Real Estate Licensing

Real Estate Licensing

• To get a real estate license, you must be at least 18 years old, pass a minimum 75-hour prelicensing course, apply and pay the fee including a background check, pass the NC License Exam and pass the character review of the NCREC.
• Anyone who lists, leases, buys, exchanges, auctions or sells property for another for compensation needs a license, including those receiving referral fees for sending a buyer to a broker.
• Exceptions to needing a license include criers of an auction, For Sale By Owner situations, selling property of another with no fee, those with power of attorney or lawyers acting in the regular course of business, appraisers, mortgage brokers, trustees, executors, or administrators of an estate, and salaried employees of property management or housing authority companies.
• Compensation includes anything from a gift card to free or discounted rent, up to a free week at the beach.
• Brokers are independent contractors who pay their own business expenses, set their own hours, and pay income and payroll taxes.
• An independent contract agreement creates an agency relationship between the licensee and brokerage.
• Unlicensed assistants can receive and forward communication to the employing broker, submit listings and changes to a MLS provider based on broker-supplied data, assist a broker in compiling closing documents, and research/obtain public documents.
• Unlicensed assistants can also obtain keys for listed properties, record and deposit trust monies under BIC supervision, type forms with broker-provided information, check license renewal records, prepare commission checks as a bookkeeper, place signs, and supervise minor repairs.
• Unlicensed assistants can also act as a courier, coordinate appointments, schedule showings, show rental properties, complete preprinted leases for rental property, and answer basic questions if the broker provided the information in promotional materials.

NC Real Estate Licenses

• The three licenses issued in NC are Provisional/Non-Provisional/Broker in Charge, Firm (Partnership, LLC, Corporation) and Limited Non-Resident (Licensed in another state, affiliated with a NC Broker, declared with Commission).
• A firm license is needed for any business other than a sole proprietorship, but a sole proprietorship is unable to advertise, solicit business, have more than one broker, or hold trust funds without a BIC.

License Statuses

• Current status means the renewal fee was paid by June 30th.
• Expired status means the renewal fee was not paid.
• Active status means the licensee is current, affiliated with a BIC (if provisional), has met postlicensing education requirements, and meets continuing education requirements, including 8 hours of continuing education including a 4-hour GENUP or BICUP and a 4-hour elective.
• Provisional brokers have 18 months from licensure to complete postlicensing courses to stay active.
• Inactive-current status indicates the licensee is not affiliated with a BIC (if provisional), has not completed CE by June 10th, or didn't complete postlicensing courses within 18 months of licensure.
• Inactive licensees do not need to take postlicensing or continuing education until they activate, but if inactive for over 2 years, they must take 8 hours of CE and 60 hours of postlicensing courses within 6 months of sending a request to activate.

BIC Requirements

• BIC Requirements include having removed provisional status, having 2 years of full-time experience (or part-time equivalent) in the last 5 years, declaring BIC status with the NCREC, and completing the 12-hour BIC course within 120 days of election or the preceding year.
• The duties of a BIC are to directly supervise all provisional brokers, ensure all brokers are active, ensure agency records are complete and accurate and up to date, approve all advertising, directly supervise the trust account, and ensure transaction files are complete and retained for at least 3 years from the last date of activity.
• Remember the 3 A's: agency, active status, advertising, and the 2 T's: trust accounts and transaction files.
• The BIC is responsible for trust money and records, even if others maintain the trust account.
• Exceptions to the BIC requirement include sole proprietorships that cannot engage in transactions needing a trust account, or those that can't have others affiliated with them or advertise.

Real Estate Basics

• The Bundle of Rights transfers with property title, including land, attachments, water, and air rights.
• The Bundle of Rights includes DEEP C (Disposition, Exclusivity, Enjoyment, Possession, and Control).
• Ownership transfers by deed.
• Ownership may be called a tenement (land held by an owner) or hereditaments (corporeal and incorporeal rights).
• Real property includes land appurtenances like easements.

