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					    NORTH CAROLINA REAL ESTATE LICENSE LAW
                        Codified as Chapter 93A of the General Statutes of North Carolina

                                                                     93A-23         Subrogation of rights.
                      Article 1.                                     93A-24         Waiver of rights.
                Real Estate Brokers.                                 93A-25         Persons ineligible to recover from fund.
Section                                                              93A-26         Disciplinary action against licensee.
93A-1     License required of real estate brokers.                   93A-27 to      [Reserved]
93A-2     Definitions and exceptions.                                 93A-31
93A-3     Commission created; compensation; organi-
          zation.                                                                           Article 3.
93A-4     Applications for licenses; fees; qualificaions;                          Private Real Estate Schools.
          examinations; privilege licenses; renewal or
          reinstatement of license; power to enforce                                            Article 4.
          provisions.                                                                         Time Shares
93A-4.1   Continuing education.                                      Section
93A-4.2   Broker-in-charge qualification.                             93A-39    Title.
93A-4.3   Elimination of salesperson license; conver-                93A-40    Registration required of time share projects;
          sion of salesperson license to broker licenses.                      real estate salespersons license required.
93A-5     Register of applicants; roster of brokers; finan-           93A-41    Definitions.
          cial report to Secretary of State.                         93A-42    Time shares deemed real estate.
93A-6     Disciplinary action by Commission.                         93A-43    Partition.
93A-6.1   Commission may subpoena witnesses, re-                     93A-44    Public offering statement.
          cords, documents, or other materials.                      93A-45    Purchaser’s right to cancel; escrow; violation.
93A-7     Power of courts to revoke.                                 93A-46    Prizes.
93A-8     Penalty for violation of Chapter.                          93A-47    Time shares proxies.
93A-9     Licensing nonresidents.                                    93A-48    Exchange programs.
93A-10    Nonresident licensees; filing of consent as to              93A-49    Service of process on exchange company.
          service of process and pleadings.
                                                                     93A-50    Securities laws apply.
93A-11    Reimbursement by real estate independent
          contractor of brokers’ workers’ compensation.              93A-51    Rule-making authority.
93A-12    Disputed Monies                                            93A-52    Application for registration of time share project;
                                                                               denial of registration; renewal; reinstatement;
93A-13 to [Reserved.]                                                          and termination of developer’s interest.
93A-15
                                                                     93A-53    Register of applicants; roster of registrants;
                                                                               registered projects; financial report to Secre-
                    Article 2.                                                 tary of State.
           Real Estate Recovery Fund.                                93A-54    Disciplinary action by Commission.
Section                                                              93A-55    Private enforcement.
93A-16      Real Estate Recovery Fund created; payment               93A-56    Penalty for violation of Article.
            to fund; management.
                                                                     93A-57    Release of liens.
93A-17      Grounds for payment; notice and application
            to Commission.                                           93A-58    Registrar required; criminal penalties; project
                                                                               broker.
93A-18      Hearing; required showing.
                                                                     93A-59    Preservation of time share purchaser’s claims
93A-19      Response and defense by Commission and                             and defenses.
            judgment debtor; proof of conversion.
                                                                     93A-60 to [Reserved]
93A-20      Order directing payment out of fund; com-                93A-69
            promise of claims.
93A-21      Limitations; pro rata distribution; attorney                                     Article 5.
            fees.                                                                     Real Estate Appraisers.
93A-22      Repayment to fund; automatic suspension of                                      [Repealed]
            license.

       Please note: Certain “gender neutral” terms used in the Real Estate License Law as reprinted in
    this booklet are subject to final revision by the Revisor of Statutes.

                                    North Carolina Real Estate License Law and Commission Rules                                  1
                                                 Real Estate License Law
                       [Codified as Chapter 93A of the General Statutes of North Carolina]

                      ARTICLE 1.                                                (1) Any person, partnership, corporation, limited liabil-
                REAL ESTATE BROKERS.                                                ity company, association, or other business entity
                                                                                    who, as owner or lessor, shall perform any of the acts
93A-1. License required of real estate brokers.                                     aforesaid with reference to property owned or leased
From and after July 1, 1957, it shall be unlawful for any per-                      by them, where the acts are performed in the regular
son, partnership, corporation, limited liability company, as-                       course of or as incident to the management of that
sociation, or other business entity in this State to act as a real                  property and the investment therein.
estate broker, or directly or indirectly to engage or assume                    (2) Any person acting as an attorney-in-fact under a duly
to engage in the business of real estate broker or to adver-                        executed power of attorney from the owner autho-
tise or hold himself or herself or themselves out as engaging                       rizing the final consummation of performance of
in or conducting such business without first obtaining a li-                         any contract for the sale, lease or exchange of real
cense issued by the North Carolina Real Estate Commission                           estate.
(hereinafter referred to as the Commission), under the pro-                     (3) The acts or services of an attorney-at-law.
visions of this Chapter. A license shall be obtained from the                   (4) Any person, while acting as a receiver, trustee in
Commission even if the person, partnership, corporation,                            bankruptcy, guardian, administrator or executor or
limited liability company, association, or business entity is                       any person acting under order of any court.
licensed in another state and is affiliated or otherwise associ-                  (5) Any person, while acting as a trustee under a trust
ated with a licensed real estate broker in this State.                              agreement, deed of trust or will, or his or her regular
                                                                                    salaried employees.
93A-2. Definitions and exceptions.                                              (6) Any salaried person employed by a licensed real es-
(a) A real estate broker within the meaning of this Chapter                         tate broker, for and on behalf of the owner of any
     is any person, partnership, corporation, limited liabil-                       real estate or the improvements thereon, which the
     ity company, association, or other business entity who                         licensed broker has contracted to manage for the
     for a compensation or valuable consideration or prom-                          owner, if the salaried employee is limited in his or
     ise thereof lists or offers to list, sells or offers to sell, buys               her employment to: exhibiting units on the real es-
     or offers to buy, auctions or offers to auction (specifical-                      tate to prospective tenants; providing the prospec-
     ly not including a mere crier of sales), or negotiates the                     tive tenants with information about the lease of the
     purchase or sale or exchange of real estate, or who leas-                      units; accepting applications for lease of the units;
     es or offers to lease, or who sells or offers to sell leases of                  completing and executing preprinted form leases;
     whatever character, or rents or offers to rent any real es-                     and accepting security deposits and rental payments
     tate or the improvement thereon, for others.                                   for the units only when the deposits and rental pay-
(a1) The term broker-in-charge within the meaning of this                           ments are made payable to the owner or the bro-
     Chapter shall mean a real estate broker who has been                           ker employed by the owner. The salaried employ-
     designated as the broker having responsibility for the                         ee shall not negotiate the amount of security depos-
     supervision of real estate salespersons engaged in real                        its or rental payments and shall not negotiate leases
     estate brokerage at a particular real estate office and                          or any rental agreements on behalf of the owner or
     for other administrative and supervisory duties as the                         broker.
     Commission shall prescribe by rule.                                        (7) Any owner who personally leases or sells his or her
(a2) The term provisional broker within the meaning of this                         own property.
     Chapter means a real estate broker who, pending ac-                        (8) Any housing authority organized in accordance with
     quisition and documentation to the Commission of                               the provisions of Chapter 157 of the General Stat-
     the education or experience prescribed by either G.S.                          utes and any regular salaried employees of the hous-
     93A-4(a1) or G.S. 93A-4.3, must be supervised by a                             ing authority when performing acts authorized in
     broker-in-charge when performing any act for which a                           this Chapter as to any property owned or leased by
     real estate license is required.                                               the housing authority. This exception shall not ap-
(b) The term real estate salesperson within the meaning of                          ply to any person, partnership, corporation, limited
     this Chapter shall mean and include any person who                             liability company, association, or other business en-
     was formerly licensed by the Commission as a real es-                          tity that contracts with a housing authority to sell
     tate salesperson before April 1, 2006.                                         or manage property owned or leased by the hous-
(c) The provisions of this Chapter shall not apply to and                           ing authority.
     shall not include:

2                                         North Carolina Real Estate License Law and Commission Rules
93A-3. Commission created; compensation;                                     with the provisions of this Chapter and the General
         organization.                                                       Statutes; provided, however, the Commission shall not
(a) There is hereby created the North Carolina Real Es-                      make rules or regulations regulating commissions, sala-
     tate Commission, hereinafter called the Commission.                     ries, or fees to be charged by licensees under this Chap-
     The Commission shall consist of nine members, sev-                      ter.
     en members to be appointed by the Governor, one                    (c1) The provisions of G.S. 93A-1 and G.S. 93A-2 notwith-
     member to be appointed by the General Assembly                          standing, the Commission may adopt rules to permit a
     upon the recommendation of the President Pro Tem-                       real estate broker to pay a fee or other valuable consider-
     pore of the Senate in accordance with G.S. 120-121,                     ation to a travel agent for the introduction or procure-
     and one member to be appointed by the General As-                       ment of tenants or potential tenants in vacation rent-
     sembly upon the recommendation of the Speaker of                        als as defined in G.S. 42A-4. Rules adopted pursuant
     the House of Representatives in accordance with G.S.                    to this subsection may include a definition of the term
     120-121. At least three members of the Commission                       ‘travel agent’, may regulate the conduct of permitted
     shall be licensed real estate brokers. At least two mem-                transations, and may limit the amount of the fee or the
     bers of the Commission shall be persons who are not                     value of the consideration that may be paid to the trav-
     involved directly or indirectly in the real estate or real              el agent. However, the Commission may not authorize
     estate appraisal business. Members of the Commission                    a person or entity not licensed as a broker to negotiate
     shall serve three-year terms so staggered that the terms                any real estate transaction on behalf of another.
     of three members expire in one year, the terms of three            (c2) The Commission shall adopt a seal for its use, which
     members expire in the next year, and the terms of three                 shall bear thereon the words “North Carolina Real Es-
     members expire in the third year of each three-year pe-                 tate Commission.” Copies of all records and papers
     riod. The members of the Commission shall elect one                     in the office of the Commission duly certified and au-
     of their members to serve as chairman of the Commis-                    thenticated by the seal of the Commission shall be re-
     sion for a term of one year. The Governor may re-                       ceived in evidence in all courts and with like effect as
     move any member of the Commission for misconduct,                       the originals.
     incompetency, or willful neglect of duty. The Gover-               (d) The Commission may employ an Executive Director
     nor shall have the power to fill all vacancies occurring                 and professional and clerical staff as may be necessary
     on the Commission, except vacancies in legislative ap-                  to carry out the provisions of this Chapter and to put
     pointments shall be filled under G.S. 120-122.                           into effect the rules and regulations that the Commis-
(b) The provisions of G.S. 93B-5 notwithstanding, members                    sion may promulgate. The Commission shall fix salaries
     of the Commission shall receive as compensation for each                and shall require employees to make good and sufficient
     day spent on work for the Commission a per diem in                      surety bond for the faithful performance of their duties.
     an amount established by the Commission by rule, and                    The Commission shall reimburse its employees for trav-
     mileage reimbursement for transportation by private-                    el on official business. Mileage expenses for transporta-
     ly owned automobile at the business standard mileage                    tion by privately owned automobile shall be reimbursed
     rate set by the Internal Revenue Service per mile of trav-              at the business standard mileage set by the Internal Rev-
     el along with actual cost of tolls paid. The total expense              enue Service per mile of travel along with the actual tolls
     of the administration of this Chapter shall not exceed the              paid. Other travel expenses shall be reimbursed in accor-
     total income therefrom; and none of the expenses of said                dance with G.S. 138-6. The Commission may, when it
     Commission or the compensation or expenses of any of-                   deems it necessary or convenient, delegate to the Execu-
     fice thereof or any employee shall ever be paid or pay-                  tive Director, legal counsel for the Commission, or oth-
     able out of the treasury of the State of North Carolina;                er Commission staff, professional or clerical, the Com-
     and neither the Commission nor any officer or employee                    mission’s authority and duties under this Chapter, but
     thereof shall have any power or authority to make or in-                the Commission may not delegate its authority to make
     cur any expense, debt or other financial obligation bind-                rules or its duty to act as a hearing panel in accordance
     ing upon the State of North Carolina. After all expenses                with the provisions of G.S. 150B-40(b).
     of operation, the Commission may set aside an expense              (e) The Commission shall be entitled to the services of the
     reserve each year. The Commission may deposit moneys                    Attorney General of North Carolina, in connection
     in accounts, certificates of deposit, or time deposits as the            with the affairs of the Commission or may on approval
     Commission may approve, in any bank, savings and loan                   of the Attorney General, employ an attorney to assist
     association, or trust company. Moneys also may be in-                   or represent it in the enforcement of this Chapter, as to
     vested in the same classes of securities referenced in G.S.             specific matters, but the fee paid for such service shall
     159-30(c).                                                              be approved by the Attorney General. The Commis-
(c) The Commission shall have power to make reasonable                       sion may prefer a complaint for violation of this Chap-
     bylaws, rules and regulations that are not inconsistent                 ter before any court of competent jurisdiction, and it
                                        North Carolina Real Estate License Law and Commission Rules                                   3
     may take the necessary legal steps through the proper                   tion program consisting of 90 hours of classroom in-
     legal offices of the State to enforce the provisions of this              struction in subjects determined by the Commission
     Chapter and collect the penalties provided therein.                     or shall possess real estate education or experience in
(f ) The Commission is authorized to acquire, hold, convey,                  real estate transactions which the Commission shall
     rent, encumber, alienate, and otherwise deal with real                  find equivalent to the education program. The Com-
     property in the same manner as a private person or cor-                 mission may, by rule, establish a schedule for comple-
     poration, subject only to the approval of the Governor                  tion of the prescribed postlicensing education that re-
     and Council of State. The rents, proceeds, and other                    quires provisional brokers to complete portions of the
     revenues and benefits of the ownership of real property                  90-hour postlicensing education program in less than
     shall inure to the Commission. Collateral pledged by                    three years, and provisional brokers must comply with
     the Commission for any encumbrance of real property                     this schedule in order to be entitled to actively engage
     shall be limited to the assets, income, and revenues of                 in real estate brokerage. Upon completion of the postli-
     the Commission. Leases, deeds, and other instruments                    censing education program, the provisional status of
     relating to the Commission’s interest in real property                  the broker’s license shall be terminated. When a provi-
     shall be valid when executed by the executive director                  sional broker fails to complete all 90 hours of required
     of the Commission. The Commission may create and                        postlicensing education within three years following
     conduct education and information programs relating                     initial licensure, the broker’s license shall be cancelled,
     to the real estate business for the information, educa-                 and the Commission may, in its discretion, require the
     tion, guidance and protection of the general public, li-                person whose license was cancelled to satisfy the postli-
     censees, and applicants for license. The education and                  censing education program and the requirements for
     information programs may include preparation, print-                    original licensure prescribed in this Chapter as a con-
     ing and distribution of publications and articles and                   dition of license reinstatement, including the exami-
     the conduct of conferences, seminars, and lectures. The                 nation requirements and the license reinstatement fee
     Commission may claim the copyright to written ma-                       prescribed by subsection (c) of this section.
     terials it creates and may charge fees for publications            (a2) An approved school shall pay a fee of ten dollars
     and programs.                                                           ($10.00) per licensee to the Commission for each li-
                                                                             censee completing a postlicensing education course
93A-4. Applications for licenses; fees; qualifications;                      conducted by the school, provided that these fees shall
        examinations; privilege licenses; renewal or                         not be charged to a community college, junior col-
        reinstatement of license; power to enforce                           lege, college, or university located in this State and ac-
        provisions.                                                          credited by the Southern Association of Colleges and
(a) Any person, partnership, corporation, limited liability                  Schools.
     company, association, or other business entity hereafter           (b) Except as otherwise provided in this Chapter, any per-
     desiring to enter into business of and obtain a license                 son who submits an application to the Commission in
     as a real estate broker shall make written application                  proper manner for a license as real estate broker shall
     for such license to the Commission in the form and                      be required to take an examination. The examination
     manner prescribed by the Commission. Each appli-                        may be administered orally, by computer, or by any
     cant for a license as a real estate broker shall be at least            other method the Commission deems appropriate. The
     18 years of age. Each applicant for a license as a real es-             Commission may require the applicant to pay the Com-
     tate broker shall, within three years preceding the date                mission or a provider contracted by the Commission the
     the application is made, have satisfactorily completed,                 actual cost of the examination and its administration.
     at a school approved by the Commission, an educa-                       The cost of the examination and its administration shall
     tion program consisting of at least 75 hours of class-                  be in addition to any other fees the applicant is required
     room instruction in subjects determined by the Com-                     to pay under subsection (a) of this section. The exam-
     mission, or shall possess real estate education or experi-              ination shall determine the applicant’s qualifications
     ence in real estate transactions which the Commission                   with due regard to the paramount interests of the pub-
     shall find equivalent to the education program. Each                     lic as to the applicant’s competency. A person who fails
     applicant for a license as a real estate broker shall be re-            the license examination shall be entitled to know the re-
     quired to pay a fee, fixed by the Commission but not                     sult and score. A person who passes the exam shall be
     to exceed thirty dollars ($30.00).                                      notified only that the person passed the examination.
(a1) Each person who is issued a real estate broker license                  Whether a person passed or failed the examination shall
     on or after April 1, 2006, shall initially be classified as a            be a matter of public record; however, the scores for li-
     provisional broker and shall, within three years follow-                cense examinations shall not be considered public re-
     ing initial licensure, satisfactorily complete, at a school             cords. Nothing in this subsection shall limit the rights
     approved by the Commission, a postlicensing educa-                      granted to any person under G.S. 93B-8.

4                                       North Carolina Real Estate License Law and Commission Rules
     An applicant for licensure under this Chapter shall sat-               cords authorized by this subsection.
     isfy the Commission that he or she possesses the compe-            (c) All licenses issued by the Commission under the pro-
     tency, honesty, truthfulness, integrity, and general mor-              visions of this Chapter shall expire on the 30th day of
     al character necessary to protect the public interest and              June following issuance or on any other date that the
     promote public confidence in the real estate brokerage                  Commission may determine and shall become invalid
     business. The Commission may investigate the moral                     after that date unless reinstated. A license may be re-
     character of each applicant for licensure and require an               newed 45 days prior to the expiration date by filing an
     applicant to provide the Commission with a criminal                    application with and paying to the Executive Director
     record report. All applicants shall obtain criminal re-                of the Commission the license renewal fee. The license
     cord reports from one or more reporting services des-                  renewal fee is thirty dollars ($30.00) unless the Com-
     ignated by the Commission to provide criminal record                   mission sets the fee at a higher amount. The Commis-
     reports. Applicants are required to pay the designated                 sion may set the license renewal fee at an amount that
     reporting service for the cost of these reports. If the re-            does not exceed fifty dollars ($50.00). The license re-
     sults of any required competency examination and in-                   newal fee may not increase by more than five dollars
     vestigation of the applicant’s moral character shall be                ($5.00) during a 12-month period. The Commission
     satisfactory to the Commission, then the Commission                    may adopt rules establishing a system of license renew-
     shall issue to the applicant a license, authorizing the ap-            al in which the licenses expire annually with varying
     plicant to act as a real estate broker in the State of North           expiration dates. These rules shall provide for prorat-
     Carolina, upon the payment of privilege taxes now re-                  ing the annual fee to cover the initial renewal period
     quired by law or that may hereafter be required by law.                so that no licensee shall be charged an amount greater
     Notwithstanding G.S. 150B-38(c), in a contested case                   than the annual fee for any 12-month period. The fee
     commenced upon the request of a party applying for                     for reinstatement of an expired license shall be fifty-
     licensure regarding the question of the moral charac-                  five dollars ($55.00). In the event a licensee fails to ob-
     ter or fitness of the applicant, if notice has been reason-             tain a reinstatement of such license within six months
     ably attempted, but cannot be given to the applicant                   after the expiration date thereof, the Commission may,
     personally or by certified mail in accordance with G.S.                 in its discretion, consider such person as not having
     150B-38(c), the notice of hearing shall be deemed giv-                 been previously licensed, and thereby subject to the
     en to the applicant when a copy of the notice is depos-                provisions of this Chapter relating to the issuance of
     ited in an official depository of the United States Postal               an original license, including the examination require-
     Service addressed to the applicant at the latest mailing               ments set forth herein. Duplicate licenses may be is-
     address provided by the applicant to the Commission                    sued by the Commission upon payment of a fee of five
     or by any other means reasonably designed to achieve                   dollars ($5.00) by the licensee. Commission certifica-
     actual notice to the applicant.                                        tion of a licensee’s license history shall be made only af-
(b1) The Department of Justice may provide a criminal re-                   ter the payment of a fee of ten dollars ($10.00).
     cord check to the Commission for a person who has ap-              (d) The Commission is expressly vested with the power
     plied for a license through the Commission. The Com-                   and authority to make and enforce any and all reason-
     mission shall provide to the Department of Justice,                    able rules and regulations connected with license ap-
     along with the request, the fingerprints of the applicant,              plication, examination, renewal, and reinstatement as
     any additional information required by the Department                  shall be deemed necessary to administer and enforce
     of Justice, and a form signed by the applicant consent-                the provisions of this Chapter. The Commission is
     ing to the check of the criminal record and to the use of              further authorized to adopt reasonable rules and regu-
     the fingerprints and other identifying information re-                  lations necessary for the approval of real estate schools,
     quired by the State or national repositories. The appli-               instructors, and textbooks and rules that prescribe spe-
     cant’s fingerprints shall be forwarded to the State Bu-                 cific requirements pertaining to instruction, adminis-
     reau of Investigation for a search of the State’s criminal             tration, and content of required education courses and
     history record file, and the State Bureau of Investiga-                 programs.
     tion shall forward a set of the fingerprints to the Federal         (e) Nothing contained in this Chapter shall be construed
     Bureau of Investigation for a national criminal history                as giving any authority to the Commission nor any li-
     check. The Commission shall keep all information pur-                  censee of the Commission as authorizing any licens-
     suant to this subsection privileged, in accordance with                ee to engage in the practice of law or to render any le-
     applicable State law and federal guidelines, and the in-               gal service as specifically set out in G.S. 84-2.1 or any
     formation shall be confidential and shall not be a public               other legal service not specifically referred to in said
     record under Chapter 132 of the General Statutes.                      section.
      The Department of Justice may charge each applicant
     a fee for conducting the checks of criminal history re-
                                        North Carolina Real Estate License Law and Commission Rules                                  5
93A-4.1. Continuing education.                                           college, junior college, college, or university located in
(a) The Commission shall establish a program of continu-                 this State and accredited by the Southern Association
     ing education for real estate brokers. An individual li-            of Colleges and Schools.
     censed as a real estate broker is required to complete          (e) The Commission may award continuing education
     continuing education requirements in an amount not                  credit for an unapproved course or related education-
     to exceed eight classroom hours of instruction a year               al activity. The Commission may prescribe procedures
     during any license renewal period in subjects and at                for a licensee to submit information on an unapproved
     times the Commission deems appropriate. Any licens-                 course or related educational activity for continuing
     ee who fails to complete continuing education require-              education credit. The Commission may charge a fee
     ments pursuant to this section shall not actively engage            to the licensee for each course or activity submitted.
     in the business of real estate broker.                              The fee shall not exceed fifty dollars ($50.00).
(a1) The Commission may, as part of the broker continu-
     ing education requirements, require real estate bro-            93A-4.2. Broker-in-charge qualification.
     kers-in-charge to complete during each annual license           To be qualified to serve as a broker-in-charge of a real es-
     period a special continuing education course consist-           tate office, a real estate broker shall possess at least two years
     ing of not more than four classroom hours of instruc-           of full-time real estate brokerage experience or equivalent
     tion in subjects prescribed by the Commission.                  part-time real estate brokerage experience within the previ-
(b) The Commission shall establish procedures allowing               ous five years or real estate education or experience in real
     for a deferral of continuing education for brokers while        estate transactions that the Commission finds equivalent
     they are not actively engaged in real estate brokerage.         to such experience and shall complete, within a time pre-
(c) The Commission may adopt any reasonable rules not                scribed by the Commission, a course of study prescribed
     inconsistent with this Chapter to give purpose and ef-          by the Commission for brokers-in-charge not to exceed 12
     fect to the continuing education requirement, includ-           classroom hours of instruction. A provisional broker may
     ing rules that govern:                                          not be designated as a broker-in-charge.
     (1) The content and subject matter of continuing ed-
           ucation courses.                                          93A-4.3. Elimination of salesperson license; conversion
     (2) The curriculum of courses required.                                 of salesperson licenses to broker licenses.
     (3) The criteria, standards, and procedures for the ap-         (a) Effective April 1, 2006, the Commission shall discon-
           proval of courses, course sponsors, and course in-            tinue issuing real estate salesperson licenses. Also effec-
           structors.                                                    tive April 1, 2006, all salesperson licenses shall become
     (4) The methods of instruction.                                     broker licenses, and each person holding a broker li-
     (5) The computation of course credit.                               cense that was changed from salesperson to broker on
     (6) The ability to carry forward course credit from one             that date shall be classified as a provisional broker as
           year to another.                                              defined in G.S. 93A-2(a2).
     (7) The deferral of continuing education for brokers            (b) A provisional broker as contemplated in subsection (a)
           and salespersons not engaged in brokerage.                    of this section who was issued a salesperson license prior
     (8) The waiver of or variance from the continuing edu-              to October 1, 2005, shall, not later than April 1, 2008,
           cation requirement for hardship or other reasons.             complete a broker transition course prescribed by the
     (9) The procedures for compliance and sanctions for                 Commission, not to exceed 24 classroom hours of in-
           noncompliance.                                                struction, or shall demonstrate to the Commission that
(d) The Commission may establish a nonrefundable course                  he or she possesses four years’ full-time real estate broker-
     application fee to be charged to a course sponsor for               age experience or equivalent part-time real estate broker-
     the review and approval of a proposed continuing ed-                age experience within the previous six years. If the provi-
     ucation course. The fee shall not exceed one hundred                sional broker satisfies this requirement by April 1, 2008,
     twenty-five dollars ($125.00) per course. The Com-                   the provisional status of his or her broker license will be
     mission may charge the sponsor of an approved course                terminated, and the broker will not be required to com-
     a nonrefundable fee not to exceed seventy-five dollars               plete the 90-classroom-hour broker postlicensing educa-
     ($75.00) for the annual renewal of course approval.                 tion program prescribed by G.S. 93A-4(a1). If the provi-
     An approved course sponsor shall pay a fee of ten dol-              sional broker fails to satisfy this requirement by April 1,
     lars ($10.00) per licensee to the Commission for each               2008, his or her license will be placed on inactive status,
     licensee completing an approved continuing education                if not already on inactive status, and he or she must com-
     course conducted by the sponsor.                                    plete the 90-classroom-hour broker postlicensing educa-
     The Commission shall not charge a course application                tion program prescribed by G.S. 93A-4(a1) in order to
     fee, a course renewal fee, or any other fee for a con-              terminate the provisional status of the broker license and
     tinuing education course sponsored by a community                   to be eligible to return his or her license to active status.

