North Carolina § 93A-17 - Grounds for payment; notice and application to Commission.

§ 93A-17. Grounds for payment; notice and application to Commission.

An aggrieved person who has suffered a direct monetary loss by reason of the conversion of trust funds by any licensed real estate broker shall be eligible to recover, subject to the limitations of this Article, the amount of trust funds converted and which is otherwise unrecoverable provided that: The act or acts of conversion which form the basis of the claim for recovery occurred on or after September 1, 1979; The aggrieved person has sued the real estate broker in a court of competent jurisdiction and has filed with the Commission written notice of such lawsuit within 60 days after its commencement unless the claim against the Real Estate Education and Recovery Fund is for an amount less than three thousand dollars ($3,000), excluding attorneys' fees, in which case the notice may be filed within 60 days after the termination of all judicial proceedings including appeals; The aggrieved person has obtained final judgment in a court of competent jurisdiction against the real estate broker on grounds of conversion of trust funds arising out of a transaction which occurred when such broker was licensed and acting in a capacity for which a license is required; and Execution of the judgment has been attempted and has been returned unsatisfied in whole or in part. For the purposes of this Article, the term "trust funds" shall include all earnest money deposits, down payments, sales proceeds, tenant security deposits, undisbursed rents and other such monies which belong to another or others and are held by a real estate broker acting in that capacity. Trust funds shall also include all time share purchase monies which are required to be held in trust by G.S. 93A-45(c) during the time they are, in fact, so held. Trust funds shall not include, however, any funds held by an independent escrow agent under G.S. 93A-42 or any funds which the court may find to be subject to an implied, constructive or resulting trust. For the purposes of this Article, the terms "licensee" and "broker" shall include only individual persons licensed under this Chapter as brokers. The terms "licensee" and "broker" shall not include a time share developer, time share project, independent escrow agent, corporation or other entity licensed under this Chapter. Upon the termination of all judicial proceedings including appeals, and for a period of one year thereafter, a person eligible for recovery may file a verified application with the Commission for payment out of the Real Estate Education and Recovery Fund of the amount remaining unpaid upon the judgment which represents the actual and direct loss sustained by reason of conversion of trust funds. A copy of the judgment and return of execution shall be attached to the application and filed with the Commission. History (1979, c. 614, s. 1; 1983, c. 81, ss. 2, 14; 1987, c. 516, s. 6; 1999-229, s. 8; 2000-140, s. 19(b); 2005-395, s. 14; 2011-217, s. 11.) Effect of Amendments. - Session Laws 2005-395, s. 14, effective April 1, 2006, substituted "real estate salesperson licensed before April 1, 2006, or by any licensed real estate broker" for "real estate broker or salesperson licensed under this Chapter" in subsection (a); substituted "brokers or individual ... 'salesperson' shall" for "brokers and salespersons and shall" in subsection (c). Session Laws 2011-217, s. 11, effective January 1, 2012, in the introductory paragraph of subsection (a), deleted "a real estate salesperson licensed before April 1, 2006, or by" following "conversion of trust funds by"; in subdivisions (a)(2) and (a)(3), deleted "or salesperson" following "real estate broker"; in subdivision (a)(2) and in the last paragraph of subsection (a), substituted "Real Estate Education and Recovery Fund" for "Real Estate Recovery Fund"; in subdivision (a)(2), substituted "attorneys' fees" for "attorneys fees"; in subdivision (a)(3), deleted "or salesperson" following "such broker"; in the last paragraph of subsection (a), deleted the former last sentence, which read: "The applicant shall serve upon the judgment debtor a copy of the application and shall file with the Commission an affidavit or certificate of such service"; and rewrote subsection (c), which was the definition for "'licensee,' 'broker,' and 'salesperson'."