Classifying Property

• A pile of bricks is classified as personal property, but a brick patio is a fixture; plants in pots are personal property, but plants in the ground are a fixture.
• A buyer may ask for personal property to convey with the sale of the land/home, transferred through a bill of sale, and this agreement should be in the contract.
• A fixture is anything permanently attached to the home or land.
• Trailers/manufactured homes are personal property registered with the DMV and taxed like cars, but they become real estate if they are attached to a permanent foundation on owned land, and the hitch/wheels are removed and DMV title is canceled.
• A "total circumstances" test determines if an item is real or personal property. Relevant factors include the intention of the party, the relationship of the attacher (owner v. renter), the method of attachment, and adaptation or customization.
• A buyer and seller may negotiate for anything, but transfer of personal property might have to be conducted through a bill of sale.
• An appurtenance is an improvement on the land, like a driveway or utilities.
• Items used in trade or business are trade fixtures and remain personal property that the tenant can remove when they leave the property, but if the tenant leaves the items behind, they become the property of the landlord.
• Agricultural fixtures stay with the property unless there is an agreement in the lease granting an exclusion.
• The Uniform Commercial Code affects when personal property becomes a fixture. The contractor or lender retains a security interest, and the item remains personal property until full and final payment, with the creditor able to repossess the property if there is a default.
• Severance is the act of removing real property.
• Fructus naturales are planted trees and flowers, they remain when the property sells.
• Cultivated crops planted each year are personal property, and transfer unless otherwise agreed to in a contract.
• Fructus industriales are also called emblements/fruits of industry; these are personal property, and the planter has the right to re-enter once to harvest the crops.
• Riparian Rights are the rights of a person owning property bordering a river or stream.
• With Non-navigable waters, the property owner owns to the middle of the body of water.
• With Navigable waters, the property owner owns to the banks of the river.
• The state owns/controls the river, and may or may not allow an owner bordering a river to build a dock.
• Littoral Rights apply to property bordering water with a tide. The property line is the average high watermark, and the State controls the foreshore. Property owners will not retain water rights when the property transfers.
• Accretion is a gradual addition of land through soil accumulation, and this deposit is called alluvium or alluvion.
• Reliction is gradual land increase when water recedes and is permanently diverted.
• Erosion is the gradual loss of land.
• Avulsion is a sudden loss of land through an event like a hurricane.
• Air Rights are the owner's rights in the airspace above their land, but the government can limit them.
• Subsurface Rights are the owner's right to remove minerals, gas, or oil below the property surface, and these rights may be separated/severed from the land by a mineral deed or lease.
• Subjacent/Lateral Support changes to property cannot cause loss of support for a neighbor. An owner cannot excavate their property without supporting the neighbor's land.

Freehold Estates

• Freehold estates are indeterminable length, which lasts a lifetime or longer.
• Fee simple absolute ownership has no time limit with the right to keep, sell, lease, or encumber the property making it the highest form of ownership in real property.
• Fee simple defeasible deeds contain the property and any use restrictions, also known as the habendum clause.
• Fee simple determinable allows automatic termination of ownership upon a predetermined event. Ownership reverts to the original owner without a lawsuit.
• Fee simple conditional does not automatically terminate, and a suit is required to quiet title asking the court to establish which party has a superior claim to the property.
• Estate pur autre vie grants rights to property for the lifespan of another person.
• Non-inheritable estates exist if they're conventional life estates, marital life estates, estovers or life tenants.
• Conventional life estates end on the person's death to whom it was granted and reverts to a previous owner or their heirs.
• Marital life estates are created by statute when a will excludes a widowed spouse from assets owned in severalty (one owner).
• Estovers allow life tenants to use timber from the property for fuel and repairs.
• Life tenants can use timber and other resources from the property, but cannot sell the timber or other resources from the property and must pay property taxes, make repairs, and not damage the property.
• Homestead Exemption protects the sale of property from general liens (judgements and unsecured debts) up to a certain amount.
• The owner must pay secured debts like property taxes/mortgages, and it is limited to one owner-occupied property.
• NC provides a limited exemption of $35,000 ($60,000 for unmarried individuals 65+).
• Non-Freehold Estates include leasehold and leased fee estates.
• Leasehold estates are temporary possession of property to a tenant.
• Leased fee is the owner's interest in the property.
• Tenants pay landlords fees while the owner has a leased fee and freehold estate.
• Lease contracts transfer with property upon sale unless the lease says otherwise.