6                                    North Carolina Real Estate License Law and Commission Rules
(c) An approved school or sponsor shall pay a fee of ten dol-                business of all licensed real estate brokers, which roster
      lars ($10.00) per licensee to the Commission for each                  shall be kept on file in the office of the Commission and
      licensee completing a broker transition course con-                    be open to public inspection.
      ducted by the school or sponsor, provided that these               (c) On or before the first day of September of each year, the
      fees shall not be charged to a community college, ju-                  Commission shall file with the Secretary of State a copy
      nior college, college, or university located in this State             of the roster of real estate brokers holding certificates of
      and accredited by the Southern Association of Colleg-                  license, and at the same time shall also file with the Sec-
      es and Schools.                                                        retary of State a report containing a complete statement
(d) A provisional broker as contemplated in subsection (a)                   of receipts and disbursements of the Commission for
      of this section, who was issued a salesperson license be-              the preceding fiscal year ending June 30 attested by the
      tween October 1, 2005, and March 31, 2006, shall,                      affidavit of the Executive Director of the Commission.
      not later than April 1, 2009, satisfy the requirements of
      G.S. 93A-4(a1). Upon satisfaction of the requirements              93A-6. Disciplinary action by Commission.
      of G.S. 93A-4(a1), the provisional status of the bro-              (a) The Commission has the power to take disciplinary action.
      ker’s license will be terminated. If the provisional bro-              Upon its own initiative, or on the complaint of any person,
      ker fails to satisfy the requirements of G.S. 93A-4(a1)                the Commission may investigate the actions of any person
      by April 1, 2009, the broker’s license shall be cancelled,             or entity licensed under this Chapter, or any other person
      and the person will be subject to the requirements for                 or entity who shall assume to act in such capacity. If the
      licensure reinstatement prescribed by G.S. 93A-4(a1).                  Commission finds probable cause that a licensee has violat-
(e) A broker who was issued a broker license prior to April                  ed any of the provisions of this Chapter, the Commission
      1, 2006, shall not be required to complete either the                  may hold a hearing on the allegations of misconduct.
      90-classroom-hour broker postlicensing education pro-                  The Commission has the power to suspend or revoke
      gram prescribed by G.S. 93A-4(a1) or the broker transi-                at any time a license issued under the provisions of this
      tion course prescribed by subsection (b) of this section.              Chapter, or to reprimand or censure any licensee, if, fol-
(f ) For the purpose of determining a licensee’s status, rights,             lowing a hearing, the Commission adjudges the licensee
      and obligations under this section, the Commission                     to be guilty of:
      may treat a person who is issued a license on or after the             (1) Making any willful or negligent misrepresentation
      October 1, 2005, or April 1, 2006, dates cited in subsec-                   or any willful or negligent omission of material
      tions (a), (b), (d), or (e) of this section as though the per-              fact.
      son had been issued a license prior to those dates if the              (2) Making any false promises of a character likely to
      only reason the person’s license was not issued prior to                    influence, persuade, or induce.
      those dates was that the person’s application was pend-                (3) Pursuing a course of misrepresentation or mak-
      ing a determination by the Commission as to whether                         ing of false promises through agents, advertising or
      the applicant possessed the requisite moral character for                   otherwise.
      licensure. If a license application is pending on April 1,             (4) Acting for more than one party in a transaction
      2006, for any reason other than a determination by the                      without the knowledge of all parties for whom
      Commission as to the applicant’s moral character for li-                    he or she acts.
      censure, and if the applicant has not satisfied all educa-              (5) Accepting a commission or valuable consider-
      tion and examination requirements for licensing in ef-                      ation as a real estate salesperson for the perfor-
      fect on April 1, 2006, the applicant’s application shall                    mance of any of the acts specified in this Article
      be cancelled and the application fee refunded.                              or Article 4 of this Chapter, from any person ex-
(g) No applications for a real estate salesperson license shall                   cept his or her broker-in-charge or licensed bro-
      be accepted by the Commission between September 1,                          ker by whom he or she is employed.
      2005, and September 30, 2005.                                          (6) Representing or attempting to represent a real es-
                                                                                  tate broker other than the broker by whom he or
93A-5. Register of applicants; roster of brokers; financial                       she is engaged or associated, without the express
        report to Secretary of State.                                             knowledge and consent of the broker with whom
(a) The Executive Director of the Commission shall keep a                         he or she is associated.
     register of all applicants for license, showing for each                (7) Failing, within a reasonable time, to account for
     the date of application, name, place of residence, and                       or to remit any moneys coming into his or her
     whether the license was granted or refused. Said regis-                      possession which belong to others.
     ter shall be prima facie evidence of all matters record-                (8) Being unworthy or incompetent to act as a real
     ed therein.                                                                  estate broker in a manner as to endanger the in-
(b) The Executive Director of the Commission shall also                           terest of the public.
     keep a current roster showing the names and places of                   (9) Paying a commission or valuable consideration to
                                         North Carolina Real Estate License Law and Commission Rules                                  7
          any person for acts or services performed in vio-                         pitude which would reasonably affect the licens-
          lation of this Chapter.                                                   ee’s performance in the real estate business;
    (10) Any other conduct which constitutes improper,                        (3) The licensee has violated any of the provisions of
          fraudulent or dishonest dealing.                                          G.S. 93A-6(a) when selling, leasing, or buying his
    (11) Performing or undertaking to perform any legal                             or her own property;
          service, as set forth in G.S. 84-2.1, or any other                  (4) The broker’s unlicensed employee, who is ex-
          acts constituting the practice of law.                                    empt from the provisions of this Chapter under
    (12) Commingling the money or other property of                                 G.S. 93A-2(c)(6), has committed, in the regu-
          his or her principals with his or her own or failure                      lar course of business, any act which, if commit-
          to maintain and deposit in a trust or escrow ac-                          ted by the broker, would constitute a violation of
          count in an insured bank or savings and loan as-                          G.S. 93A-6(a) for which the broker could be dis-
          sociation in North Carolina all money received by                         ciplined; or
          him or her as a real estate licensee acting in that                 (5) The licensee, who is also a State-licensed or
          capacity, or an escrow agent, or the custodian or                         State-certified real estate appraiser pursuant to
          manager of the funds of another person or enti-                           Chapter 93E of the General Statutes, has violat-
          ty which relate to or concern that person’s or en-                        ed any provisions of Chapter 93E of the General
          tity’s interest or investment in real property, pro-                      Statutes and has been reprimanded or has had his
          vided, these accounts shall not bear interest unless                      or her appraiser license or certificate suspended or
          the principals authorize in writing the deposit be                        revoked by the Appraisal Board.
          made in an interest bearing account and also pro-            (c)    The Commission may appear in its own name in supe-
          vide for the disbursement of the interest accrued.                  rior court in actions for injunctive relief to prevent any
    (13) Failing to deliver, within a reasonable time, a                      person from violating the provisions of this Chapter or
          completed copy of any purchase agreement or of-                     rules promulgated by the Commission. The superior
          fer to buy and sell real estate to the buyer and to                 court shall have the power to grant these injunctions
          the seller.                                                         even if criminal prosecution has been or may be insti-
    (14) Failing, at the time the transaction is consum-                      tuted as a result of the violations, or whether the per-
          mated, to deliver to the seller in every real estate                son is a licensee of the Commission.
          transaction, a complete detailed closing statement           (d)    Each broker shall maintain complete records showing
          showing all of the receipts and disbursements han-                  the deposit, maintenance, and withdrawal of mon-
          dled by him or her for the seller or failing to deliv-              ey or other property owned by his or her principals
          er to the buyer a complete statement showing all                    or held in escrow or in trust for his or her principals.
          money received in the transaction from the buyer                    The Commission may inspect these records periodical-
          and how and for what it was disbursed.                              ly, without prior notice and may also inspect these re-
    (15) Violating any rule or regulation promulgated by                      cords whenever the Commission determines that they
          the Commission.                                                     are pertinent to an investigation of any specific com-
    The Executive Director shall transmit a certified copy                     plaint against a licensee.
    of all final orders of the Commission suspending or re-             (e)    When a person or entity licensed under this Chapter
    voking licenses issued under this Chapter to the clerk                    is accused of any act, omission, or misconduct which
    of superior court of the county in which the licensee                     would subject the licensee to disciplinary action, the
    maintains his or her principal place of business. The                     licensee, with the consent and approval of the Com-
    clerk shall enter these orders upon the judgment dock-                    mission, may surrender his or her or its license and all
    et of the county.                                                         the rights and privileges pertaining to it for a period of
(b) Following a hearing, the Commission shall also have                       time established by the Commission. A person or en-
    power to suspend or revoke any license issued under                       tity who surrenders his or her or its license shall not
    the provisions of this Chapter or to reprimand or cen-                    thereafter be eligible for or submit any application for
    sure any licensee when:                                                   licensure as a real estate broker or salesperson during
    (1) The licensee has obtained a license by false or fraud-                the period of license surrender.
          ulent representation;                                        (f )   In any contested case in which the Commission takes
    (2) The licensee has been convicted or has entered a                      disciplinary action authorized by any provision of this
          plea of guilty or no contest upon which final judg-                  Chapter, the Commission may also impose reasonable
          ment is entered by a court of competent jurisdic-                   conditions, restrictions, and limitations upon the li-
          tion in this State, or any other state, of the crim-                cense, registration, or approval issued to the disciplined
          inal offenses of: embezzlement, obtaining money                      person or entity. In any contested case concerning an
          under false pretense, fraud, forgery, conspiracy to                 application for licensure, time share project registration,
          defraud, or any other offense involving moral tur-                   or school, sponsor, instructor, or course approval, the

