What are the penalties for practicing without an Active license?
Holding a license number from the North Carolina Real Estate Commission (NCREC) is only half the battle; that license must be on Active Status to legally practice brokerage. Engaging in any brokerage activity—from listing a home to collecting a commission—while your license is Inactive or Expired is a serious violation. What are the legal and financial penalties for practicing real estate without an active license in North Carolina?
The penalties are severe, designed to deter unlicensed practice and protect the public. They can result in professional discipline, financial penalties, and criminal charges.
The Three Levels of Penalty
- NCREC Disciplinary Action (License Revocation/Suspension):
- Action: The NCREC can take immediate disciplinary action against your license, even if it’s currently Inactive or Expired. This action includes suspension or revocation of your license and substantial fines (up to $5,000 per violation).
- Impact: If your license is revoked, your ability to practice real estate in North Carolina—and potentially any reciprocal state—is terminated, requiring a lengthy process to reapply (if allowed at all).
- Criminal Charges (Class 1 Misdemeanor):
- Action: Practicing brokerage without a license (or while Inactive/Expired) is classified as a Class 1 Misdemeanor under NC General Statutes $\S$ 93A-2.
- Impact: This means you could face arrest, a criminal record, and potential jail time, depending on the severity and frequency of the violation.
- Forfeiture of Compensation:
- Action: You are legally prohibited from collecting or receiving any commission, fee, or compensation for brokerage services performed while your license was Inactive or Expired.
- Impact: Even if you successfully close the deal, your supervising Broker-in-Charge (BIC) cannot legally pay you, and the client may have the legal right to void the contract.
The BIC’s Shared Liability
The penalty for non-compliance is often shared. The Broker-in-Charge who fails to ensure that their affiliated Provisional Broker (PB) holds an Active license before practicing can also face disciplinary action, including suspension of their own BIC status and fines.
Key Takeaway
Practicing real estate with an Inactive or Expired NC License is illegal, potentially leading to a Class 1 Misdemeanor charge and severe NCREC disciplinary action (fines up to $5,000 and license revocation). Always ensure your license status is Active and your Continuing Education (CE) is current before engaging in any brokerage activities.