Facing Discipline as a North Carolina Real Estate Agent or Broker

In North Carolina, all real estate agents and brokers must comply with both (i) the North Carolina Real Estate License Law and (ii) the North Carolina Real Estate Commission Rules. Failure to comply can have serious consequences, including facing discipline from the North Carolina Real Estate Commission.

Grounds for Discipline By the North Carolina Real Estate Commission

The following is a non-exhaustive list of possible grounds for agents and brokers to face discipline from the North Carolina Real Estate Commission:

1. Misrepresentations and Omissions

North Carolina Real Estate License Law (the “License Law”) prohibits agents and brokers from making misrepresentations about or omitting material facts. This includes both intentional and negligent misrepresentations and omissions regarding:

• Facts about a property itself (such as structural or mechanical issues)
• Facts relating directly to a property (such as pending zoning changes)
• Facts relating directly to the ability to close a transaction (such as

2. Making False Promises

In addition to prohibiting factual representations and omissions, the License Law also prohibits agents and brokers from making false promises “of a character likely to influence, persuade or induce” action by any party to a prospective transaction. Importantly, the License Law may consider a promise to be a “false promise” even if the agent or broker intended to honor it at the time it was made.

3. Conflicts of Interest

It should come as no surprise that conflicts of interest are a major point of concern in both commercial and residential real estate transactions. Some examples of prohibited conflicts include:

• Undisclosed dual agency
• Self-dealing
• Representing multiple brokers without consent

4. Improper Brokerage Commissions

The License Law prohibits brokers from paying commissions for: (i) acts or services that violate the License Law, and (ii) acts that require a real estate license when performed by an unlicensed individual.

5. Unworthiness and Incompetence

Agents and brokers can also face discipline for any acts that reflect unworthiness or incompetence in connection with a real estate transaction. This includes, but is not limited to, acts that violate the License Law. Some examples include:

• Failing to use legally-adequate contract forms
• Failing to diligently meet the obligations of a listing agreement
• Failing to provide accurate closing statements to buyers or sellers

6. Discriminatory Practices

The State Fair Housing Act prohibits discriminatory practices in housing and real estate-related transactions. Violations of the State Fair Housing Act are also deemed violations of the License Law.

7. Practice of Law

Finally, real estate agents and brokers must exercise caution not to engage in the unauthorized practice of law. Examples of prohibited conduct include:

• Drafting deeds, leases, sales contracts and other legal documents
• Providing opinions as to legal title
• Providing legal advice regarding a real estate contract or the means of holding title to real estate

For more information, the North Carolina Real Estate Commission has published a resource entitled License Law and Rule Comments that provides examples of agent and broker misconduct. You can also contact a Raleigh professional license defense attorney at Cheshire Parker Schneider & Bryan, PLLC for a confidential consultation.

Schedule a Confidential Consultation at Cheshire Parker Schneider & Bryan, PLLC

If you are facing discipline from the North Carolina Real Estate Commission or have questions about your obligations as a real estate agent or broker in North Carolina, the attorneys at Cheshire Parker Schneider & Bryan, PLLC can help. To speak with a professional license defense attorney in confidence, call (919) 833-3114 or contact us online today.