8                                      North Carolina Real Estate License Law and Commission Rules
     Commission may impose reasonable conditions, restric-             claim against such licensee in any court of record in this State
     tions, and limitations on any license, registration, or ap-       and shall recover judgment thereon, such court may as part
     proval it may issue as a part of its final decision.               of its judgment or decree in such case, if it deem it a proper
                                                                       case in which so to do, order a written copy of the transcript
93A-6.1. Commission may subpoena witnesses, records,                   of record in said case to be forwarded by the clerk of court to
          documents, or other materials.                               the chairman of the said Commission with a recommenda-
(a) The Commission, Executive Director, or other repre-                tion that the licensee’s certificate of license be revoked.
    sentative designated by the Commission may issue a
    subpoena for the appearance of witnesses deemed nec-               93A-8. Penalty for violation of Chapter.
    essary to testify concerning any matter to be heard be-            Any person violating the provisions of this Chapter shall
    fore or investigated by the Commission. The Com-                   upon conviction thereof be deemed guilty of a Class 1 mis-
    mission may issue a subpoena ordering any person                   demeanor.
    in possession of records, documents, or other materi-
    als, however maintained, that concern any matter to                93A-9. Licensing nonresidents.
    be heard before or investigated by the Commission to               (a) An applicant from another state, which offers licens-
    produce the records, documents, or other materials for                 ing privileges to residents of North Carolina, may be
    inspection or deliver the same into the custody of the                 licensed by conforming to all the provisions of this
    Commission’s authorized representatives. Upon writ-                    Chapter and, in the discretion of the Commission, such
    ten request, the Commission shall revoke a subpoena                    other terms and conditions as are required of North
    if it finds that the evidence, the production of which is               Carolina residents applying for license in such other
    required, does not relate to a matter in issue, or if the              state; provided that the Commission may exempt from
    subpoena does not describe with sufficient particulari-                  the examination prescribed in G.S. 93A-4 a broker or
    ty the evidence, the production of which is required, or               salesperson duly licensed in another state if a similar
    if for any other reason in law the subpoena is invalid. If             exemption is extended to licensed brokers from North
    any person shall fail to fully and promptly comply with                Carolina. A license applicant who has been a resident
    a subpoena issued under this section, the Commission                   of North Carolina for not more than 90 days may be
    may apply to any judge of the superior court resident                  considered by the Commission as a nonresident for the
    in any county where the person to whom the subpoena                    purposes of this subsection.
    is issued maintains a residence or place of business for           (b) The Commission may issue a limited broker’s license to
    an order compelling the person to show cause why he                    a person or an entity from another state or territory of
    or she should not be held in contempt of the Commis-                   the United States without regard to whether that state
    sion and its processes. The court shall have the power                 or territory offers similar licensing privileges to residents
    to impose punishment for acts that would constitute                    in North Carolina if the person or entity satisfies all of
    direct or indirect contempt if the acts occurred in an                 the following:
    action pending in superior court.                                      (1) Is of good moral character and licensed as a real es-
(b) The Commission shall be exempt from the require-                             tate broker or salesperson in good standing in an-
    ments of Chapter 53B of the General Statutes with re-                        other state or territory of the United States.
    gard to subpoenas issued to compel the production of a                 (2) Only engages in business as a real estate broker in
    licensee’s trust account records held by any financial in-                    North Carolina in transactions involving com-
    stitution. Notwithstanding that exemption, the Com-                          mercial real estate and while the person or enti-
    mission shall serve, pursuant to G.S. 1A-1, Rule 4(j) of                     ty is affiliated with a resident North Carolina real
    the N.C. Rules of Civil Procedure or by certified mail                        estate broker.
    to the licensee’s last known address, a copy of the sub-               (3) Complies with the laws of this State regulating real
    poena and notice that the subpoena has been served                           estate brokers and rules adopted by the Commis-
    upon the financial institution. Service of the subpoe-                        sion.
    na and notice on the licensee shall be made within 10                  The Commission may require an applicant for licen-
    days following service of the subpoena on the financial                 sure under this subsection to pay a fee not to exceed
    institution holding the trust account records.                         three hundred dollars ($300.00). All licenses issued
                                                                           under this subsection shall expire on June 30 of each
93A-7. Power of courts to revoke.                                          year following issuance or on a date that the Commis-
Whenever any person, partnership, association or corpora-                  sion deems appropriate unless the license is renewed
tion claiming to have been injured or damaged by the gross                 pursuant to the requirements of G.S. 93A-4. A person
negligence, incompetency, fraud, dishonesty or misconduct                  or entity licensed under this subsection may be disci-
on the part of any licensee following the calling or engaging              plined by the Commission for violations of this Chap-
in the business herein described and shall file suit upon such              ter as provided in G.S. 93A-6 and G.S. 93A-54.
                                       North Carolina Real Estate License Law and Commission Rules                                   9
     Any person or entity licensed under this subsection                      contractor of brokers’ workers’ compensation.
     shall be affiliated with a resident North Carolina real            (a) Notwithstanding the provisions of G.S. 97-21 or any
     estate broker, and the resident North Carolina real es-              other provision of law, a real estate broker may include
     tate broker shall actively and personally supervise the              in the governing contract with a real estate salesper-
     licensee in a manner that reasonably assures that the li-            son whose nonemployee status is recognized pursuant
     censee complies with the requirements of this Chap-                  to section 3508 of the United States Internal Revenue
     ter and rules adopted by the Commission. A person or                 Code, 26 U.S.C. § 3508, an agreement for the sales-
     entity licensed under this subsection shall not, howev-              person to reimburse the broker for the cost of covering
     er, be affiliated with a resident North Carolina real es-              that salesperson under the broker’s workers’ compensa-
     tate provisional broker. The Commission may exempt                   tion coverage of the broker’s business.
     applicants for licensure under this subsection from ex-          (b) Nothing in this section shall affect a requirement under
     amination and the other licensing requirements under                 any other law to provide workers’ compensation cover-
     G.S. 93A-4. The Commission may adopt rules as it                     age or in any manner exclude from coverage any person,
     deems necessary to give effect to this subsection, in-                firm, or corporation otherwise subject to the provisions
     cluding rules establishing: (i) qualifications for licen-             of Article 1 of Chapter 97 of the General Statutes.
     sure; (ii) licensure and renewal procedures; (iii) re-
     quirements for continuing education; (iv) conduct of             93A-12. Disputed monies.
     persons and entities licensed under this subsection and          (a) A real estate broker licensed under this Chapter may
     their affiliated resident real estate brokers; (v) a defi-              deposit with the clerk of court in accordance with this
     nition of commercial real estate; and (vi) any require-              section monies, other than a residential security depos-
     ments or limitations on affiliation between resident                   it, the ownership of which are in dispute and that the
     real estate brokers and persons or entities seeking licen-           real estate broker received while acting in a fiduciary
     sure under this subsection.                                          capacity.
                                                                      (b) The disputed monies shall be deposited with the clerk
93A-10. Nonresident licensees; filing of consent as to                    of court in the county in which the property for which
           service of process and pleadings.                              the disputed monies are being held is located. At the
Every nonresident applicant shall file an irrevocable consent              time of depositing the disputed monies, the real es-
that suits and actions may be commenced against such ap-                  tate broker shall certify to the clerk of court that the
plicant in any of the courts of record of this State, by the              persons who are claiming ownership of the disputed
service of any process or pleading authorized by the laws of              monies have been notified in accordance with subsec-
this State in any county in which the plaintiff may reside,                tion (c) of this section that the disputed monies are to
by serving the same on the Executive Director of the Com-                 be deposited with the clerk of court and that the per-
mission, said consent stipulating and agreeing that such ser-             sons may initiate a special proceeding with the clerk of
vice of such process or pleadings on said Executive Director              court to recover the disputed monies.
shall be taken and held in all courts to be valid and binding         (c) Notice to the persons who are claiming ownership to
as if due service had been made personally upon the appli-                the disputed monies required under subsection (b) of
cant in this State. This consent shall be duly acknowledged,              this section shall be provided by delivering a copy of
and, if made by a corporation, shall be executed by an of-                the notice to the person or by mailing it to the person
ficer of the corporation. The signature of the officer on the                by first-class mail, postpaid, properly addressed to the
consent to service instrument shall be sufficient to bind the               person at the person’s last known address.
corporation and no further authentication is necessary. An            (d) A real estate broker shall not deposit disputed monies
application from a corporation or other business entity shall             with the clerk of court until 90 days following notifica-
be signed by an officer of the corporation or entity or by an               tion of the persons claiming ownership of the disput-
individual designated by the Commission.                                  ed monies.
In all cases where process or pleadings shall be served, un-          (e) Upon the filing of a special proceeding to recover the
der the provisions of this Chapter, upon the Executive Di-                disputed monies, the clerk shall determine the right-
rector of the Commission, such process or pleadings shall                 ful ownership of the monies and distribute the disput-
be served in duplicate, one of which shall be filed in the of-             ed monies accordingly. If no special proceeding is filed
fice of the Commission and the other shall be forwarded                    with the clerk of court within one year of the disputed
immediately by the Executive Director of the Commission,                  monies being deposited with the clerk of court, the dis-
by registered mail, to the last known business address of the             puted monies shall be deemed unclaimed and shall be
nonresident licensee against which such process or plead-                 delivered by the clerk of court to the State Treasurer in
ings are directed.                                                        accordance with the provisions of Article 4 of Chapter
                                                                          116B of the General Statutes.
93A-11. Reimbursement by real estate independent

