Can you own a controlling interest in a real estate company if you're not licensed in NC?
Assuming you have a BIC in place as a manager/officer of the company, and all transactions are done through the oversight of the BIC.
I can't find clarification on this anywhere.
From my previous experience in Florida, the law was that you can own a real estate company if you're NOT licensed, or if you're a Broker. However, licensed sales associated were prohibited by law to have any interest in ownership of a real estate company (because of the conflict of interest, a broker would be subject to the ownership, whom the broker manages). My thinking is that there is probably a similar law here in NC, but I am unable to find it.
Please help, thank you!
Yes you can do that. You will need a firm license and disignate qualifying broker as well as broker in charge. Those can be the same person.
You can find more info on the commission website (https://www.ncrec.gov) under Licensing > Firm License
Thank you @Jiri B. Very helpful.. What's the difference between a qualifying broker and BIC?
I was on this path once.
When you say "a real estate company" I assume that you mean "a real estate brokerage firm". Big difference. The firm application is here: https://www.ncrec.gov/Forms/Applications/FirmLicenseApp.pdf
The way NC REC rules work (as opposed to NC statutes in Chapter 93A) are spelled out in 21 NCAC 58A.0502 entitled FIRM LICENSING. The specific wording is: "For purposes of this Rule, the term "principal," when it refers to a person or entity, means any person or entity owning 10 percent or more of the business entity, or who is an officer, director, manager, member, partner, or who holds any other comparable position." Bolding emphasis is mine.
So your selected broker can be an owner (10% or more) as a member or member/manager or a non-owner manager in your company. And that broker can only be affiliated with your firm. You can't 'borrow' a BIC. If your broker leaves, then your firm will not be in compliance and that may (if you can't get another BIC) impact your business.
If your plan is to buy a brokerage franchise, please let us know if they balk at your request. When I tried to buy a brokerage franchise, as an unlicensed majority owner, the franchise said 'no' because they required franchise owners to be licensed and owner/operators.
@Chris Martin I wish we met earlier. I did buy a franchise, however, I got it at insane price and had a limited time to make a decision. I could probably still sell it if I needed to.
To clarify one thing here, it was my understanding that in NC there was no limit to the amount of companies that a BIC can manage, as long as they're registered at the same address. NC seems to have this antiquated brick-and-mortar model, but they do not cap the number of brokerages that can be registered at that address. So, for instance, my company is going to focus on management, the BIC has a buy/sell enterprise, and they're both based in the same office. We're basically the Property Management extension of her existing agent business. It's not a conflict of interest for the BIC since they operate two different areas of real estate business. I think I've covered my bases here..
I don't know the rules that well. After all , I am not a licensed broker. I did take the class, though, but that was 15 years ago. I just go what I see written, and I may miss exemptions and exceptions in other documents.
In this NCREC document, it says (page 13) "No broker shall be broker-in-charge of more than one office at a time. If a firm shares office space with one or more other firms, one broker may serve as broker-in-charge of each firm at that location." So I think that is what you are doing....