Bill Summaries: H865 (2017-2018 Session)

  • Summary date: Apr 20 2017 - View summary

    Amends GS 93A-16 (Real Estate Education and Recovery Fund created; payment to fund; management). Changes subsection (a), establishing that the Real Estate Education and Recovery Fund must be used as provided in Article 2 for the payment of unsatisfied judgments where the aggrieved person or community association (currently, only provides for an aggrieved person) has suffered a direct monetary loss by reason of certain acts committed by any real estate broker. Specifies that any real estate broker includes a broker acting as a community association property manager.  

    Enacts new Article 7 (Community Association Property Management) in GS Chapter 93A. Gives the North Carolina Real Estate Commission (Commission) the power to administer the Article and adopt rules. Exempts from the provisions of the Article, when not acting as an agent of a community association manager or community association management company, (1) a licensed attorney; (2) a certified public accountant; and (3) an insurance agent, adjuster, broker, limited representative, or other business entity licensed under Article 33 of GS Chapter 58.

    Makes it unlawful to act as a community association property manager, directly or indirectly engage in the business of community association property management, hold self out to be a community association property manager, or use the title Licensed Community Association Property Manager on or after October 1, 2017, without being licensed by the Commission. Prohibits issuing a license to a partnership, association, corporation, limited liability company, or other business entity. Prohibits a licensee from exercising control over the reserves or investment accounts of a community association or an operating account of a community association unless specified conditions are met. Also prohibits a licensee from giving legal or financial advice. Requires community association property managers to be covered by a fidelity bond or an insurance policy of at least $20,000. Sets out further bonding requirements. Requires contracts to provide community association property management services be in writing and provide that the contract (1) expires in one year but allows for continuation on a month-to-month basis, (2) contains an escape clause, and (3) contains a notice of cancellation with proper notice before the contract expires and before contract renewal. Requires community associations to register with the Commission annually and sets out information that must be provided. Requires a $100 registration fee. Requires that the community association make any corrections or modifications to the original information provided in the registration to the Commission within 15 days from the date of the need for the change. Requires a board member to complete at least four hours of education on the laws related to community associations, as specified, within 60 days after election to a community association's executive board. Specifies that the education is to be provided by the Commission, and permits the Commission to provide an online education course to meet the requirements. Requires the community association to pay the $75 fee for the course for each individual board member taking the course. 

    Amends GS 47F-3-103 (concerning executive board members of a planned community) and GS 47C-3-103 (concerning executive board members of a condominium) to require a member elected to the executive board of a planned community or condominium who fails to comply with the educational requirement provided in new GS 93A-104 (described above) to submit a written notice of resignation to the board. Establishes that failure of a member to resign is a breach of the duty of good faith to the association and subjects the member to discipline pursuant to GS 47F-3-107.1 or GS 47C-3-107.1, and subsection (b) of GS 47F-3-103 or GS 47C-3-103, as applicable.

    Effective October 1, 2017.