10                                    North Carolina Real Estate License Law and Commission Rules
Sections 93A-13 through 93A-15: Reserved for future                        (2) The aggrieved person has sued the real estate bro-
       codification purposes.                                                     ker or salesperson in a court of competent juris-
                                                                                 diction and has filed with the Commission writ-
                  ARTICLE 2.                                                     ten notice of such lawsuit within 60 days after its
         REAL ESTATE RECOVERY FUND.                                              commencement unless the claim against the Real
                                                                                 Estate Recovery Fund is for an amount less than
93A-16. Real Estate Recovery Fund created; payment to                            three thousand dollars ($3,000), excluding attor-
       fund; management.                                                         neys fees, in which case the notice may be filed
(a) There is hereby created a special fund to be known as                        within 60 days after the termination of all judicial
    the “Real Estate Recovery Fund” which shall be set                           proceedings including appeals;
    aside and maintained by the North Carolina Real Es-                    (3) The aggrieved person has obtained final judgment
    tate Commission. Said fund shall be used in the man-                         in a court of competent jurisdiction against the
    ner provided under this Article for the payment of un-                       real estate broker or salesperson on grounds of
    satisfied judgments where the aggrieved person has suf-                       conversion of trust funds arising out of a transac-
    fered a direct monetary loss by reason of certain acts                       tion which occurred when such broker or sales-
    committed by any real estate salesperson licensed be-                        person was licensed and acting in a capacity for
    fore April 1, 2006, or by any real estate broker.                            which a license is required; and
(b) On September 1, 1979, the Commission shall transfer                    (4) Execution of the judgment has been attempted and
    the sum of one hundred thousand dollars ($100,000)                           has been returned unsatisfied in whole or in part.
    from its expense reserve fund to the Real Estate Recov-                Upon the termination of all judicial proceedings includ-
    ery Fund. Thereafter, the Commission may transfer to                   ing appeals, and for a period of one year thereafter, a
    the Real Estate Recovery Fund additional sums of mon-                  person eligible for recovery may file a verified applica-
    ey from whatever funds the Commission may have, pro-                   tion with the Commission for payment out of the Real
    vided that, if on December 31 of any year the amount                   Estate Recovery Fund of the amount remaining unpaid
    remaining in the fund is less than fifty thousand dollars               upon the judgment which represents the actual and di-
    ($50,000), the Commission may determine that each                      rect loss sustained by reason of conversion of trust funds.
    person or entity licensed under this Chapter, when re-                 A copy of the judgment and return of execution shall be
    newing his or her or its license, shall pay in addition to             attached to the application and filed with the Commis-
    his or her license renewal fee, a fee not to exceed ten                sion. The applicant shall serve upon the judgment debt-
    dollars ($10.00) per broker and five dollars ($5.00) per                or a copy of the application and shall file with the Com-
    salesperson as shall be determined by the Commission                   mission an affidavit or certificate of such service.
    for the purpose of replenishing the fund.                          (b) For the purposes of this Article, the term “trust funds”
(c) The Commission shall invest and reinvest the moneys                    shall include all earnest money deposits, down payments,
    in the Real Estate Recovery Fund in the same manner                    sales proceeds, tenant security deposits, undisbursed
    as provided by law for the investment of funds by the                  rents and other such monies which belong to another
    clerk of superior court. The proceeds from such invest-                or others and are held by a real estate broker or salesper-
    ments shall be deposited to the credit of the fund.                    son acting in that capacity. Trust funds shall also include
(d) The Commission shall have the authority to adopt rea-                  all time share purchase monies which are required to be
    sonable rules and procedures not inconsistent with the                 held in trust by G.S. 93A-45(c) during the time they are,
    provisions of this Article, to provide for the orderly, fair           in fact, so held. Trust funds shall not include, however,
    and efficient administration and payment of monies                       any funds held by an independent escrow agent under
    held in the Real Estate Recovery Fund.                                 G.S. 93A-42 or any funds which the court may find to
                                                                           be subject to an implied, constructive or resulting trust.
93A-17. Grounds for payment; notice and application                    (c) For the purposes of this Article, the terms “licensee”,
         to Commission.                                                    “broker”, and “salesperson” shall include only individu-
(a) An aggrieved person who has suffered a direct monetary                  al persons licensed under this Chapter as brokers or in-
    loss by reason of the conversion of trust funds by a real              dividual persons who were licensed under this Chap-
    estate salesperson licensed before April 1, 2006, or by                ter as salespersons prior to April 1, 2006. The terms “li-
    any licensed real estate broker shall be eligible to recov-            censee”, “broker”, and “salesperson” shall not include a
    er, subject to the limitations of this Article, the amount             time share developer, time share project, independent
    of trust funds converted and which is otherwise unre-                  escrow agent, corporation or other entity licensed un-
    coverable provided that:                                               der this Chapter.
    (1) The act or acts of conversion which form the ba-
          sis of the claim for recovery occurred on or after           93A-18. Hearing; required showing.
          September 1, 1979;                                           Upon such application by an aggrieved person, the Commis-
                                       North Carolina Real Estate License Law and Commission Rules                                 11
sion shall conduct a hearing and the aggrieved person shall                 any person or persons having knowledge of the facts
be required to show:                                                        and may be made on the basis that the application or
     (1) He or she is not a spouse of the judgment debtor                   the judgment referred to therein do not form a basis
           or a person representing such spouse; and                        for meritorious recovery within the purview of G.S.
     (2) He or she is making application not more than one                  93A-17, that the applicant has not complied with the
           year after termination of all judicial proceedings, in-          provisions of this Article, or that the liability of the
           cluding appeals, in connection with the judgment;                fund with regard to the particular licensee or transac-
     (3) He or she has complied with all requirements of                    tion has been exhausted; provided, however, notice of
           this Article;                                                    such motion shall be given at least 10 days prior to the
     (4) He or she has obtained a judgment as described in                  time fixed for hearing. If the applicant or judgment
           G.S. 93A-17, stating the amount owing thereon                    debtor fails to appear at the hearing after receiving no-
           at the date of application;                                      tice of the hearing, the applicant or judgment debtor
     (5) He or she has made all reasonable searches and in-                 shall waive his or her rights unless the absence is ex-
           quiries to ascertain whether the judgment debtor                 cused by the Commission.
           is possessed of real or personal property or other           (b) Whenever the judgment obtained by an applicant is by
           assets liable to be sold or applied in satisfaction of           default, stipulation, or consent, or whenever the action
           the judgment;                                                    against the licensee was defended by a trustee in bank-
     (6) That by such search he or she has discovered no                    ruptcy, the applicant, for purposes of this Article, shall
           real or personal property or other assets liable to              have the burden of proving his or her cause of action
           be sold or applied, or that he or she has discov-                for conversion of trust funds. Otherwise, the judgment
           ered certain of them, describing them, but that                  shall create a rebuttable presumption of the conversion
           the amount so realized was insufficient to satisfy                 of trust funds. This presumption is a presumption af-
           the judgment, stating the amount realized and the                fecting the burden of producing evidence.
           balance remaining due on the judgment after ap-
           plication of the amount realized; and                        93A-20. Order directing payment out of fund;
     (7) He or she has diligently pursued his or her rem-                         compromise of claims.
           edies including attempted execution on the judg-             Applications for payment from the Real Estate Recovery
           ment against all the judgment debtors which exe-             Fund shall be heard and decided by a majority of the mem-
           cution has been returned unsatisfied. In addition             bers of the Commission. If, after a hearing, the Commis-
           to that, he or she knows of no assets of the judg-           sion finds the claim should be paid from the fund, the
           ment debtor and that he or she has attempted col-            Commission shall enter an order requiring payment from
           lection from all other persons who may be liable             the fund of whatever sum the Commission shall find to be
           to him or her in the transaction for which he or             payable upon the claim in accordance with the limitations
           she seeks payment from the Real Estate Recovery              contained in this Article.
           Fund if there be any such other persons.                     Subject to Commission approval, a claim based upon the
                                                                        application of an aggrieved person may be compromised;
93A-19. Response and defense by Commission and                          however, the Commission shall not be bound in any way
          judgment debtor; proof of conversion.                         by any compromise or stipulation of the judgment debtor.
(a) Whenever the Commission proceeds upon an applica-                   If a claim appears to be otherwise meritorious, the Com-
    tion as set forth in this Article, counsel for the Com-             mission may waive procedural defects in the application for
    mission may defend such action on behalf of the fund                payment.
    and shall have recourse to all appropriate means of de-
    fense, including the examination of witnesses. The                  93A-21. Limitations; pro rata distribution; attorney
    judgment debtor may defend such action on his or                            fees.
    her own behalf and shall have recourse to all appro-                (a) Payments from the Real Estate Recovery Fund shall be
    priate means of defense, including the examination of                   subject to the following limitations:
    witnesses. Counsel for the Commission and the judg-                     (1) The right to recovery under this Article shall be for-
    ment debtor may file responses to the application, set-                       ever barred unless application is made within one
    ting forth answers and defenses. Responses shall be                          year after termination of all proceedings including
    filed with the Commission and copies shall be served                          appeals, in connection with the judgment;
    upon every party by the filing party. If at any time it                  (2) The fund shall not be liable for more than twen-
    appears there are no triable issues of fact and the ap-                      ty-five thousand dollars ($25,000) per transaction
    plication for payment from the fund is without mer-                          regardless of the number of persons aggrieved or
    it, the Commission shall dismiss the application. A                          parcels of real estate involved in such transaction;
    motion to dismiss may be supported by affidavit of                             and

12                                      North Carolina Real Estate License Law and Commission Rules
    (3) The liability of the fund shall not exceed in the ag-            judgment creditor shall assign all his or her right, title, and
          gregate twenty-five thousand dollars ($25,000) for              interest in the judgment to the extent of the amount so paid
          any one licensee within a single calendar year, and            to the Commission and any amount and interest so recov-
          in no event shall it exceed in the aggregate fifty              ered by the Commission on the judgment shall be deposited
          thousand dollars ($50,000) for any one licensee.               in the Real Estate Recovery Fund.
    (4) The fund shall not be liable for payment of any
          judgment awards of consequential damages, mul-                 93A-24. Waiver of rights.
          tiple or punitive damages, civil penalties, inciden-           The failure of an aggrieved person to comply with this Arti-
          tal damages, special damages, interest, costs of               cle shall constitute a waiver of any rights hereunder.
          court or action or other similar awards.
(b) If the maximum liability of the fund is insufficient to                93A-25. Persons ineligible to recover from fund.
    pay in full the valid claims of all aggrieved persons whose          No real estate broker or real estate salesperson who suffers
    claims relate to the same transaction or to the same li-             the loss of any commission from any transaction in which he
    censee, the amount for which the fund is liable shall be             or she was acting in the capacity of a real estate broker or real
    distributed among the claimants in a ratio that their re-            estate salesperson shall be entitled to make application for
    spective claims bear to the total of such valid claims or in         payment from the Real Estate Recovery Fund for such loss.
    such manner as the Commission, in its discretion, deems
    equitable. Upon petition of counsel for the Commis-                  93A-26. Disciplinary action against licensee.
    sion, the Commission may require all claimants and pro-              Nothing contained in this Article shall limit the authority of
    spective claimants to be joined in one proceeding to the             the Commission to take disciplinary action against any li-
    end that the respective rights of all such claimants to the          censee under this Chapter, nor shall the repayment in full of
    Real Estate Recovery Fund may be equitably resolved.                 all obligations to the fund by any licensee nullify or modify
    A person who files an application for payment after the               the effect of any other disciplinary proceeding brought un-
    maximum liability of the fund for the licensee or transac-           der this Chapter.
    tion has been exhausted shall not be entitled to payment
    and may not seek judicial review of the Commission’s                 Sections 93A-27 through 93A-31: Reserved for future
    award of payment to any party except upon a showing                         codification purposes.
    that the Commission abused its discretion.
(c) In the event an aggrieved person is entitled to payment                                 ARTICLE 3.
    from the fund in an amount of one thousand five hun-                           PRIVATE REAL ESTATE SCHOOLS.
    dred dollars ($1,500) or less, the Commission may allow
    such person to recover from the fund reasonable attor-                      Interested persons may obtain a copy of
    ney’s fees incurred in effecting such recovery. Reimburse-                Article 3 by making written request to the North
    ment for attorney’s fees shall be limited to those fees in-              Carolina Real Estate Commission.
    curred in effecting recovery from the fund and shall not
    include any fee incurred in obtaining judgment against                                         ARTICLE 4.
    the licensee.                                                                                TIME SHARES.

