Article 3. § 93A-35/38. Certification renewal and revocation +9North Carolina · Real Estate · English

Certifications expire June 30 following issuance and renew annually on July 1 if applications are filed by June 1. Renewal fees are capped at $125 per location and $25 per course. Certifications are not transferable upon sale of the provider. The Commission may suspend, revoke, or deny certification for noncompliance, false information, or crimes involving moral turpitude.

• ✓Certifications expire June 30 and renew annually on July 1
• ✓Renewal applications must be filed by June 1
• ✓Certification is not transferable when the provider is sold
• ✓The Commission may revoke certification for false information or moral turpitude crimes

The Commission establishes a continuing education program. A licensed broker must complete eight hours of instruction per year during any renewal period. Brokers-in-charge may be required to complete a special course of up to four hours annually. A broker who fails to complete CE may not actively engage in brokerage. Procedures allow deferral for brokers not actively engaged.

• ✓Brokers must complete eight hours of continuing education per year
• ✓A broker who fails CE requirements may not actively engage in brokerage
• ✓Brokers-in-charge may face an additional special course up to four hours
• ✓CE may be deferred for brokers not actively engaged in brokerage

An agreement is unfair, void, and in violation if it is to be in effect more than one year and aims to run with the land or bind future owners, allow assignment without owner notice/consent, or create a lien/encumbrance/security interest. A service provider has no right to a refund of consideration paid under an unfair agreement.

• ✓An agreement over one year that runs with the land or binds future owners is unfair and void
• ✓Creating a lien/encumbrance or allowing assignment without consent makes an agreement unfair
• ✓A provider has no right to a refund of consideration paid under an unfair agreement

This Article prohibits real estate service agreements unfair to residential real estate owners or future owners and prohibits recording them to keep public records clear. A real estate service agreement is a written contract between a service provider and an owner/potential buyer to provide current or future services connected with maintaining, purchasing, or selling residential real estate.

• ✓Residential real estate is property used primarily for personal, family, or household purposes
• ✓A service provider includes a real estate broker
• ✓The Article applies to written agreements for current or future residential real estate services

Recording an unfair real estate service agreement is prohibited, and any such recording (or notice/memorandum) is void, operating as no lien and providing no notice; it violates G.S. 14-118.6(a). No owner/buyer must record a voiding document. Injured parties may recover damages, costs, and attorney's fees, not offset by consideration paid. Any violation is a UDAP under G.S. 75-1.1, enforceable by the Attorney General.

• ✓Recording an unfair agreement is prohibited and any such recording is void
• ✓A void recording provides no lien and no actual or constructive notice
• ✓Injured parties may recover damages, costs, and attorney's fees not offset by consideration paid
• ✓Any violation is an unfair/deceptive trade practice under G.S. 75-1.1

The Article does not apply to home warranties, insurance contracts, transactions under Chapters 47G/47H, declarations under Chapters 47A/47C/47F, HOA maintenance/repair agreements, UCC security agreements, regulated utility service, property management contracts, or mechanics'/broker lien actions under Chapter 44A.

• ✓Home warranties, insurance contracts, and regulated utility service are exempt
• ✓Declarations under condominium/planned community acts and HOA maintenance agreements are exempt
• ✓Property management contracts and Chapter 44A lien actions are exempt

It is unlawful to act as a timeshare salesperson without a real estate broker license, unless exempt under 93A-2(c)(1) or as a W-2 employee of the registered developer. It is unlawful for a developer to sell a timeshare requiring registration without a certificate of registration. A person who intentionally acts as a developer without registration is guilty of a Class I felony.

• ✓Timeshare salespersons generally need a real estate broker license
• ✓Developers must obtain a certificate of registration before selling registrable timeshares
• ✓Intentionally acting as an unregistered developer is a Class I felony

The Article does not apply to arrangements where the maximum total financial obligation is $3,000 or less over the term, or where initial and renewal terms are each five years or less. Other exemptions include limited resales by consumer resellers (no more than seven in five years) and offerings by managing entities of 50 or fewer timeshares per year.

• ✓Arrangements with maximum obligation of $3,000 or less are exempt
• ✓Programs with initial and renewal terms of five years or less are exempt
• ✓Consumer resellers offering no more than seven timeshares in five years are exempt

A timeshare estate is the right to occupy a unit coupled with ownership of a real property interest (deemed real estate). A timeshare use is the right to occupy without ownership of a real property interest (governed as personal property). A developer creates, resells, or sells timeshares. A one-to-one use night to use right ratio ensures owners eligible to use never exceed available units.