Types of Non-Freehold or Leasehold Estates

• Estates for years have a definite end date and can be for any amount of time.
• Estates from year to year are periodic and indefinite in duration, automatically renewing unless either party gives proper notice.
• Estates at will have an indefinite period, may terminate at any point without notice.
• Estates at sufferance occur when the tenant won't leave and the landlord must evict.

Types of Ownership

• Severalty is when one person or business owns 100% of the property. A sole owner can convey the property, and the property passes to the owner's heirs. If the owner is married, the spouse must sign listing contracts, purchase contracts, and the deed.
• Tenants-In-Common occur when two or more parties own a property, but ownership does not have to be equal.
• One tenant can encumber their interest in the property, but not the whole; all owners have an equal right of possession on one deed.
• An owner can will their share to an heir through probate, or sell their interest without approval.
• If one owner wants to sell and others don't, the owner must file a Suit for Partition to force a sale. The property share passes to heirs.
• Joint Tenancy requires the property to be purchased at the same time, from the same source, and each owner has the same level of ownership with laws varying by state, but joint tenants have the Right of Survivorship.
• When one joint tenant dies, their shares go to the other co-owners; you can't pass a joint tenancy to your kids, and a will cannot defeat joint tenancy. A joint tenant may sell their share, but the new tenant will own the stake as a tenant-in-common.
• An owner who wants to sell must file a Suit for Partition against the other owners to force a sale.
• NC does not favor joint tenancy, so an attorney must include specific language in the deed.

Tenancy by the Entirety

• Tenancy by the Entirety is limited to couples legally married at the time of purchase; even if the couple marries after the purchase, the deed will not change until they change it.
• It is the default ownership for married couples unless otherwise requested, and the property passes to the surviving spouse without probate. Wills do not defeat the Right of Survivorship and separated couples continue to own as Tenants by the Entirety.
• Divorce terminates Tenancy by the Entirety, and the property becomes owned as Tenants-In-Common, or one spouse may quitclaim to the other to transfer ownership.
• Both spouses own 100% of the property.
• Older couples with children from previous marriages may choose to avoid tenancy by the entirety, because it leaves shares of property to the other spouse rather than children.

Hybrid Ownership

• Condominium owners own wall to wall and their airspace and co-own common areas, and garages/storage may be an extra purchase.
• Owners pay property taxes, including the value of the common areas, and may be owned in severalty, tenants-in-common, or tenancy by the entirety.
• In a foreclosure, only the unit is foreclosed upon. Owners pay HOA dues, created by recording a declaration, and the buyer has 7 calendar days to rescind the contract without a penalty. Owners must provide a resale certificate outlining monthly common area expenses/fees, and may be residential, commercial, or industrial.
• Townhouses have a party wall easement of 50%; the HOA owns common area and the owner owns their unit and the land it sits on. Lienholders foreclose against the unit, not the entire complex.
• Coops: A corporation owns the property, and a buyer buys a share of stock and a proprietary lease, but the buyer does not own their unit overall. Shareholders pay fees to cover debt obligations, property taxes, and maintenance
• Timeshares must have the right to use the property for 5 non-consecutive periods over at least 5 years.
• Buyers can terminate within 5 days of the contract, and developers must keep money in an escrow account for 10 days.
• The Commission can fine $500 per occurrence for failure to follow timeshare act. A project broker supervises licensees like a BIC and nationally timeshares may be called vacation leases, interval ownership, prepaid hotel reservations, club memberships, limited partnerships, or vacation bonds.