93A-22. Repayment to fund; automatic suspension of                       93A-39. Title.
           license.                                                      This Article shall be known and may be cited as the “North
Should the Commission pay from the Real Estate Recovery                  Carolina Time Share Act.”
Fund any amount in settlement of a claim or toward satisfac-
tion of a judgment against a licensed real estate broker or sales-       93A-40. Registration required of time share projects;
person, any license issued to the broker or salesperson shall be                  real estate license required.
automatically suspended upon the effective date of the order              (a) It shall be unlawful for any person in this State to en-
authorizing payment from the fund. No such broker or sales-                  gage or assume to engage in the business of a time share
person shall be granted a reinstatement until the fund has been              salesperson without first obtaining a real estate broker
repaid in full, including interest at the legal rate as provided for         license issued by the North Carolina Real Estate Com-
in G.S. 24-1.                                                                mission under the provisions of Article I of this Chap-
                                                                             ter, and it shall be unlawful for a time share developer
93A-23. Subrogation of rights.                                               to sell or offer to sell a time share located in this State
When the Commission has paid from the Real Estate Re-                        without first obtaining a certificate of registration for
covery Fund any sum to the judgment creditor, the Com-                       the time share project to be offered for sale issued by
mission shall be subrogated to all of the rights of the judg-                the North Carolina Real Estate Commission under the
ment creditor to the extent of the amount so paid and the                    provisions of this Article.
                                         North Carolina Real Estate License Law and Commission Rules                                   13
(b) A person responsible as general partner, corporate of-                       share project or a specified portion thereof, includ-
    ficer, joint venturer or sole proprietor who intentional-                     ing, but not limited to, a vacation license, prepaid
    ly acts as a time share developer, allowing the offering                      hotel reservation, club membership, limited part-
    of sale or the sale of time shares to a purchaser, without                   nership, vacation bond, or a plan or system where the
    first obtaining registration of the time share project un-                    right to use is awarded or apportioned on the basis of
    der this Article shall be guilty of a Class I felony.                        points, vouchers, split, divided, or floating use;
                                                                            (9a) “Time share instrument” means an instrument
93A-41. Definitions.                                                             transferring a time share or any interest, legal or
When used in this Article, unless the context otherwise re-                      beneficial, in a time share to a purchaser, including
quires, the term:                                                                a contract, installment contract, lease, deed, or oth-
     (1) “Commission” means the North Carolina Real Es-                          er instrument;
           tate Commission;                                                 (10) “Time share program” means any arrangement for
     (2) “Developer” means any person or entity which cre-                       time shares whereby real property has been made
           ates a time share or a time share project or pro-                     subject to a time share;
           gram, purchases a time share for purpose of re-                  (11) “Time share project” means any real property that is
           sale, or is engaged in the business of selling its                    subject to a time share program;
           own time shares and shall include any person or                  (11a)“Time share registrar” means a natural person who
           entity who controls, is controlled by, or is in com-                  is designated by the developer to record or cause
           mon control with the developer which is engaged                       time share instruments and lien releases to be re-
           in creating or selling time shares for the develop-                   corded and to fulfill the other duties imposed by
           er, but a person who purchases a time share for his                   this Article;
           or her occupancy, use, and enjoyment shall not be                (12) “Time share salesperson” means a person who sells
           deemed a developer;                                                   or offers to sell on behalf of a developer a time share
     (3) “Enrolled” means paid membership in exchange                            to a purchaser; and
           programs or membership in an exchange program                    (13) “Time share unit” or “unit” means the real property
           evidenced by written acceptance or confirmation                        or real property improvement in a project which is
           of membership;                                                        divided into time shares and designated for separate
     (4) “Exchange company” means any person operat-                             occupancy and use.
           ing an exchange program;
     (5) “Exchange program” means any opportunity or                  93A-42. Time shares deemed real estate.
           procedure for the assignment or exchange of time           (a) A time share is deemed to be an interest in real estate,
           shares among purchasers in the same or other                   and shall be governed by the law of this State relating to
           time share project;                                            real estate.
     (5a) “Independent escrow agent” means a licensed at-             (b) A purchaser of a time share may in accordance with G.S.
           torney located in this State or a financial institu-            47-18 register the time share instrument by which he
           tion located in this State;                                    or she acquired his or her interest and upon such reg-
     (6) “Managing agent” means a person who under-                       istration shall be entitled to the protection provided by
           takes the duties, responsibilities, and obligations            Chapter 47 of the General Statutes for the recordation
           of the management of a time share program;                     of other real property instruments. A time share in-
     (7) Person” means one or more natural persons, cor-                  strument transferring or encumbering a time share shall
           porations, partnerships, associations, trusts, oth-            not be rejected for recordation because of the nature or
           er entities, or any combination thereof;                       duration of that estate, provided all other requirements
     (7a) “Project broker” means a natural person licensed                necessary to make an instrument recordable are com-
           as a real estate broker and designated by the de-              plied with.
           veloper to supervise brokers at the time share             (c) The developer shall record or cause to be recorded a time
           project;                                                       share instrument:
     (8) “Purchaser” means any person other than a de-                    (1) Not less than six days nor more than 45 days follow-
           veloper or lender who owns or acquires an inter-                     ing the execution of the contract of sale by the pur-
           est or proposes to acquire an interest in a time                     chaser; or
           share;                                                         (2) Not later than 180 days following the execution
     (9) “Time share” means a right to occupy a unit or any                     of the contract of sale by the purchaser, provided
           of several units during five or more separated time                   that all payments made by the purchaser shall be
           periods over a period of at least five years, includ-                 placed by the developer with an independent es-
           ing renewal options, whether or not coupled with                     crow agent upon the expiration of the 10-day es-
           a freehold estate or an estate for years in a time                   crow period provided by G.S. 93A-45(c).

