The exemption extends to W-2 officers/employees of exempt corporations, general partners/W-2 employees of partnerships, managers/member-managers/W-2 employees of LLCs, and natural person owners of closely held entities (LLC or corporation with no more than two legal owners, at least one a natural person).

• ✓Owners/lessors managing their own property in the regular course are exempt
• ✓A closely held business entity has no more than two legal owners, at least one a natural person
• ✓W-2 officers/employees, general partners, and managers of exempt entities may qualify for exemption

When a person conducts a real estate transaction under a subdivision (c)(1) exemption, they must disclose in writing to all parties that they are not licensed, the specific exemption that applies, and the legal name and physical address of the property owner and the closely held business entity acting under sub-subdivision e, if applicable. This disclosure may appear on the face of the lease or contract.

• ✓Written disclosure of unlicensed status and specific exemption must be given to all parties
• ✓The legal name and physical address of the owner must be disclosed
• ✓Disclosure may be included on the face of a lease or contract

Other exemptions include: attorneys-in-fact under power of attorney for final consummation of a contract; active NC State Bar attorneys practicing law; receivers, trustees in bankruptcy, guardians, administrators, executors, or those acting under court order; trustees under written trust/deed of trust/will and their salaried employees; certain salaried employees of licensed brokers managing property; individual owners selling/leasing their own property; and housing authorities and their salaried employees.

• ✓An individual owner who personally leases or sells their own property is exempt
• ✓A salaried employee of a licensed broker may exhibit units, provide info, accept applications, complete preprinted leases, and accept deposits, but cannot negotiate leases or deposit amounts
• ✓Attorneys who are active NC State Bar members performing legal services are exempt

Both G.S. §93A-82 and G.S. §93E-1-4(7c) define a 'broker price opinion' (BPO) and 'comparative market analysis' (CMA) identically as an estimate prepared by a licensed broker detailing the probable selling or leasing price of a property, with varying detail about condition, market, neighborhood, and comparable properties — but NOT including an automated valuation model. The terms have exactly the same legal meaning; a CMA is typically for a seller/buyer client and a BPO is typically for a third party (e.g., foreclosure or short sale decision).

• ✓BPO and CMA have exactly the same legal meaning under the statutes
• ✓A BPO/CMA does not include an automated valuation model (AVM)
• ✓A CMA is commonly for actual/prospective clients; a BPO is commonly for third parties for non-loan-origination purposes

A non-provisional broker with a current, active license may prepare a BPO or CMA for a fee for a variety of persons and entities for many reasons — not just for actual or prospective brokerage clients. A provisional broker may NOT perform a BPO or CMA for a fee for anyone.

• ✓Only a non-provisional broker on active status may perform a BPO/CMA for a fee
• ✓A provisional broker may NOT perform a BPO or CMA for a fee for anyone [G.S. §93A-83(a) and (b)]

A broker may NOT prepare a BPO or CMA for an existing or potential lienholder or third party where it will serve as the basis to determine the value of a property for the purpose of originating a mortgage loan — including first and second mortgages, refinances, or equity lines of credit.

• ✓A broker may not prepare a BPO/CMA to value property for the purpose of originating a mortgage loan [G.S. §93A-83(b)(6)]
• ✓The prohibition covers first/second mortgages, refinances, and equity lines of credit

A BPO or CMA may only estimate the 'probable selling price' or 'probable leasing price' of a property — not its 'value.' If a BPO/CMA proposes to estimate the 'value' or 'worth' of a property, it is legally considered a 'real estate appraisal' that may only be prepared by a licensed or certified real estate appraiser, not a broker.

• ✓A BPO/CMA may only estimate probable selling price or probable leasing price, not value [G.S. §93A-83(f)]
• ✓Estimating 'value' or 'worth' constitutes a real estate appraisal requiring a licensed/certified appraiser

Any broker — provisional or non-provisional — may perform a BPO/CMA for any party when NO FEE is charged. Compensation for general brokerage services under a brokerage agreement is not considered a 'fee' under Article 6, nor is the mere possibility of earning a brokerage fee from a prospective client. However, the Commission expects every CMA/BPO to be performed competently and without undisclosed conflict of interest, even when no fee is received. Licensees should follow Rule 58A.2202 standards for guidance even for no-fee work.

• ✓Any broker, including a provisional broker, may perform a BPO/CMA for free for any party
• ✓Brokerage compensation under a brokerage agreement is NOT a 'fee' under Article 6
• ✓Every CMA/BPO must be competent and free of undisclosed conflict of interest even if no fee is charged

A BPO/CMA provided for a fee must be performed in accordance with Article 6 of the License Law and standards in Commission rules (Section A.2200). It must be in writing and address matters specifically required by statute or rule.

• ✓A BPO/CMA for a fee must comply with Article 6 and Section A.2200 standards
• ✓A BPO/CMA must be in writing and address matters required by statute/rule [G.S. §93A-83(c)]

Article 6 and Commission rules (Section A.2200, especially Rule 58A.2202) set specific standards for fee-based BPOs/CMAs. Brokers use the same valuation concepts and methodology as appraisers, but the analysis is less comprehensive and detailed, and the regulatory standards are less stringent than those for appraisers performing appraisals.