Trusts

• Trusts hold property for a third-party beneficiary.
• Trustees make buy/sell decisions, so it is vital that a broker ensures that they are working with the trustee to transfer property because beneficiaries have no say.
• In Planned Unit Developments, owners hold title to the property, HOA or neighborhood fees are common, owners are members of the association that owns other areas of the development, and flexible zoning with more open space/rec areas is allowed.

Business Ownership

• A sole proprietorship has one owner with no limit to liability and doesn't need a firm license.
• General partnerships have two or more owners who may have employees or independent contractors. There is no limit to liability for general partners, liability is limited to the money in the business and income goes to the partner's personal tax return, but a separate firm license is required in NC.
• LLCs are a pass-through entity that avoids double taxation while limiting liability like a corporation; LLC owners do not lose personal assets to satisfy liabilities.
• Owners and managers can bind the entity to contracts, but requires a separate firm license in NC.
• Corporations are owned by shareholders that shield personal assets against corporate liabilities.
• C-Corps pay taxes at the corporate level, and shareholders pay taxes for dividends and distributions.
• S-Corps avoid double taxation while maintaining liability protection. Corporations require a separate firm license in NC, and directors must pass corporate resolutions to authorize the purchase or sale of real estate.

Encumbrances

• Encumbrances to Real Property include liens, easements, encroachments, deed restrictions, and restrictive/protective covenants.
• Easements are a nonpossessory right in the land of another that should ideally be in writing, but do not create an ownership interest.
• Easements can be express (agreed to) or implied (born out of action) and may form by adverse possession, operation of law through condemnation, or by the action of the parties out of necessity.
• Appurtenant easements create a dominant and servient estate, with the dominant estate getting the benefit and the servient estate getting the burden.
• Shared driveways are an example of appurtenant easements, and easements stay with the property.
• A merger of the lots terminates the appurtenant easement, and an easement by necessity becomes an appurtenant easement.
• Easement in Gross grants the right to use another's property without owning an adjoining lot (can be personal or commercial).
• Personal easement in gross allows activities such as hunting and fishing, and may terminate upon the death of the easement owner, and is not revocable for the life of the easement owner.
• Commercial easement in gross grants businesses or entities the right to install billboards, cellular towers, railroad tracks, or other utilities, and it can be assigned/conveyed, but does not automatically terminate in a bankruptcy, sale, or non-use.
• Easement by Prescription acquires property through hostile action where the taking party must meet HI OCEAN.
• HI OCEAN is hostile, intentional, open, continuous, exclusive, adverse, and notorious actions.
• Continuous possession must be for 7 years with color of title (mistaken belief someone owns that property), or 20 years without color of title, and a new owner can tack on to a previous owner's time establishing continuous use and also called a prescriptive easement or adverse possession with the claimant needing to file a suit to quiet title.
• The Torrens System protects registered property from adverse possession. The owner doesn't need to know someone has taken the land, as the owner is to monitor and act against squatters.

License Terms

• Licenses grant permission to use property for something like hunting, fishing, or crossing over. They are not assignable or inheritable, can be revoked/terminated at any time on the death of the property owner or by sale of the property.
• Termination of an easement occurs when the purpose no longer exists, or non-use of prescriptive easement, release by the dominant owner, expiration, or abandonment by dominant owner.
• Encroachment is when an improvement crosses the property boundary of another, and surveys discover encroachments, not title searches.
• Lis Pendens is a notice of pending litigation that prevents an owner from transferring property to another before the court decides the case, with the encumbrance being binding on future owners if the party wins against the current owner.
• Writ of Attachment is when a court orders the seizure of property to keep the owner from selling assets to pay a debt.
• Writ of Execution instructs a sheriff to sell the property.
• Red flags are when a broker should investigate further/recommend a principal client take action to find out about potential problems with a property.
• Deed restrictions are private land-use restrictions create defeasible estates, where limits may require the property to only be used in a certain way.
• Restrictive or protective covenants are private land-use restrictions that create conformity in a neighborhood outlined in a deed or separately recorded declaration, often with a Reminder Owner of Development (Builder of Subdivision) making CCR (Covenants, Conditions, and restrictions).

