Nc license law

Question 1

What is the first point at which a provisional broker may begin practicing real estate in North Carolina?

Answer 1

when the NCREC receives notification of the provisional broker’s activation with a BIC

Question 2

An unlicensed assistant may do all of the following activities, EXCEPT:

a.Assist the licensee with administrative duties and tasks
b.exhibit units for rent and provide tenants with information about the lease agreement
C.exhibit homes that are for sale and show the buyer around the home
D.fill in preprinted lease agreements and collect monies from prospective tenants, as long as the employee does not negotiate rents

Answer 2

C.exhibit homes that are for sale and show the buyer around the home

Unlicensed property management assistants are permitted to show rental properties to prospective tenants, however, we do not allow unlicensed assistants to show homes or conduct open houses in residential sales.

Question 3

With regard to timeshares, all of the following are true, EXCEPT:

A.A timeshare developer and broker must maintain records of sales, rentals or exchange transactions for a minimum of three years.
B.All monies received by a timeshare developer or broker must be deposited within three banking days of receipt and remain in the trust account for ten days from the date of sale or until cancellation by the purchaser, whichever occurs first.
C. Timeshares are not considered real estate and no license is required to sell time shares in North Carolina.
D.Any refunds due to a cancellation of a timeshare purchase will be refunded within 30 days following the date of execution of the contract.

Answer 3

C. Timeshares are not considered real estate and no license is required to sell time shares in North Carolina.

You must be licensed to sell timeshares in North Carolina. All of the other answers are correct regarding the handling of funds and monies concerning timeshares.

Question 4

Which of the following statements is true about timeshares?

They do not have to be registered with the NC Real Estate Commission.

They may be transferred prior to registering with the NC Real Estate Commission.

They must be registered with the NC Real Estate Commission prior to sale.

The timeshare broker may be fined by the NC Real Estate Commission.

Answer 4

They must be registered with the NC Real Estate Commission prior to sale.

Question 5

All of the following statements are correct regarding the NCREC, EXCEPT:

They shall be entitled to the services of the Attorney General of North Carolina.

They shall not make rules or regulations regulating commissions, salaries, or fees to be charged by licensees.

They shall make rules to allow a licensee to pay a travel agent who does not have a real estate license a referral fee.

They shall have the power to make reasonable bylaws, rules and regulations that are inconsistent with the provisions of the general statutes.

Answer 5

They shall have the power to make reasonable bylaws, rules and regulations that are inconsistent with the provisions of the general statutes.

Their bylaws, rules and regulations must be “consistent” with the general statutes. It is true that the NCREC can use the services of the Attorney General. It is also true that they do not regulate the commissions or fees charged by licensees. Though referral fees generally cannot be paid to unlicensed people, the payment of a referral fee to a travel agent is the exception to the rule and is permitted.

Question 6

It is correct to say that the NC Real Estate Commission may not fine a real estate licensee. However, the NC Real Estate Commission may do which of the following?

Answer 6

fine a timeshare developer up to $500 per violation of the Timeshare Act

Question 7

General Statute 93A-2 states, in part, that a real estate broker is any person who, for compensation or valuable consideration or the promise thereof, lists or offers to list property. All of the following would constitute valuable consideration, EXCEPT:

a listing agent is promised a weekend trip to Myrtle Beach if the agent puts the home under contract before the end of the year

the owner of a jewelry store gives his buyer’s agent a diamond bracelet as a way of saying thank you for the agent’s hard work

a butcher offers a year’s supply of top sirloin to his agent if they can purchase an investment property for 50% off the asking price

the neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you

Answer 7

the neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you

Brokerage activities are defined as acting on behalf of another for compensation. These nominal items would not be considered compensation or valuable consideration. However, vacations, trips, expensive jewelry and expensive food would all be considered valuable.