• ✓A timeshare estate includes a real property interest and is treated as real estate
• ✓A timeshare use has no real property interest and is treated as personal property
• ✓The one-to-one use night to use right ratio limits owners to available units
• ✓An owner is any person, other than a developer, who has acquired a timeshare

A timeshare estate is an interest in real estate governed by NC real estate law; a timeshare instrument for an estate may be recorded, but instruments for timeshare uses may not be recorded. Unless otherwise provided, the developer must close and record the timeshare instrument within 180 days of the purchaser executing the contract, provided funds are escrowed. Developers cannot close a sale that exceeds the one-to-one use night to use right ratio.

• ✓Timeshare estates are interests in real estate; timeshare uses are personal property
• ✓Timeshare use instruments may not be recorded in the register of deeds
• ✓Developers must close and record within 180 days of contract execution, with funds escrowed
• ✓Developers may not sell/close sales exceeding the one-to-one use ratio

The timeshare contract of sale must include developer and program names/addresses, description of the timeshare, purchase price and charges, escrow agent info, and a conspicuous five-day cancellation notice stating the purchaser may cancel without penalty before midnight five days after signing or receiving the public offering statement, whichever is later.

• ✓The contract must include a conspicuous statement of the five-day cancellation right
• ✓The five-day period runs from signing or receipt of the public offering statement, whichever is later
• ✓Any attempt to obtain a waiver of the cancellation right is void
• ✓Closing before expiration of the five-day cancellation period is prohibited

Before contract execution, the developer must provide a public offering statement and obtain written acknowledgment of receipt. It must contain a cover page with a summary-nature warning, developer name/address, program description, reservation system details, project information, assessment methods, insurance, escrow disclosures, and a statement that timeshares should be bought for vacation value, not as an investment.

• ✓A public offering statement must be provided before contract execution with written acknowledgment
• ✓The statement must disclose escrow protection of purchaser funds
• ✓A conspicuous statement must warn that a timeshare is for vacation value, not an appreciating investment
• ✓Developers are prohibited from making representations outside the contract and public offering statement

A purchaser may cancel the contract until midnight of the fifth day after the later of signing or receiving the public offering statement and required documents. This right cannot be waived. No closing may occur until the cancellation period expires. Cancellation refunds must be made within 20 days of demand or five days after cleared funds, whichever is later. The developer must establish an escrow account with an independent escrow agent for purchaser funds.

• ✓The five-day right to cancel cannot be waived; waivers are void
• ✓No closing may occur until the cancellation period expires
• ✓Refunds on cancellation must be made within 20 days of demand or five days after cleared funds
• ✓Developers must escrow purchaser funds with an independent escrow agent

Escrowed funds belong to the purchaser, not the developer, and may only be disbursed per statute upon proper affidavits of default or completed performance. The independent escrow agent has a fiduciary duty and must retain affidavits five years. A developer or escrow agent who intentionally fails to comply with escrow requirements is guilty of a Class E felony; failure to establish escrow is prima facie evidence of intentional violation.

• ✓Escrowed timeshare funds belong to the purchaser until proper disbursement conditions are met
• ✓The independent escrow agent has a fiduciary duty and must retain affidavits five years
• ✓Intentional failure to comply with escrow requirements is a Class E felony
• ✓If the cancellation notice is omitted, the buyer may void the transfer and recover funds plus 10% (capped at $3,000)

A timeshare advertisement offering a prize or other inducement must fully comply with Chapter 75 of the General Statutes. No proxy, power of attorney, or similar device given by a timeshare owner regarding voting in a timeshare owners' association may exceed one year, though it may be renewed annually.

• ✓Timeshare ads offering prizes must comply with Chapter 75
• ✓A timeshare owner's voting proxy may not exceed one year in duration
• ✓Proxies may be renewed from year to year

If a purchaser is offered an exchange program, the developer must deliver detailed information before execution of the exchange contract and contract for sale, including the exchange company's name/address, officers/directors, any conflicts of interest, whether participation is voluntary or mandatory, terms and procedures, limitations/restrictions, fees, and independently audited statistics about owners and participating projects.

• ✓Exchange program disclosures must be delivered before executing the exchange contract and sale contract
• ✓Disclosures must state whether participation is voluntary or mandatory
• ✓Exchange program statistics must generally be independently audited by a CPA
• ✓Disclosures must include all limitations, restrictions, and fees of the exchange program