Covenants

• Covenants are enforced by an HOA or an owner in the neighborhood, and best practice is to first seek compliance while going through the HOA. The HOA or owner can seek court action through a suit for an injunction.
• Covenants run with the land, and can terminate with the agreement of 100% of the property owners or a lesser amount as outlined in the restrictions, and an HOA can lose the right to enforce if they fail to enforce beyond the statute of limitations.
• CC&Rs are covenants, restrictions, and conditions that are often more restrictive than zoning/planning restrictions, in which case the stricter of the two will apply. Restrictive covenants that violate current law should not be enforced.
• General liens are against all property, and Judgments are awarded by the court and become a lien once recorded (judgment liens in NC are good for 10 years unless re-recorded).
• Income tax liens may be state or federal and follow lien priority and personal property tax liens are liens on cars or other taxed property owned.
• Specific liens are against one property, including real property taxes allowed by The Machinery Act.

Property Tax

• Real property taxes attach on January 1 of current year and the city/county set tax rate by July 1 and mail the tax bill in August, where taxes are due Sept. 1 and late after Jan. 5 of the following year.
• Taxes are per $100 of assessed value (NC) ,and may change every year, but must change every 8 years (octennial reappraisal),with the potential for a 4-year horizontal reappraisal.
• The municipality's tax base/budget dictates the rate with all real property in NC being subject to taxation. NOTE: National property tax rates are expressed per thousand and referred to as a mills rate.
• Special assessments can be public or private, where financing documents such as mortgages/deeds of trust create financial liens specific to the property.
• Liens are recorded to create constructive notice and actual notice- and NC is a pure race state; the first to record a lien is the first to get paid- hence lien priority.
• Mechanic's Liens can jump in priority.
• If filed within 120 days of the last date of labor/materials being provided, there's a need to file suit to enforce the lien in 180 days from the last date of labor/materials, and properly filing lets the lien jump to the first day labor/materials were provided.
• In NC, projects exceeding 30K that are not the primary residence need the appointment of a lien agent and the contractor must file notice within 15 days of commencing work.
• In a typical sale, real property taxes and public special assessments are paid first, then liens in order of recordation.
• In a foreclosure, costs of sale are paid first, then real property taxes/public special assessments, then liens in order of recordation, except for Mechanics Liens and voluntary subordination of a superior lien.
• Property taxes are superior to all other liens, assessments, charges, rights, and claims.

Government Rights in Land

• Government Rights in Land include police power, eminent domain, taxation, and escheats.
• Police Power in Real Estate handles Zoning, Rezoning being a complex process, a variance is a small change. It also handles building codes.
• Eminent Domain is the right to condemn privately owned land for public use, with condemnation being the legal action.
• Escheats are the government's right to seize abandoned property when the owner dies intestate without heirs.
• Escheats won't apply when heirs are found after someone has died intestate, and if there are no heirs, the property will pass to the state.
• Legal non-conforming use is when zoning changes after a change in the use of a property, but the owner is not obligated to change back.
• Illegal Use is when a property violates zoning restrictions after the restrictions are in place.
• Specific use permits allow a development that will benefit the community, even in areas where zoning usually prohibits it.
• Overlay Districts add an additional layer of rules like flood zones and building restrictions to a certain area.