Question 8

All of the following could result in disciplinary action by the NC Real Estate Commission for unworthiness or incompetence, EXCEPT:

making any willful or negligent misrepresentation

pursuing a course of making false promises

accepting commissions or valuable consideration as a provisional broker from any person other than your Broker In Charge

Attempting to take all of the post licensing courses in a single year

Answer 8

Attempting to take all of the post licensing courses in a single year

There is a list of reasons why a licensee can be disciplined in Statute 93A-6. A provisional broker may always elect to complete post licensing classes on an earlier schedule than that required by the Commission

Question 9

A provisional broker is subject to two separate education requirements. They must complete postlicensing education of 90 hours within 18 months from the date of licensure. When must a provisional broker complete their first 8 hour CE requirement?

Answer 9

Prior to the 2nd renewal of their real estate license

Question 10

A nonprovisional real estate licensee is on inactive status. They are NOT holding themselves out to be available to help others buy, sell, rent or auction property. A friend asks for their help in a real estate transaction. Which of the following is TRUE?

Because they did not actively advertise or solicit the business the licensee may assist their friend, but they will have to be paid directly, not through the brokerage firm.

The agent may assist their friend so long as they activate their license before the transaction closes and they are paid.

an agent who’s license is inactive may not earn any fees or represent others in a real estate transaction.

Because the agent is a full broker they are not required to affiliate with a BIC and therefore the licensee may represent their friend and collect a fee.

Answer 10

an agent who’s license is inactive may not earn any fees or represent others in a real estate transaction.

A licensee on inactive status may not earn any fees or be involved in brokerage activities. The commission is concerned with the status of the license at the time the money was earned, not when it was received.

Question 11

In the event that a licensee’s annual renewal fee is returned unpaid, the North Carolina Real Estate Commission may take all of the following actions, EXCEPT:

deny licensure renewal
suspend the agent’s license
revoke the agent’s license
fine the agent

Answer 11

fine the agent

Question 12

All of the following would constitute an illegal action by an inactive licensee who is not affiliated with a firm, EXCEPT:

telling members of a networking club that they are a broker and offering members of the club their services

handing out business cards at a social gathering

telling a new acquaintance that they are a broker, but they are on inactive status

hosting an open house for another agent

Answer 12

telling a new acquaintance that they are a broker, but they are on inactive status

Question 13

Which of the following do not need a real estate license to sell property?

corporation that owns property and is using an employee to sell the property

an auction house that deals in the sale of real property

an attorney who regularly and routinely assists others in the buying and selling of real property

an unlicensed assistant sitting in an open house

Answer 13

corporation that owns property and is using an employee to sell the property

A real estate license is never needed when handling your own property. A corporation’s W2 salaried employees who are not paid on a commission basis are considered as dealing with the corporation’s own property, therefore do not need a license.

Question 14

Which of the following is INCORRECT about the post licensing requirement of a provisional broker?

the due date of the post licensing education is the anniversary date of licensure

post licensing consists of three 30 hour courses which may be taken in any order and must be completed within 18 months of obtaining license

post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th

if a provisional broker does not complete post licensing by the deadlines their license will become inactive

Answer 14

post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th

This is the rule for continuing education courses, not post licensing.

Question 15

If a provisional broker fails to complete all three postlicensing courses within 18 months of obtaining license, what is their license status once the anniversary date passes?

Answer 15

inactive

Question 16

If a licensee does not pay their renewal fee on or before June 30 of the year, what is the time period for the licensee to reinstate their license without the imposition of additional educational requirements?

Answer 16

6 months

Question 17

If an active provisional broker pays their renewal fee before their second renewal, but does not take their 8 hours of continuing education before their second renewal, what is their license status on July 1st?

