Appraisal Section Legislative & Regulatory Update – October 2021

Legislative Update

State Budget Negotiations

Budget negotiations started the week of September 27 between Governor Roy Cooper, Senate Leader Phil Berger, and House Speaker Tim Moore, the three most powerful politicians in North Carolina.  The pressure is on to pass a full state budget, since Gov. Cooper and the Republican-controlled legislature did not agree on a full state budget in 2019 or 2020.  This year’s budget will likely include raises for state employees and teachers, broadband expansion and tax cuts. Besides negotiations and differences with Cooper, Moore and Berger continue to have differing opinions on priority issues in the budget.

The process this year is different since the General Assembly will negotiate with the Governor prior to sending him the budget. Hopefully in an attempt to work out differences so that the budget will not be vetoed.

Short Term Rental

• A technical correction that would restore to homeowners much needed legal protection from rental bans and restrictions is included in the House version of the budget.
• State law previously provided essential stability for home buyers by preventing local governments from regulating major sources of rental income out of existence. It also prevented local governments from enacting overly burdensome regulations on rental housing, including charging owners a fee to rent their own property.
• In 2019, the General Assembly reorganized North Carolina’s land use statutes with the explicit intent and promise not to make substantive changes in the law. Instead, an important substantive change was made. Due to the change, homeowners who financially planned on rental income are no longer protected from significant losses due to local ordinances.
• NCR’s advocacy efforts have been focused on asking legislators to affirm the General Assembly’s original intent to safeguard homeowners and property rights by supporting the change in Section 5.15(a) of the House version of the budget by returning GS 160D-1207(c) to the General Assembly’s previous policy.

Regulatory Updates

NC Real Estate Commission

Update Courses

• A diverse group with a range of experience was selected to look at update courses.
• The group includes private and public providers, BICs, education directors, etc. The topics will be presented during the October meeting.

Annual Rulemaking Proposals

The Commission briefly discussed potential rulemaking proposals. The proposals, shown below, will be fully discussed during their October meeting.

• BIC course change to make it a distance course.
• Reduce or repeal the 40% rate of the licensee performance report for the last previous two years.
• Prohibit property owners from requiring a driver license (staff does not support this nor do they have right to tell property owners that they can’t do this).
• Rule concerning loves letter discussed at March meeting.
• Make general update and BIC-up into one course,
• Allow buyers a free look before submitting a due diligence fee.

North Carolina Appraisal Board

Appraisal Foundation Report

• The Appraisal Qualifications Board adopted changes to the real property criteria.
• Approving synchronous courses – live classes done remotely.
• Acceptance of these course is more in line with classroom courses.
• This will have an impact on Rules.

Racial Biases

A working group was recently formed to address racial biases.

• Working group includes:
  • NC Housing Finance Agency
  • NC Credit Union League
  • NC Human Relations Division
  • NC Commissioner of Banks
  • NC Real Estate Commission
  • Office of Administrative Hearings Housing Division
• Staff recently hosted a training session, they are working on a virtual training session for Board members.

North Carolina Home Inspector Licensure Board

Pay to Play

• This issue continues to be a topic of discussion.
• One topic of concern is real estate companies putting fees on home inspectors to come into their business.
• The other issue is regarding an inspector paying for a realtor’s meal.
• Legal guidance has been requested for this issue.
• A proposed statutory change was discussed and will be addressed during a future Board meeting.

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