Subdivision Regulations

• Subdivision regulations require approval by city planning/ zoning or city council.
• Preliminary plat approval is needed to offer lots for sale, and sales can't close until final approval/final plat is recorded with the buyer unable to close on the sale for 5 days after final approval.
• The buyer may terminate the contract without breaching within 15 days if the lot materially changes from the preliminary plat.
• The roads in a plat may be public or private- ask the DOT.
• Perc tests are also called soil suitability tests.
• Metes and Bounds are clockwise and you must finish where you began or it is considered imperfect.

Metes and Bounds Terms

• Mete- Distance from point to point in a description.
• Bounds- Direction from one point to another.
• POB- Point of Beginning, sometimes called Point of Commencement.
• Monuments are fixed reference points, and if lost, effort is made to have a permanent reference marker.
• The Government Rectangular System includes 36 Sections in a Township, 640 Acres in a Section, and 43,560 square feet in an acre; Section 16 is typically for a school.
• Base Lines are - East to West, and Principal Meridians are- North to South.
• Plat book and page, reference to the recorded deed book and page, reference to the property tax ID, reference to the lot and block are the most common methods to identify property.
• Property surveys will show buildings, setbacks, easements, and encroachments. Purchasers should conduct a survey before closing.

Agency

• Customers are parties to the transaction who have not hired the broker or the broker's firm. They are owed HFD (honesty, fairness, and disclosure).
• Clients have a signed agreement with the broker's firm and are owed OLD CAR.
• OLD CAR is Obedience of lawful instructions, loyalty, disclosure, confidentiality, accounting, and reasonable skill/care/diligence.
• The pricinpal or client, owes the firm cooperation, truthfulness, and compensation.
• Principals can be held liable for the actions of their agent.
• Obedience of lawful instructions means to follow the client's lawful instructions and disclose material facts and brokers will not violate housing laws.
• Refusing to show offers less than $XXX,XXX, or ordering the broker to not tell potential buyers that the roof leaks, etc. are unlawful instrucitons.

Types of Agency

• Universal agency has POA and may sign as the customer; can be called "attorney-in-fact."
• General agency has a broad range of authority, signing agency agreements on behalf of the brokerage and binding property owners to lease agreements.
• Special agency has the buyer/seller exclusively making all decisions.
• The WWREA (Working With Real Estate Agents) disclosure is given to all residential and commercial sales parties at first substantial contact; not used in property management or leasing.
• Initial contact is when they identify who they work for, and first substantial contact is when the conversation shifts from what/Joanna is saying, and shouldn't share anything they don't want used against them in negotiations.

Subagency

• In NC, licensees must work for someone in the transaction.
• If buyers will not hire them, they work for the seller, so the buyer is a customer and not a client.
• Agency agreements belong to the firm, not the broker.
• In multi-agent firms, if the broker leaves, the client stays with the firm.
• If the broker of a sole prorietorship firm dies, the agreement dies.
• The types of agent include buyer's agent, seller's agent, dual agent, designated dual agent, or subagent.

Agency Relationships

• Single Agency occurs when the firm represents only the buyer or seller with the broker as a coach.
• Dual Agency is when one broker represents both buyer and seller (broker is neutral) and Designated Dual Agency is when the BIC appoints brokers to represent buyer/seller.
• In dual agency, brokers may not advise or counsel because helping one party hurts the other.
• In designated dual agency, there is no BIC/PB in designated dual transactions, and no personal/confidential information may be known by the broker appointed to represent the customer.
• Listing agreements are in writing from inception.
• Both buyer and seller must agree to dual agency or no broker from the listing firm may show their property to a buyer client or buyer customer.