14                                    North Carolina Real Estate License Law and Commission Rules
(d) The independent escrow agent provided by G.S.                                completed at the time of sale of a time share;
     93A-42(c)(2) shall deposit and maintain the purchaser’s                (5) The specific term of the time share;
     payments in an insured trust or escrow account in a bank               (6) The purchaser’s right to cancel within five days of
     or savings and loan association located in this State. The                  execution of the contract and how that right may
     trust or escrow account may be interest-bearing and the                     be exercised under G.S. 93A-45;
     interest earned shall belong to the developer, if agreed               (7) A statement that under North Carolina law an in-
     upon in writing by the purchaser; provided, however,                        strument conveying a time share must be record-
     if the time share instrument is not recorded within the                     ed in the Register of Deeds Office to protect that
     time periods specified in this section, then the interest                    interest; and
     earned shall belong to the purchaser. The independent                  (8) Any other information which the Commission
     escrow agent shall return all payments to the purchas-                      may by rule require.
     er at the expiration of 180 days following the execution          The public offering statement shall also contain a one page
     of the contract of sale by the purchaser, unless prior to         cover containing a summary of the text of the statement.
     that time the time share instrument has been recorded.
     However, if prior to the expiration of 180 days follow-           93A-45. Purchaser’s right to cancel; escrow; violation.
     ing the execution of the contract of sale, the developer          (a) A developer shall, before transfer of a time share and
     and the purchaser provide their written consent to the                no later than the date of any contract of sale, provide a
     independent escrow agent, the developer’s obligation to               prospective purchaser with a copy of a public offering
     record the time share instrument and the escrow period                statement containing the information required by G.S.
     may be extended for an additional period of 120 days.                 93A-44. The contract of sale is voidable by the pur-
     Upon recordation of the time share instrument, the in-                chaser for five days after the execution of the contract.
     dependent escrow agent shall pay the purchaser’s funds                The contract shall conspicuously disclose the purchas-
     to the developer. Upon request by the Commission, the                 er’s right to cancel under this subsection and how that
     independent escrow agent shall promptly make avail-                   right may be exercised. The purchaser may not waive
     able to the Commission inspection of records of money                 this right of cancellation. Any oral or written declara-
     held by him or her.                                                   tion or instrument that purports to waive this right of
(e) In no event shall the developer be required to record a                cancellation is void.
     time share instrument if the purchaser is in default of           (b) A purchaser may elect to cancel within the time period
     his or her obligations.                                               set out in subsection (a) by hand delivering or by mail-
(f ) Recordation under the provisions of this section of the               ing notice to the developer or the time share salesper-
     time share instrument shall constitute delivery of that               son. Cancellation under this section is without penalty
     instrument from the developer to the purchaser.                       and upon receipt of the notice all payments made prior
                                                                           to cancellation must be refunded immediately.
93A-43. Partition.                                                     (c) Any payments received by a time share developer or time
When a time share is owned by two or more persons as ten-                  share salesperson in connection with the sale of the time
ants in common or as joint tenants either may seek a parti-                share shall be immediately deposited by such developer
tion by sale of that interest but no purchaser of a time share             or salesperson in a trust or escrow account in an insured
may maintain an action for partition by sale or in kind of the             bank or savings and loan association in North Carolina
unit in which such time share is held.                                     and shall remain in such account for 10 days or cancella-
                                                                           tion by the purchaser, whichever occurs first. Payments
93A-44. Public offering statement.                                         held in such trust or escrow accounts shall be deemed
Each developer shall fully and conspicuously disclose in a                 to belong to the purchaser and not the developer. In
public offering statement:                                                  lieu of such escrow requirements, the Commission shall
     (1) The total financial obligation of the purchaser, which             have the authority to accept, in its discretion, alternative
          shall include the initial purchase price and any addi-           financial assurances adequate to protect the purchaser’s
          tional charges to which the purchaser may be subject;            interest during the contract cancellation period, includ-
     (2) Any person who has or may have the right to alter,                ing but not limited to a surety bond, corporate bond,
          amend or add to charges to which the purchaser                   cash deposit or irrevocable letter of credit in an amount
          may be subject and the terms and conditions un-                  equal to the escrow requirements.
          der which such charges may be imposed;                       (d) If a developer fails to provide a purchaser to whom a
     (3) The nature and duration of each agreement be-                     time share is transferred with the statement as required
          tween the developer and the person managing the                  by subsection (a), the purchaser, in addition to any rights
          time share program or its facilities;                            to damages or other relief, is entitled to receive from the
     (4) The date of availability of each amenity and facil-               developer an amount equal to ten percent (10%) of the
          ity of the time share program when they are not                  sales price of the time share not to exceed three thousand
                                       North Carolina Real Estate License Law and Commission Rules                                  15
     dollars ($3,000). A receipt signed by the purchaser stat-                     in boldfaced type, and, in the event that such limi-
     ing that he or she has received the statement required by                     tations, restrictions, or priorities are not uniformly
     subsection (a) is prima facie evidence of delivery of such                    applied by the exchange program, a clear descrip-
     statement.                                                                    tion of the manner in which they are applied;
                                                                              (10) Whether exchanges are arranged on a space avail-
93A-46. Prizes.                                                                    able basis and whether any guarantees of fulfill-
An advertisement of a time share which includes the offer of                        ment of specific requests for exchanges are made
a prize or other inducement shall fully comply with the provi-                     by the exchange program;
sions of Chapter 75 of the General Statutes.                                  (11) Whether and under what circumstances an owner,
                                                                                   in dealing with the exchange company, may lose
93A-47. Time shares proxies.                                                       the use and occupancy of his or her time share in
No proxy, power of attorney or similar device given by the pur-                    any properly applied for exchange without his or
chaser of a time share regarding the management of the time                        her being provided with substitute accommoda-
share program or its facilities shall exceed one year in duration,                 tions by the exchange company;
but the same may be renewed from year to year.                                (12) The expenses, fees or range of fees for participa-
                                                                                   tion by owners in the exchange program, a state-
93A-48. Exchange programs.                                                         ment whether any such fees may be altered by the
(a) If a purchaser is offered the opportunity to subscribe to any                   exchange company, and the circumstances under
    exchange program, the developer shall, except as provided                      which alterations may be made;
    in subsection (b), deliver to the purchaser, prior to the ex-             (13) The name and address of the site of each time
    ecution of (i) any contract between the purchaser and the                      share project or other property which is partici-
    exchange company, and (ii) the sales contract, at least the                    pating in the exchange program;
    following information regarding such exchange program:                    (14) The number of units in each project or other prop-
    (1) The name and address of the exchange company;                              erty participating in the exchange program which
    (2) The names of all officers, directors, and shareholders                       are available for occupancy and which qualify for
          owning five percent (5%) or more of the outstand-                         participation in the exchange program, expressed
          ing stock of the exchange company;                                       within the following numerical groupings, 1-5,
    (3) Whether the exchange company or any of its offi-                             6-10, 11-20, 21-50 and 51, and over;
          cers or directors has any legal or beneficial interest in            (15) The number of owners with respect to each time
          any developer or managing agent for any time share                       share project or other property which are eligible
          project participating in the exchange program and,                       to participate in the exchange program expressed
          if so, the name and location of the time share proj-                     within the following numerical groupings, 1-100,
          ect and the nature of the interest;                                      101-249, 250-499, 500-999, and 1,000 and over,
    (4) Unless the exchange company is also the developer a                        and a statement of the criteria used to determine
          statement that the purchaser’s contract with the ex-                     those owners who are currently eligible to partici-
          change company is a contract separate and distinct                       pate in the exchange program;
          from the sales contract;                                            (16) The disposition made by the exchange company
    (5) Whether the purchaser’s participation in the ex-                           of time shares deposited with the exchange pro-
          change program is dependent upon the contin-                             gram by owners eligible to participate in the ex-
          ued affiliation of the time share project with the ex-                     change program and not used by the exchange
          change program;                                                          company in effecting exchanges;
    (6) Whether the purchaser’s membership or participa-                      (17) The following information which, except as pro-
          tion, or both, in the exchange program is voluntary                      vided in subsection (b) below, shall be indepen-
          or mandatory;                                                            dently audited by a certified public accountant in
    (7) A complete and accurate description of the terms                           accordance with the standards of the Accounting
          and conditions of the purchaser’s contractual rela-                      Standards Board of the American Institute of Cer-
          tionship with the exchange company and the pro-                          tified Public Accountants and reported for each
          cedure by which changes thereto may be made;                             year no later than July 1, of the succeeding year:
    (8) A complete and accurate description of the proce-                          a. The number of owners enrolled in the exchange
          dure to qualify for and effectuate exchanges;                                  program and such numbers shall disclose the
    (9) A complete and accurate description of all limita-                              relationship between the exchange company
          tions, restrictions, or priorities employed in the op-                        and owners as being either fee paying or gra-
          eration of the exchange program, including, but not                           tuitous in nature;
          limited to, limitations on exchanges based on sea-                       b. The number of time share projects or other
          sonality, unit size, or levels of occupancy, expressed                        properties eligible to participate in the ex-

16                                      North Carolina Real Estate License Law and Commission Rules
               change program categorized by those having                al of a contract between an owner and an exchange
               a contractual relationship between the de-                company.
               veloper or the association and the exchange           (d) All promotional brochures, pamphlets, advertisements,
               company and those having solely a contrac-                or other materials disseminated by the exchange com-
               tual relationship between the exchange com-               pany to purchasers in this State which contain the per-
               pany and owners directly;                                 centage of confirmed exchanges described in (a)(17)c.
          c. The percentage of confirmed exchanges, which                 must include the statement set forth in (a)(18).
               shall be the number of exchanges confirmed
               by the exchange company divided by the                93A-49. Service of process on exchange company.
               number of exchanges properly applied for,             Any exchange company offering an exchange program to
               together with a complete and accurate state-          a purchaser shall be deemed to have made an irrevocable
               ment of the criteria used to determine wheth-         appointment of the Commission to receive service of law-
               er an exchange requested was properly ap-             ful process in any proceeding against the exchange company
               plied for;                                            arising under this Article.
          d. The number of time shares or other intervals
               for which the exchange company has an out-            93A-50. Securities laws apply.
               standing obligation to provide an exchange            The North Carolina Securities Act, Chapter 78A, shall also
               to an owner who relinquished a time share             apply, in addition to the laws relating to real estate, to time
               or interval during the year in exchange for a         shares deemed to be investment contracts or to other secu-
               time share or interval in any future year; and        rities offered with or incident to a time share; provided, in
          e. The number of exchanges confirmed by the                 the event of such applicability of the North Carolina Se-
               exchange company during the year; and                 curities Act, any offer or sale of time shares registered un-
    (18) A statement in boldfaced type to the effect that             der this Article shall not be subject to the provisions of G.S.
          the percentage described in subparagraph (17)c.            78A-24 and any real estate broker registered under Article
          of subsection (a) is a summary of the exchange re-         1 of this Chapter shall not be subject to the provisions of
          quests entered with the exchange company in the            G.S. 78A-36.
          period reported and that the percentage does not
          indicate a purchaser’s/owner’s probabilities of be-        93A-51. Rule-making authority.
          ing confirmed to any specific choice or range of             The Commission shall have the authority to adopt rules
          choices, since availability at individual locations        and regulations that are not inconsistent with the provisions
          may vary.                                                  of this Article and the General Statutes of North Carolina.
    The purchaser shall certify in writing to the receipt of         The Commission may prescribe forms and procedures for
    the information required by this subsection and any              submitting information to the Commission.
    other information which the Commissioners may by
    rule require.                                                    93A-52. Application for registration of time share
(b) The information required by subdivisions (a), (2), (3),                   project; denial of registration; renewal;
    (13), (14), (15), and (17) shall be accurate as of De-                    reinstatement; and termination of developer’s
    cember 31 of the year preceding the year in which the                     interest.
    information is delivered, except for information de-             (a) Prior to the offering in this State of any time share located
    livered within the first 180 days of any calendar year                in this State, the developer of the time share project shall
    which shall be accurate as of December 31 of the year                make written application to the Commission for the
    two years preceding the year in which the informa-                   registration of the project. The application shall be ac-
    tion is delivered to the purchaser. The remaining in-                companied by a fee in an amount fixed by the Commis-
    formation required by subsection (a) shall be accu-                  sion but not to exceed one thousand five hundred dol-
    rate as of a date which is no more than 30 days prior                lars ($1,500), and shall include a description of the proj-
    to the date on which the information is delivered to                 ect, copies of proposed time share instruments including
    the purchaser.                                                       public offering statements, sale contracts, deeds, and oth-
(c) In the event an exchange company offers an exchange                   er documents referred to therein, information pertaining
    program directly to the purchaser or owner, the ex-                  to any marketing or managing entity to be employed by
    change company shall deliver to each purchaser or                    the developer for the sale of time shares in a time share
    owner, concurrently with the offering and prior to                    project or the management of the project, information
    the execution of any contract between the purchas-                   regarding any exchange program available to the pur-
    er or owner and the exchange company the informa-                    chaser, an irrevocable appointment of the Commission
    tion set forth in subsection (a) above. The require-                 to receive service of any lawful process in any proceeding
    ments of this paragraph shall not apply to any renew-                against the developer or the developer’s time share sales-
                                     North Carolina Real Estate License Law and Commission Rules                                  17
     persons arising under this Article, and such other infor-                ration date thereof shall be subject to a fee of fifty dollars
     mation as the Commission may by rule require.                            ($50.00) in addition to the required renewal fee. In the
     Upon receipt of a properly completed application and                     event a time share developer fails to reinstate the regis-
     fee and upon a determination by the Commission that                      tration within 12 months after the expiration date there-
     the sale and management of the time shares in the time                   of, the Commission may, in its discretion, consider the
     share project will be directed and conducted by persons                  time share project as not having been previously regis-
     of good moral character, the Commission shall issue to                   tered, and thereby subject to the provisions of this Article
     the developer a certificate of registration authorizing the               relating to the issuance of an original certificate. Dupli-
     developer to offer time shares in the project for sale. The               cate certificates may be issued by the Commission upon
     Commission shall within 15 days after receipt of an in-                  payment of a fee of one dollar ($1.00) by the registrant
     complete application, notify the developer by mail that                  developer. Except as prescribed by Commission rules, all
     the Commission has found specified deficiencies, and                       fees paid pursuant to this Article shall be nonrefundable.
     shall, within 45 days after the receipt of a properly com-
     pleted application, either issue the certificate of registra-       93A-53. Register of applicants; roster of registrants;
     tion or notify the developer by mail of any specific ob-                     registered projects; financial report to Secretary
     jections to the registration of the project. The certificate                 of State.
     shall be prominently displayed in the office of the devel-           (a) The Executive Director of the Commission shall keep a
     oper on the site of the project.                                       register of all applicants for certificates of registration,
     The developer shall promptly report to the Commission                  showing for each the date of application, name, busi-
     any and all changes in the information required to be                  ness address, and whether the certificate was granted
     submitted for the purpose of the registration. The de-                 or refused.
     veloper shall also immediately furnish the Commission              (b) The Executive Director of the Commission shall also
     complete information regarding any change in its inter-                keep a current roster showing the name and address of
     est in a registered time share project. In the event a de-             all time share projects registered with the Commission.
     veloper disposes of, or otherwise terminates its interest              The roster shall be kept on file in the office of the Com-
     in a time share project, the developer shall certify to the            mission and be open to public inspection.
     Commission in writing that its interest in the time share          (c) On or before the first day of September of each year, the
     project is terminated and shall return to the Commission               Commission shall file with the Secretary of State a copy
     for cancellation the certificate of registration.                       of the roster of time share projects registered with the
(b) In the event the Commission finds that there is substantial              Commission and a report containing a complete state-
     reason to deny the application for registration as a time              ment of income received by the Commission in con-
     share project, the Commission shall notify the applicant               nection with the registration of time share projects for
     that such application has been denied and shall afford the              the preceding fiscal year ending June 30th attested by
     applicant an opportunity for a hearing before the Com-                 the affidavit of the Executive Director of the Commis-
     mission to show cause why the application should not be                sion. The report shall be made a part of those annual
     denied. In all proceedings to deny a certificate of regis-              reports required under the provisions of G.S. 93A- 5.
     tration, the provisions of Chapter 150B of the General
     Statutes shall be applicable.                                      93A-54. Disciplinary action by Commission.
(c) The acceptance by the Commission of an application for              (a) The Commission shall have power to take disciplinary
     registration shall not constitute the approval of its con-             action. Upon its own motion, or on the verified com-
     tents or waive the authority of the Commission to take                 plaint of any person, the Commission may investigate
     disciplinary action as provided by this Article.                       the actions of any time share salesperson, developer, or
(d) All certificates of registration granted and issued by the               project broker of a time share project registered under
     Commission under the provisions of this Article shall ex-              this Article, or any other person or entity who shall as-
     pire on the 30th day of June following issuance thereof,               sume to act in such capacity. If the Commission finds
     and shall become invalid after such date unless reinstat-              probable cause that a time share salesperson, develop-
     ed. Renewal of such certificate may be effected at any                   er, or project broker has violated any of the provisions
     time during the month of June preceding the date of ex-                of this Article, the Commission may hold a hearing on
     piration of such registration upon proper application to               the allegations of misconduct.
     the Commission and by the payment of a renewal fee                     The Commission shall have the power to suspend or
     fixed by the Commission but not to exceed one thou-                     revoke at any time a real estate license issued to a time
     sand five hundred dollars ($1,500) for each time share                  share salesperson or project broker, or a certificate of
     project. The developer shall, when making application                  registration of a time share project issued to a develop-
     for renewal, also provide a copy of the report required in             er; or to reprimand or censure such salesperson, devel-
     G.S. 93A-48. Each certificate reinstated after the expi-                oper, or project broker; or to fine such developer in the