Answer 17

inactive

Question 18

A corporation selling its own properties through the actions of its own salaried W2 employees:

is not required to have a firm license, but may not use its own employees

can use its own unlicensed employees, but must have a firm license

needs neither a firm license nor do its employees need to be licensed

need not have a license, but must affiliate with an NC broker-in-charge

Answer 18

needs neither a firm license nor do its employees need to be licensed

Question 19

In regard to real estate fees and commissions between brokerages and clients what is the role of the North Carolina Real Estate Commission:

only sets maximum limits on the fees and commissions

has no role in fees or commissions

only becomes involved when a complaint if filed

regulates the commissions exchanged between brokers, but not those exchanged with clients

Answer 19

has no role in fees or commissions

Question 20

All of the following are correct statements about the composition of the NCREC, EXCEPT:

there are 9 appointed members of the NC Real Estate Commission

the chairman of the Commission is elected by the Commission members

commission members serve 5 year terms

there are at least three licensees and at least two laypeople serving on the commission

Answer 20

commission members serve 5 year terms

Question 21

All of the following are required in order to obtain a NC real estate license, EXCEPT:

high school diploma

age of at least 18

completing an application

successfully completing a 75 hour course and passing a school final examination

Answer 21

high school diploma

Question 22

All of the following are true when a real estate license is inactive due to a CE deficiency, EXCEPT:

the licensee must cease all real estate activity as of July 1st

the licensee may not earn any commissions or referral fees while inactive

if the inactivity is for longer than 5 years the license will be considered expired

a licensee who is inactive due to CE deficiency more than

2 years must complete current year’s CE and 2 postlicensing courses

Answer 22

if the inactivity is for longer than 5 years the license will be considered expired

Question 23

Which of the following must have a NC real estate license?

The executor of an estate selling their parent’s property and receiving a fee as the executor

An investor who is purchasing rental properties and placing them back on the market for sale

auctioneer

A crier of sales

Answer 23

auctioneer

Question 24

All of the following are requirements of licensure for a NC Real Estate license, EXCEPT:

Possess a social security number

Be a United States citizen or possess proper documentation

File a complete application and fee

Be a resident of North Carolina

Answer 24

Be a resident of North Carolina

Question 25

An unlicensed individual who transacts real estate for another or participates in the sale, lease or exchange of another for compensation is subject to which of the following penalties?

They will likely be issued a cease and desist order

They are guilty of a misdemeanor

They are subject to a fine of up to $10,000

They are subject to civil sanctions and a civil lawsuit

Answer 25

They will likely be issued a cease and desist order

Practicing real estate and operating as a real estate agent without a license is a felony.

Question 26

An individual licensed in another state may receive a waiver of the NC education requirement to complete the 75 hour Broker Prelicense course if they meet which of the following criteria:

Answer 26

Successful completion of another state’s prelicense course of at least 75 hours within the last 3 years.

Question 27

Judy is an unlicensed individual. Her parents are selling their own home as For Sale by Owner without the representation of a real estate licensee. While her parents are on vacation, Judy shows the home to some interested potential buyers and has long conversations with them about the conditions under which they may purchase her parent’s home. Judy’s parents do not pay her in cash but instead offer to send on an upcoming vacation. Is Judy in violation of NC Licensing Law?

No because the home is her parent’s own property and it is therefore exempt from the licensure requirement.

No, because Judy did not receive any cash payment for her activity.

Yes, Judy is engaged in the business of real estate without a license

Yes because Judy is legally required to obtain a power of attorney from her parents in this instance.

Answer 27

Yes, Judy is engaged in the business of real estate without a license

Question 28

Henri is the manager and owner of his own LLC. He has a full time salaried staff person, Sheila, that he employs to work for his LLC. Henri’s company is buying homes, renovating them and putting them back on the market. He has Sheila show the properties to prospective buyers. Who is in violation of NC Licensing Law?

Answer 28

Neither Henri nor Sheila

There is no license law violation. Both the managers of the LLC and the W2 employees are exempt when dealing with property in the name of the LLC

Question 29

All of the following are TRUE about the character issue of an applicant for a NC Real Estate License, EXCEPT:

an applicant must possess honesty, integrity and good moral character

a mandatory criminal background check is required

the Commission makes a character determination before an applicant is permitted to take the NC Licensing Examination

an applicant has 60 days to request a hearing if the Commission determines that they do not possess satisfactory character

Answer 29

the Commission makes a character determination before an applicant is permitted to take the NC Licensing Examination