Agency and Contracts

• Buyers and sellers can change their minds about dual agency, but brokers must have consent from both parties to engage in dual agency.
• Brokerages may not offer dual/designated dual agency.
• Agency agreements that are in writing from their inception are listing agreements, property management agreements, and other agreements that are exclusive

Written Agency Agreements

• Written agency agreements must be in writing with discrimination language, the license number, list price, and abiding by Rule A.0104.
• The Commission does not create the forms. They are prepared by the NC Association of Realtors and the NC Bar Association.
• Agency agreements that may be oral at inception are buyer agency agreements and tenant representation agreements.
• Buyer agency agreements must be in writing if brokers/buyers seek exclusivity in NC, reduced to writing before making an offer and the firm seeks compensation from seller before seeking payment from the buyer client.
• If the seller is not paying enough to compensate the buyer's agent, the buyer is responsible for making up the difference.
• Listing agreements obligate brokers to ask potential sellers to gather property information before presentation, but not look at it until the seller hires them.
• Listing agreements must be in writing, have a definite end date, and include fair housing language with all owners signing to avoid potential issues.
• Agreements should state the price, legal description, commission rate, commission calculation, and the listing price must occur before the seller signs the listing contract.

Commissions

• Buyer commissions typically come from the seller, but if there is a shortfall, the buyer is expected to make up the difference, and buyers must understand this relationship.
• Retainer fees are paid upfront and may or may not be credited at closing while success fees are payable upon acceptance of an offer and paid at closing.
• Commission is earned when the listing broker finds a ready, willing, and able buyer on terms acceptable to the seller, and this earning depends on the license in good standing, a valid contract, and acceptance of the offer.

Listing Agreements

• Brokers should ask potential sellers to gather property information before presentation, but not look at information until the seller hires them.

Fair Housing

• Brokers must ask potential sellers to gather property information before presentation, but they should not look at the information until the seller has approved them.
• Listing agreements must be in writing from inception, include a definite end date, and contain fair housing language.
• All owners must sign to avoid potential issues.
• Agreements should state the price, commission rate, legal despription of property, and how commission will be calculated.
• The listing price is set before the seller signs the contract.
• Retainer fees are paid upfront, while success fees are payable upon offer acceptance and paid at closing.
• Additional compensation can be disclosed orally before buyers make an offer/ in writing before the offer is presented.
• Listing agreements are brokerage contracts stating compensation terms, property information, and permissions, such as for lockboxes or yard signs.

Types of Listing Agreements

• In an open listing, the agent competes vs other agents and the seller. The agent bringing the buyer is paid unless the seller finds the buyer.
• With an exclusive agency listing, the agent competes with seller- and if the seller finds the buyer, they don't have to pay the agent.
• Exclusive right to sell gives the most assurance of a broker getting paid. No matter who brings the buyer, the firm and agent are guaranteed the commission, and the listing broker gets paid if the property is sold, exchanged, or transferred.
• With net listings, the seller/broker decide the required sales price, with the broker paid only what is above that target.

Agency Relationship Termination

• Terminations occur by close, death of the seller/buyer, destruction of property, operation of law or mutual agreement.
• Protection periods are a set period after the listing expires, giving the broker who originally listed the property commissions if someone that viewed the home during that time buys it.
• Protection periods are also called extension clauses, override clauses, or tail clauses.
• Licensee is the same as broker or agent, responsible broker is a Broker-In-Charge, and an affiliated or associate broker is affiliated with a firm.
• Provisional brokers are also called salespeople.

RPOADS & Property Sales in NC

• Property sales in NC require sellers to give the buyers RPOADS unless it is a new construction, foreclosure, transfer between co-owners, or buyers already have possession.
• Sellers don't need to disclose property conditions, but agents/brokers do. Agents should explain the property disclosure form to principals, but not fill them out.
• Buyers can terminate the contract and get a full refund of earnest money/due diligence if they are not provided with the RPOADS no later than the time the buyer makes an offer to purchase the property.
• If buyers opt to cancel, it must be the earlier of 3 calendar day from the receipt or the contract date, but once they move into the property it is too late.
• Puffing is exaggeration or subjective claims that don't verify.
• A Mineral, Oil, and Gas Disclosure (MOG) is required in the sale of new construction/residential properties.
• Failure to disclose/giving false information can be classified as willful, negligent, as a misrepresentation, or as an omission.
• Willful misrepresentation is a listing agent agreeing with buyers that HOA dues are set for 3 years if they know they are rising.
• Willful Omission occurs if that claim wasn't accurate.
• A Caveat Emptor policy says buyers are responsible for doing their own diligence.