• ✓A broker uses the same valuation concepts/methodology as an appraiser but with less comprehensive analysis
• ✓Regulatory standards for brokers' BPOs/CMAs are less stringent than for appraisers' appraisals [Rule 58A.2202]

Commission rules allow a broker to report the probable selling or leasing price as either a single figure or a price range, recognizing brokers are not expected to be as precise as appraisers. When a range is given and the higher figure exceeds the lower by more than ten percent (10%), the broker must include an explanation of why the variance exceeds 10%.

• ✓Probable price may be reported as a single figure or a price range
• ✓If a range's higher figure exceeds the lower by more than 10%, the broker must explain the variance [Rule A.2202(h)]

The revised statutes eliminated the old restriction that limited CMAs to only the sales comparison approach. A broker performing a BPO/CMA to estimate probable selling or leasing price is now required to use income analysis methods where appropriate (income capitalization or gross rent multiplier for income-producing properties) in addition to the sales comparison method.

• ✓Brokers must use income analysis methods (income cap or gross rent multiplier) where appropriate for income-producing property [G.S. §93A-83(c)(3), Rule A.2202(e)]
• ✓The sales comparison method is no longer the only permitted method

Although Article 6 and Section A.2200 do not specifically require competence, incompetence has always been a basis for disciplinary action under the License Law, and this applies to BPOs/CMAs. If a broker lacks the education and experience to properly apply the required methodology (e.g., income capitalization for commercial property), the broker is expected to decline the assignment.

• ✓Incompetence in performing a BPO/CMA is grounds for disciplinary action
• ✓A broker not qualified for a property's required methodology must decline the assignment

Unlicensed salaried or hourly (not per-transaction paid) employees may perform limited ministerial acts such as forwarding calls, submitting licensee-compiled listing data to MLS, securing public records, placing signs/lockboxes at a licensee's direction, ordering minor repairs, acting as courier, providing basic advertised facts, scheduling showings, and handling clerical/bookkeeping tasks.

• ✓Unlicensed employees must be salaried or hourly paid, NOT per-transaction
• ✓May place signs and lockboxes at a licensee's direction
• ✓May provide only basic factual advertised information about listed property
• ✓May show rental properties managed by employer and complete preprinted leases
• ✓May type contracts from drafts completed by a licensee
• ✓May record/deposit trust monies under close supervision of the BIC

The NC Real Estate Commission consists of nine members serving three-year terms. Seven are appointed by the Governor and two by the General Assembly (on recommendation of the House Speaker and Senate President Pro Tempore). At least three must be licensed brokers and at least two must be public members not involved in real estate brokerage or appraisal.

• ✓Nine members serving three-year terms
• ✓Seven appointed by Governor, two by General Assembly
• ✓At least three members must be licensed brokers
• ✓At least two members must be public members

The principal purpose is to protect the public in dealings with brokers. Powers include licensing brokers/firms and registering time shares, administering education programs, providing education/information, and regulating/disciplining licensees. The Commission may NOT regulate commissions/fees or arbitrate contract disputes.

• ✓Principal purpose is protecting the public
• ✓Commission cannot regulate commissions, salaries, or fees
• ✓Commission does not arbitrate commission-division or contract disputes
• ✓Commission licenses brokers/firms and registers time-share projects

The Commission may reprimand, censure, suspend, or revoke a license. Licensees may surrender a license with Commission consent. The Commission may seek injunctive relief in superior court. License Law/rule violations are misdemeanors, but a Commission finding is not a criminal conviction. Licensees may be disciplined for prohibited acts even when handling their own property.

• ✓Disciplinary actions: reprimand, censure, suspension, revocation
• ✓Violations are misdemeanors but a Commission finding is not a criminal conviction
• ✓Licensees may be disciplined when buying/selling/leasing their own property
• ✓Commission may seek injunctive relief against unlicensed activity

The Real Estate Commission consists of nine members serving three-year terms. Seven are appointed by the Governor and two by the General Assembly (on recommendations of the House Speaker and Senate President Pro Tempore). At least three members must be licensed brokers and at least two must be public members not involved in real estate brokerage or appraisal.

• ✓Nine members serve three-year terms
• ✓Seven appointed by Governor, two by the General Assembly
• ✓At least three members must be licensed brokers
• ✓At least two members must be public members

The principal purpose is to protect the public in dealings with brokers. Powers include licensing brokers/firms and registering time share projects, administering education programs, providing education/information, and regulating and disciplining licensees. The Commission is prohibited from regulating commissions/fees and from arbitrating contract disputes.

• ✓Principal purpose is to protect the public
• ✓May license brokers/firms and register time share projects
• ✓May NOT regulate commissions, salaries, or fees
• ✓May NOT arbitrate disputes over commission rates or division

The Commission may reprimand, censure, suspend, or revoke a license, and may accept license surrender with consent. It may seek injunctive relief in superior court. Violations are misdemeanors, but a Commission finding is not a criminal conviction. Licensees may be disciplined for prohibited acts even when handling their own property.

• ✓Disciplinary actions: reprimand, censure, suspension, revocation
• ✓Commission may seek injunctive relief in superior court
• ✓Violations are misdemeanors but a Commission finding is not a criminal conviction
• ✓Licensees may be disciplined for prohibited acts on their own property [93A-6(b)(3)]