Question 30

How long is an applicant’s Examination Eligibility Period to take the NC Real Estate Examination once the Commission has approved their application

Answer 30

180 days

Question 31

All of the following require the refiling of an applicant’s application for a NC Real Estate license, EXCEPT:

If the applicant delays taking the examination until after the 180 expiration of their examination eligibility period

If the license was expired for a period of more than 6 months

If the license was surrendered or revoked for any period of time

If the license was inactive for more than 2 years

Answer 31

If the license was inactive for more than 2 years

Question 32

An applicant will forfeit both their examination and license application fees and their license will be canceled for all of the following, EXCEPT:

Failure to take the examination within the 180 day period

Failure to appear for an examination appointment as scheduled

Attempting to reschedule an examination appointment

Appearing more than 15 minutes late for a scheduled examination appointment

Answer 32

Attempting to reschedule an examination appointment

Question 33

A NC provisional broker’s real estate license is initially issued on what type of status?

Answer 33

inactive

Question 34

So long as it is part of his or her duties, is it legal for an unlicensed assistant to solicit listings for the broker?

Answer 34

No, active participation in soliciting real estate business requires a real estate license

Cold calling, prospecting and soliciting of real estate business requires a license. An unlicensed assistant may schedule appointments, but they cannot solicit or cold call for business.

Question 35

When a corporation is involved in the sale or leasing of property that is owned by the corporation, who is exempt from the requirement to possess a real estate license?

Answer 35

The corporation’s officers, directors and all W2 salaried employees are exempt from licensure

Question 36

All of the following are considered exempt from licensure and considered to be dealing with their own property, EXCEPT?

the general partners of a partnership

the managers of an LLC

the officers, directors and W2 salaried employees of a corporation

a sole proprietor and their W2 salaried employees

Answer 36

a sole proprietor and their W2 salaried employees

Only the sole proprietor would be exempt. No exemption would apply to the W2 salaried employees of a sole proprietorship, an LLC or a partnership

Question 37

A provisional real estate broker must remove the provisional status of their license by taking 90 hours of post licensing courses. The 90 hour courses are divided into three 30 hour courses. When must these courses be complete?

Answer 37

within 18 months of initial licensing

Question 38

A provisional broker obtains their NC real estate license on April 15th and joins a real estate firm. In order to remain active, the broker must pay the renewal fee to the NC Real Estate Commission on or before:

Answer 38

June 30 of the current year

Although provisional brokers are not required to complete any CE until the 2nd renewal of their license, they must still renew the license on June 30th. This is accomplished by going to the NCREC website, filing the form and paying the renewal fee.

Question 39

All of the following are powers of the NC Real Estate Commission, EXCEPT:

to conduct announced or unannounced audits of licensees

to subpoena the books, records and bank statements and accounts of a licensee

to seek injunctive orders in court

to order licensees to make restitution to clients and levy fines

Answer 39

to order licensees to make restitution to clients and levy fines

Question 40

In North Carolina under the Residential Property Disclosure Act, sellers of 1-4 unit residential properties must complete a MOG (Mineral, Oil & Gas Disclosure). The purposes of this law include all of the following, EXCEPT:

to require sellers to disclose to buyers if mineral, oil and gas rights have been severed from the property.

to prevent sellers from severing mineral, oil and gas rights from a property

to require sellers to disclose to buyers if mineral, oil and gas rights have been leased separately.

to inform buyers if the seller does not intend to transfer mineral, oil and gas rights.

Answer 40

to prevent sellers from severing mineral, oil and gas rights from a property

Mineral, oil and gas rights to real estate can always be sold or leased separately from a real estate transfer. The requirement is one of disclosure and does not prevent the seller from severing such rights.

Question 41

All of the following are true under the NC Condominium Act, EXCEPT:

the units are usually separately taxed and assessed

there must be a unit owner’s association prior to the transfer of the first unit

a unit owner is prohibited from ownership of land and must take only title to their individual unit.

if the buyer cancels within the 7 day rescission period all money must be returned promptly with no penalty

Answer 41

a unit owner is prohibited from ownership of land and must take only title to their individual unit.