18                                      North Carolina Real Estate License Law and Commission Rules
amount of five hundred dollars ($500.00) for each vi-                        against liens required by G.S. 93A-57(a); or
olation of this Article, if, after a hearing, the Commis-             (16) Failing as a time share project broker to exercise
sion adjudges either the salesperson, developer, or proj-                   reasonable and adequate supervision of the con-
ect broker to be guilty of:                                                 duct of sales at his or her project or location by the
(1) Making any willful or negligent misrepresentation                       brokers and salespersons under his or her control.
      or any willful or negligent omission of material           (a1) The clear proceeds of fines collected pursuant to sub-
      fact about any time share or time share project;                section (a) of this section shall be remitted to the Civil
(2) Making any false promises of a character likely to                Penalty and Forfeiture Fund in accordance with G.S.
      influence, persuade, or induce;                                  115C-457.2.
(3) Pursuing a course of misrepresentation or making             (b) Following a hearing, the Commission shall also have
      of false promises through agents, salespersons, ad-             power to suspend or revoke any certificate of registra-
      vertising or otherwise;                                         tion issued under the provisions of this Article or to
(4) Failing, within a reasonable time, to account for                 reprimand or censure any developer when the regis-
      all money received from others in a time share                  trant has been convicted or has entered a plea of guilty
      transaction, and failing to remit such monies as                or no contest upon which final judgment is entered by
      may be required in G.S. 93A- 45 of this Article;                a court of competent jurisdiction in this State, or any
(5) Acting as a time share salesperson or time share                  other state, of the criminal offenses of: embezzlement,
      developer in a manner as to endanger the inter-                 obtaining money under false pretense, fraud, forgery,
      est of the public;                                              conspiracy to defraud, or any other offense involving
(6) Paying a commission, salary, or other valuable                    moral turpitude which would reasonably affect the de-
      consideration to any person for acts or services                veloper’s performance in the time share business.
      performed in violation of this Article;                    (c) The Commission may appear in its own name in supe-
(7) Any other conduct which constitutes improper,                     rior court in actions for injunctive relief to prevent any
      fraudulent, or dishonest dealing;                               person or entity from violating the provisions of this
(8) Performing or undertaking to perform any legal                    Article or rules promulgated by the Commission. The
      service as set forth in G.S. 84-2.1, or any other               superior court shall have the power to grant these in-
      acts not specifically set forth in that section;                 junctions even if criminal prosecution has been or may
(9) Failing to deposit and maintain in a trust or es-                 be instituted as a result of the violations, or regardless
      crow account in an insured bank or savings and                  of whether the person or entity has been registered by
      loan association in North Carolina all money re-                the Commission.
      ceived from others in a time share transaction as          (d) Each developer shall maintain or cause to be main-
      may be required in G.S. 93A-45 of this Article                  tained complete records of every time share transac-
      or failing to place with an independent escrow                  tion including records pertaining to the deposit, main-
      agent the funds of a time share purchaser when                  tenance, and withdrawal of money required to be held
      required by G.S. 93A-42(c);                                     in a trust or escrow account, or as otherwise required
(10) Failing to deliver to a purchaser a public offering               by the Commission, under G.S. 93A-45 of this Article.
      statement containing the information required                   The Commission may inspect these records periodical-
      by G.S. 93A-44 and any other disclosures that                   ly without prior notice and may also inspect these re-
      the Commission may by regulation require;                       cords whenever the Commission determines that they
(11) Failing to comply with the provisions of Chapter                 are pertinent to an investigation of any specific com-
      75 of the General Statutes in the advertising or                plaint against a registrant.
      promotion of time shares for sale, or failing to as-       (e) When a licensee is accused of any act, omission, or mis-
      sure such compliance by persons engaged on be-                  conduct under this Article which would subject the li-
      half of a developer;                                            censee to disciplinary action, the licensee may, with the
(12) Failing to comply with the provisions of G.S.                    consent and approval of the Commission, surrender
      93A-48 in furnishing complete and accurate in-                  his or her or its license and all the rights and privileg-
      formation to purchasers concerning any exchange                 es pertaining to it for a period of time to be established
      program which may be offered to such purchaser;                  by the Commission. A licensee who surrenders his or
(13) Making any false or fraudulent representation on                 her or its license shall not be eligible for, or submit any
      an application for registration;                                application for, licensure as a real estate broker or reg-
(14) Violating any rule or regulation promulgated by                  istration of a time share project during the period of li-
      the Commission;                                                 cense surrender. For the purposes of this section, the
(15) Failing to record or cause to be recorded a time                 term licensee shall include a time share developer.
      share instrument as required by G.S. 93A-42(c),
      or failing to provide a purchaser the protection
                                 North Carolina Real Estate License Law and Commission Rules                                   19
93A-55. Private enforcement.                                                  he or she knowingly or recklessly fails to record or cause
The provisions of the Article shall not be construed to limit                 to be recorded a time share instrument as required by
in any manner the right of a purchaser or other person in-                    this Article.
jured by a violation of this Article to bring a private action.               A person responsible as general partner, corporate offi-
                                                                              cer, joint venturer or sole proprietor of the developer of
93A-56. Penalty for violation of Article.                                     a time share project shall be guilty of a Class I felony if
Except as provided in G.S. 93A-40(b) and G.S. 93A-58, any                     he or she intentionally allows the offering for sale or the
person violating the provisions of this Article shall be guilty               sale of time share to purchasers without first designating
of a Class 1 misdemeanor.                                                     a time share registrar.
                                                                          (c) The developer shall designate for each project and other lo-
93A-57. Release of liens.                                                     cations where time shares are sold or offered for sale a proj-
(a) Prior to any recordation of the instrument transferring a                 ect broker. The project broker shall act as supervising bro-
    time share, the developer shall record and furnish notice                 ker for all time share salespersons at the project or other lo-
    to the purchaser of a release or subordination of all liens               cation and shall directly, personally, and actively supervise
    affecting that time share, or shall provide a surety bond or               all such persons at the project or other location in a manner
    insurance against the lien from a company acceptable to                   to reasonably ensure that the sale of time shares will be con-
    the Commission as provided for liens on real estate in this               ducted in accordance with the provisions of this Chapter.
    State, or such underlying lien document shall contain a
    provision wherein the lienholder subordinates its rights              93A-59. Preservation of time share purchaser’s claims
    to that of a time share purchaser who fully complies with                      and defenses.
    all of the provisions and terms of the contract of sale.              (a) For one year following the execution of an instrument
(b) Unless a time share owner or a time share owner who is his                of indebtedness for the purchase of a time share, the
    or her predecessor in title agree otherwise with the lienor,              purchaser of a time share may assert against the sell-
    if a lien other than a mortgage or deed of trust becomes                  er, assignee of the seller, or other holder of the instru-
    effective against more than one time share in a time share                 ment of indebtedness, any claims or defenses avail-
    project, any time share owner is entitled to a release of his             able against the developer or the original seller, and
    or her time share from a lien upon payment of the amount                  the purchaser may not waive the right to assert these
    of the lien attributable to his or her time share. The amount             claims or defenses in connection with a time share pur-
    of the payment must be proportionate to the ratio that the                chase. Any recovery by the purchaser on a claim as-
    time share owner’s liability bears to the liabilities of all time         serted against an assignee of the seller or other holder
    share owners whose interests are subject to the lien. Upon                of the instrument of indebtedness shall not exceed the
    receipt of payment, the lien holder shall promptly deliver to             amount paid by the purchaser under the instrument.
    the time share owner a release of the lien covering that time             A holder shall be the person or entity with the rights of
    share. After payment, the managing agent may not assess or                a holder as set forth in G.S. 25-3-301.
    have a lien against that time share for any portion of the ex-        (b) Every instrument of indebtedness for the purchase of a
    penses incurred in connection with that lien.                             time share shall set forth the following provision in a
                                                                              clear and conspicuous manner:
93A-58. Registrar required; criminal penalties; project
         broker.
(a) Every developer of a registered project shall, by affida-                   “NOTICE: FOR A PERIOD OF ONE YEAR FOL-
    vit filed with the Commission, designate a natural per-                  LOWING THE EXECUTION OF THIS INSTRUMENT
    son to serve as time share registrar for its registered proj-           OF INDEBTEDNESS, ANY HOLDER OF THIS IN-
    ects. The registrar shall be responsible for the recorda-               STRUMENT OF INDEBTEDNESS IS SUBJECT TO
    tion of time share instruments and the release of liens re-             ALL CLAIMS AND DEFENSES WHICH THE PUR-
    quired by G.S. 93A-42(c) and G.S. 93A-57(a). A devel-                   CHASER COULD ASSERT AGAINST THE SELLER
    oper may, from time to time, change the designated time                 OF THE TIME SHARE. RECOVERY BY THE PUR-
    share registrar by proper filing with the Commission and                 CHASER SHALL NOT EXCEED AMOUNTS PAID BY
    by otherwise complying with this subsection. No sales or                THE PURCHASER UNDER THIS INSTRUMENT.”
    offers to sell shall be made until the registrar is designated
    for a time share project.                                             Sections 93A-60 through 93A-69: Reserved for future
    The registrar has the duty to ensure that the provisions of                  codification purposes.
    this Article are complied with in a time share project for
    which he or she is registrar. No registrar shall record a                                      Article 5.
    time share instrument except as provided by this Article.                               Real Estate Appraisers.
(b) A time share registrar shall be guilty of a Class I felony if                                 [Repealed]

20                                        North Carolina Real Estate License Law and Commission Rules

				
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