Rules for Licensees: Advertising, Offices, Escrow & Discipline

This area covers advertising, broker offices and pay, other people's money, prohibited conduct, and discipline.

Advertising

• A brokerage advertises only under the business name designated on its license.
• A salesperson's or associate broker's ad must show the employing broker's business name and telephone number, in equal size. A nickname may be advertised only if it is on the licensure or renewal application.
• A licensee selling or leasing his own property discloses that he is a licensee in the ads (unless it is listed with a real estate company) and tells the buyer or tenant before an agreement is signed.
• No advertising or soliciting without the authority of the seller or the seller's agent, and no sign without the owner's written consent.
• "Sales volume" claims count only closed transactions (fully executed deed delivered); market-position claims name the municipality; office counts include only licensed branch offices.
• Prize or gift promotions state each prize, the prerequisites, limits, the fair market value (not suggested retail price) and the odds, in print the same size as the prize description. Records list winners and respondents who got nothing.
• Misleading ads, or using the insignia of an association the licensee does not belong to, are prohibited. Ads promoting a school the company owns an interest in must disclose that ownership.

Soliciting an owner so often that it amounts to clear harassment is prohibited. Trying to cause panic selling to profit from it is treated as bad faith, and systematic solicitation of listings is sufficient, but not conclusive, evidence of it.

Broker and salesperson relations

• Office: a fixed office with an outside sign showing the licensed brokerage name, devoted to real estate business and arranged for privacy. An office in a home needs a separate entrance.
• Licenses are kept at the main office; each branch keeps a list of its licensees.
• Branches: a branch office license comes first, before opening. Each office is supervised by the broker or an associate broker, who may supervise more than one office. A branch may not be run for an employee's sole benefit.
• Affiliation and supervision: a salesperson practices only in affiliation with a broker, and "employ" includes independent contractors. A broker who fails to supervise adequately commits a violation. A salesperson may assist in property management under the broker's supervision but may not independently negotiate or sign a lease.

If a sole-proprietor broker dies, the estate notifies the Commission within 15 days of the broker appointed to wind down the business. No new listings or hires; unexpired listings expire 90 days after the death; pending sales may close. When a broker of record dies, a new one is designated within 15 days.

Funds and accounts

• A salesperson promptly turns any deposit over to the employing broker. The parties may agree in writing to have someone other than the brokers hold a deposit, but never a salesperson, associate broker or qualified association.
• The broker deposits it by the end of the next business day after receipt. With written permission of both parties, a check given with an offer may be held uncashed until acceptance and then deposited within one business day; if the offer is rejected, the check goes back uncashed.
• The escrow account is in a federally or state-insured bank, names the broker as trustee, allows withdrawal without prior notice and is used only for escrow.
• No commingling, except the broker's own money to cover bank service charges or a required minimum balance. Misappropriation is prohibited even if repaid. Interest follows the principal pro rata.
• Money stays in escrow until settlement, an undisputed termination (or one covered by a prior written agreement), written instructions signed by all parties, or a final, unappealable court order. A partial release requires written notice of what was paid, to whom, and what remains.
• In a dispute the broker holds the money; if resolution looks remote, the broker may after 30 days' notice to the parties, ask the county court to interplead the claimants.
• Rents collected for a lessor go into a separate rental management account, not escrow. A security deposit is paid over when the tenancy ends.
• Transaction records are kept 3 years and escrow records must be available to the Commission immediately on proper demand. The escrow duty cannot be waived by any agreement.

Prohibited conduct

• substantial misrepresentation, false promises, and acting for more than one party without everyone's written consent;
• not giving every signer a copy at execution, or a listing with no definite end date free of prior notice;
• inducing someone to break a contract for the licensee's gain, or buying a property listed with the office without written disclosure to the owner;
• undisclosed commissions or rebates (a property manager needs the lessor's written consent to profit on expenditures);
• conduct showing bad faith, dishonesty, untrustworthiness or incompetency, and assurances the licensee should know are improbable;
• a conviction of, or guilty or nolo contendere plea to, fraud-type crimes or any felony;
• violating Commission rules, a required disclosure, or the Human Relations Act, such as accepting a discriminatory listing;
• discipline by another state, although the Commission may not fine on that basis alone.

Suspension and revocation

The Commission may refuse, suspend or revoke a license, impose fines, or both, including when the license was obtained by false representation. A suspended broker returns the license and posts the Commission's notice near the public entrance of every office; branch licenses terminate automatically. Continuing to do business while suspended or revoked, or employing a salesperson whose license is suspended, is a criminal offense. Absent a Commonwealth Court order, revoked licensees may reapply only after five years and must meet every current requirement, including the exam. For an initial discrimination complaint, the Commission first allows the Human Relations Commission up to 90 days to act.

Where this shows up on the exam

Regulations Governing the Activities of Licensees is 11 of the 40 scored State items (Pearson VUE outline effective March 16, 2026), the largest State area. Expect advertising scenarios, the next-business-day escrow rule, disputes, and who may pay a salesperson.

Sources

North Carolina law as published by the General Assembly and the Office of Administrative Hearings, checked 2026-11-05:

• 63 P.S. § 455.201
• 63 P.S. § 455.303
• 63 P.S. § 455.501(c)
• 63 P.S. § 455.601
• 63 P.S. § 455.604
• 63 P.S. § 455.606.1(a)(14)
• 63 P.S. § 455.608.5
• 49 Pa. Code §§ 35.242–35.245, 35.252–35.253
• 49 Pa. Code §§ 35.282–35.291
• 49 Pa. Code §§ 35.301–35.308
• 49 Pa. Code §§ 35.321–35.328
• Pearson VUE PA Real Estate Content Outlines #093901 (03/2026)