Question 42

In a NC condominium project, only certain owners have reserved parking spaces and garages. Under the NC Condominium Act, these areas would be known as:

Answer 42

Limited condominium areas

Question 43

All of the following are true of a project broker within a NC Time Share, EXCEPT:

the project broker is designated by the developer or owner of the time share

the project broker must be an actively licensed broker

a provisional broker may serve as a project broker

the project broker is responsible for supervision and management of the time share project and all licensees that are associated with the project

Answer 43

a provisional broker may serve as a project broker

Question 44

All of the following are TRUE if a time share is not properly registered in NC and a public offering statement is not provided to a buyer prior to contract under the NC Time Share Act, EXCEPT:

the purchaser has a five day rescission period to cancel their purchase without penalty

it is a felony to not register the units

the purchaser may be entitled to a penalty of 10% of their purchase price or $3,000 whichever is greater

the buyer and the developer may agree to waive both the 5 day cancellation period and the providing of a public offering statement.

Answer 44

the buyer and the developer may agree to waive both the 5 day cancellation period and the providing of a public offering statement.

Question 45

How long does a provisional broker have to activate their license from the date of licensure?

Answer 45

there is no required time period for license activation

There is no required time frame for a provisional broker to activate their license. A licensee may remain on inactive status indefinitely.

Question 46

Can a real estate licensee renew an inactive license?

Answer 46

Yes, because that will prevent the license from being expired

Question 47

Under the NC Mechanic’s Lien statute an owner of property must designate a mechanic’s lien agent (MLA) under which of the following situations?

an owner who is making improvements to public buildings

the improvements are less than $30,0000

the improvements are to a primary residence

a new roof is being placed on a vacation rental unit that costs $42,000

Answer 47

a new roof is being placed on a vacation rental unit that costs $42,000

An mechanic’s lien agent is designate by the owner of the property to receive notice of the lien. This is not required for improvements to a primary residence or when the improvements are less than $30,000. Because these improvements are not to a primary residence and exceed $30,000 a lien agent must be designated under the statute

Question 48

The NC Homestead Exemption would be of importance and have the greatest impact on:

a borrower who is in default on their property and facing foreclosure

an individual who filed bankruptcy due to excessive medical bills and judgment liens

an investor who must engage in the short sale of an investment property

a married couple who is selling their primary residence to a buyer

Answer 48

an individual who filed bankruptcy due to excessive medical bills and judgment liens

The NC homestead exemption applies to personal residences and provides protection against judgment creditors

Question 49

Jack is a licensed real estate professional in Illinois. He has been a broker for many years, but is not licensed in NC. Jack has a friend who wants to purchase a home in Charlotte, NC. In regard to the representation of this buyer all of the following are TRUE, EXCEPT:

Jack may refer the buyer to a licensed NC broker and receive a referral fee even though he is not licensed in NC.

Jack may meet with the buyer in Illinois and explain the purchase process and answer questions about the NC transaction.

So long as Jack affiliates with a NC broker he may accompany the buyer to North Carolina and assist in showing the buyer property

The NC real estate commission does not have jurisdiction over Jack unless Jack conducts illegal brokerage activities in NC

Answer 49

So long as Jack affiliates with a NC broker he may accompany the buyer to North Carolina and assist in showing the buyer property

An out of state licensee cannot set foot in NC and participate in the real estate transaction without having a NC real estate license

Question 50

Sherry is a provisional broker who works for a residential sales BIC and firm in North Carolina. Sherry has a couple of clients who want her to manage their rental properties. What are Sherry’s options?

Sherry can manage the properties on her own outside of her existing firm

With the permission of her BIC Sherry can also affiliate with another firm that engages in property management.

Sherry can manage the rental properties only if she obtains a power of attorney from the owners.

Sherry can refer the clients to a property management firm and earn a referral fee that is paid to her through her BIC

Answer 50

Sherry can refer the clients to a property management firm and earn a referral fee that is paid to her through her BIC