Key Takeaways
- NCREC can suspend, revoke, or reprimand licensees for violations of license law
- Common violations include trust account mishandling, failure to disclose material facts, and misrepresentation
- The NC Real Estate Recovery Fund compensates victims when licensees cannot pay judgments
- Licensees have the right to a hearing before discipline is imposed
- Practicing without a license or while license is inactive is a criminal misdemeanor
Last updated: January 2026
License Law Violations and Discipline
NCREC has authority to discipline licensees for violations of the Real Estate License Law and Commission rules.
Types of Violations
Common Violations
| Category | Examples |
|---|---|
| Trust Account | Failure to deposit timely, commingling, conversion |
| Disclosure | Failure to disclose material facts, agency status |
| Misrepresentation | False statements about property or terms |
| Supervision | BIC failing to supervise provisional brokers |
| Advertising | Misleading ads, failure to identify firm |
| Unauthorized Practice | Practicing with inactive license |
| Competence | Failure to provide competent service |
Specific Prohibited Acts Under N.C.G.S. 93A-6
- Making false statements to obtain a license
- Unworthiness or incompetence to act as broker
- Dishonest or fraudulent conduct
- Failure to account for funds
- Commingling client funds with personal funds
- Acting as undisclosed principal in a transaction
- Conviction of crime showing unfitness
- Improper advertising
- Violating fair housing laws
- Making false promises likely to influence
Disciplinary Actions
Available Sanctions
| Sanction | Description |
|---|---|
| Reprimand | Official warning on record |
| Probation | License conditions imposed |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Denial | Refusal to issue/renew |
| Education | Required additional training |
Disciplinary Process
Investigation
NCREC initiates investigations based on:
- Consumer complaints
- Referrals from other agencies
- Audit findings
- Self-reporting
Due Process Rights
Licensees have rights including:
- Written notice of charges
- Opportunity for hearing
- Legal representation
- Present evidence and witnesses
- Appeal adverse decisions
Hearing Process
| Stage | Description |
|---|---|
| Notice | Written notice of charges |
| Response | Licensee may respond |
| Hearing | Before Commission or ALJ |
| Decision | Commission issues final order |
| Appeal | May appeal to Superior Court |
NC Real Estate Recovery Fund
The Real Estate Education and Recovery Fund compensates victims of licensee misconduct:
Fund Details
| Feature | Detail |
|---|---|
| Maximum per transaction | $50,000 |
| Maximum per licensee | $75,000 |
| Source | Portion of license fees |
| Condition | Court judgment required; licensee unable to pay |
Fund Process
- Victim obtains court judgment against licensee
- Licensee cannot pay judgment
- Victim applies to Recovery Fund
- Fund pays within limits
- Licensee's license is suspended until fund is reimbursed
Consequence: If the Recovery Fund pays a claim, the licensee's license is automatically suspended until full reimbursement plus interest.
Criminal Violations
Unlicensed Practice
| Offense | Penalty |
|---|---|
| Practicing without license | Class 1 misdemeanor |
| Aiding unlicensed practice | Class 1 misdemeanor |
| Practicing with inactive license | Violation of license law |
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Test Your Knowledge
What is the maximum amount the NC Real Estate Recovery Fund can pay per transaction?
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Test Your Knowledge
What happens if the NC Recovery Fund pays a claim against a licensee?
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