Material Facts

• Material facts would effect a seller's or buyer's decision to close.
• Facts include property condition (leaks, cracks etc), zoning changes, HOA fees, area ordinances, chool zone, busy bus stop, pending foreclosure, meth labs and Short sales, Environmental conditions
• Deaths, suicides, violent crimes, or illness of prior owner are not material facts.
• Stay factual and stick to property facts.

Environmental terms

• Asbestos were used in insulation, siding, or tiling before 1978, and is a problem if friable and may cause cancer/mesothelioma. The best way to deal with asbestos is encapsulation
• Some mold is toxic, requires remediation and testing.
• French drains, pumps, fans, and dehumidifiers can deal with moisture.
• Environmental remediation by a structural engineer is the best way to evaluate possible hazards and proceed with fixing them.

Fair Housing

• The Civil Rights Act of 1866 bans race discriminiation and is enforced by private lawsuit. Buyers are free to refuse but licensees CAN'T participate.
• The Fair Housing Act bans discrimination for familial status, race, sex, handicap, color, religion, national origin.
• HUD hears complaints and fines $16K for 1st offense, $65k continued, increasing to $100k after for pattern of violations.
• Fair housing complaints and violations are punishable by up to $100,000 in fees if someone doesn't show up.

Housing Exemptions

• Exemptions to fair housing complaints can be retirement communities (55 or 62+), large families, owners who don't own more than 3 homes. If homes are owner-occupied then they can discriminate (Not renting to undergrads because their space is tight), private organizations for members, and private, non- discriminatory, organizations.

Fair Housing: What To Do

• Discuss property, not renters. Don't talk about ideal renter or exclude any classes.
• NC Fair Housing laws has no exemption for FSBO.
• Under federal law there are stricter guidlines thanNC where an owner discrimination for renting 1-4 units and has themselves are living in the house or a relative is living there. Single sex dorms are okay.
• In NC, a complaint must reach the commission in a year, determination reached in a 100 days of receiving.
• Americans with Disabilities Act deals with physical or mental needs, businesses must cater access for consumers. Fineable by ADA compliance. Apartments with +4 must have access and real estate locations.

Rent Accommodations-ADA

• Landlords are responsible for letting renters make needed changes. Example is installing a ramp.
• Landlords may need to adapt their operations or modify physical structures and are responsible for letting disabled tenants make reasonable changes to a property, however, this comes at tenant or renter's expense.
• If protected classes don't meeet rental standards, it may not discriminiation if the rule applies to everyone
• Blockbusting is inciting panic based on demographic changes.
• Redlining is refusing to tend within an entire area rather than a tenant's qualifications. This is illegal.
• Disparate impacts mean policies and procedures that disproportionally effect a protected group.
• Formulas are width x length, acreage calculations, and price estimates.
• Square footage estimates involve the area equation and area by linear feet.

Square Footage

• If uncertain, it is wise to hire a professional. Licensees are not required to publish sf in NC.
• Don't rely on information apart from own measurement for square footage, follow guidelines and record extior measuremtns and use exterior always, else add more to an interior size.
• A livable size must be 7' minimum. This drops to 6'4" if under a beam or struct, such as plumbing.
• Spaces should be heated, completed and have direct access to livable space. The garage area is labelled 'Other Space'"
• Square footage estimates also include deducting spaces, but don't deduct utility spaces.
• Estimate triangles on base/half heigh, with staircase factored on both levels.

Home Financing

• A lien is the right to claim a debt, not an asset's ownership. Real estate buyers pledge assets to get loans from lenders, and hypothecation means pledging an asset for debt security.
• OR= Buyer/mortgagor, Obligor, Trustom, EE= Banker/mortgagee,