The Ways a Real Estate Agent Can Lose Their License in North Carolina
Few things are more disruptive to a real estate professional’s career than receiving notice of a complaint from the North Carolina Real Estate Commission (“Commission”). Whether a matter arises from a consumer complaint, a transaction gone awry, or a Commission-initiated investigation, the central question is always the same: has the broker violated the North Carolina Real Estate License Law or the Commission’s rules?
The Commission’s disciplinary authority is governed primarily by N.C. Gen. Stat. § 93A-6, which authorizes the Commission to investigate alleged misconduct and, where appropriate, impose discipline ranging from reprimand to suspension or revocation of a real estate license. While many matters begin with consumer dissatisfaction, the Commission may only impose discipline when the evidence supports a statutory or regulatory violation.
Below are some of the most common ways real estate agents and brokers face discipline in North Carolina—and how these issues typically arise in practice.
Making Substantial Misrepresentations or False Promises
One of the most common grounds for discipline under § 93A-6 is misrepresentation or the making of false promises in connection with a real estate transaction.
This may include providing inaccurate information about a property’s characteristics—such as condition, square footage, zoning status, permitted use, or other material aspects—or making assurances regarding future value, rental income, or development potential that are not reasonably supported by facts. While the statute does not list specific examples, the Commission routinely evaluates whether a broker’s statements were material and whether they had the capacity to mislead a reasonable buyer or seller.
Importantly, misrepresentations need not be formal or written. Emails, text messages, advertising, and verbal statements may all form the basis for discipline if they are inaccurate and relied upon by a consumer.
Failing to Disclose Material Facts in Circumstances Giving Rise to Misrepresentation
North Carolina is generally a caveat emptor (“buyer beware”) state, and brokers do not have a blanket statutory duty to affirmatively disclose every defect or condition affecting a property. However, discipline may arise when a broker’s failure to disclose information constitutes a misrepresentation or omission of a material fact under § 93A-6.
In practice, the Commission frequently scrutinizes situations in which a broker’s silence, partial disclosure, or selective disclosure renders other statements misleading. Issues involving known structural problems, water intrusion, environmental conditions, or prior damage may give rise to discipline when the broker’s conduct creates a false impression or conceals information necessary to prevent deception.
A broker may not avoid responsibility by claiming neutrality or by deferring to a seller’s desire not to disclose information where the broker’s conduct results in a misleading representation to a consumer.
Acting for More Than One Party Without Knowledge and Consent
Section 93A-6 expressly authorizes discipline when a broker acts for more than one party in a transaction without the knowledge and consent of all parties.
Disciplinary cases often involve failures to properly disclose agency relationships, to obtain the required consent for dual or multiple representation, or to address conflicts that arise during the course of a transaction. While these violations may begin as paperwork or disclosure issues early in a deal, they frequently become significant when disputes later develop between buyers and sellers.
Improper Handling of Trust or Escrow Funds
Mishandling trust or escrow money is among the most serious violations under the Real Estate License Law. Section 93A-6 authorizes discipline for failing, within a reasonable time, to properly account for or remit monies belonging to others.
This category includes conduct such as commingling trust funds, failing to timely deposit or disburse earnest money, maintaining inaccurate trust account records, or permitting unauthorized access to trust accounts. Notably, intent is not always required; poor recordkeeping or administrative errors alone may result in disciplinary action.
The Commission expects strict compliance with trust account requirements, and routine audits frequently uncover violations even when no consumer has suffered financial harm.
Dishonest, Fraudulent, or Untrustworthy Conduct
The Commission has broad authority to discipline brokers who engage in improper, fraudulent, or dishonest dealing, or whose conduct demonstrates a lack of honesty or integrity.
Examples include falsifying or altering documents, forging signatures, misrepresenting licensure status, providing false information to clients or other parties, or otherwise engaging in deceptive practices. Conduct need not occur within the confines of a single transaction if it reflects adversely on a broker’s trustworthiness or fitness to practice.
Demonstrating Incompetence or Unfitness to Act as a Broker
Brokers are expected to exercise reasonable skill, care, and diligence in their professional activities. Section 93A-6 authorizes discipline where a broker is shown to be incompetent or unworthy to act in a manner that endangers the public interest.
This may include patterns of repeated errors, failure to understand or comply with basic transactional requirements, missed deadlines, or the consistent provision of incorrect or misleading advice. Even absent fraud or bad intent, repeated deficiencies in practice may lead the Commission to conclude that a broker is unfit to hold a license.
Violating the Real Estate License Law or Commission Rules
The Commission may discipline brokers for violating any provision of Chapter 93A or the administrative rules adopted by the Commission.
Common examples include failure to properly supervise provisional brokers, advertising violations, failure to maintain required records, practicing without appropriate licensure authority, or noncompliance with continuing education requirements. These violations are frequently charged alongside other substantive allegations.
Failing to Respond to Commission Inquiries or Cooperate with Investigations
Many disciplinary matters are significantly aggravated by a broker’s failure to engage with the Commission’s investigative process. Ignoring correspondence, missing deadlines, failing to produce requested records, or otherwise failing to cooperate may itself constitute a violation of Commission rules or evidence of unfitness to practice.
Even where the underlying complaint lacks merit, a broker’s failure to respond appropriately can bolster disciplinary action and negatively influence the Commission’s assessment of the agent.
Criminal Convictions Reflecting Unfitness to Practice
Section 93A-6 authorizes discipline based on certain criminal convictions, particularly those involving fraud, theft, dishonesty, or breach of trust. In evaluating such cases, the Commission considers the nature of the offense, its relationship to real estate practice, the amount of time that has passed, and any evidence of rehabilitation.
Criminal conduct occurring outside the course of real estate practice may still support discipline when it bears directly on a broker’s honesty, integrity, or fiduciary responsibility.
Protecting Your Real Estate License in North Carolina
Disciplinary cases before the North Carolina Real Estate Commission often involve multiple overlapping allegations, and early missteps—particularly inaccurate statements or failure to meaningfully participate in the investigative process—can have lasting consequences.
Many real estate agents assume these matters can be resolved informally or without legal guidance. In reality, statements made early in an investigation frequently shape the Commission’s view of the case long before any formal hearing occurs.
Understanding how N.C. Gen. Stat. § 93A-6 is applied, and how the Commission evaluates conduct in practice, is critical to protecting your license, your reputation, and your livelihood. If you are facing a complaint or investigation by the North Carolina Real Estate Commission, consulting with a law firm like Brooks Peterson PLLC can help you navigate the process strategically and protect your ability to continue practicing your profession. Call or schedule an appointment today at (919) 616-3317.
This is not legal advice. If you do need legal representation call the office at: (919) 616-3317