State Compliance
North Carolina publishes its discipline in more detail than any state we researched — names, dates, and exact findings. That makes NCREC cases the clearest picture anywhere of how trust accounting actually fails.
Updated 2026-08-05 · TrustRecon research team
The North Carolina Real Estate Commission publishes disciplinary actions with unusual specificity: firm names, effective dates, and itemized findings. Our detection rules draw on NCREC records more than any other single source, because they show precisely which failures examiners find and how they stack. Every case below is real, recent (2023–2026), and named in public records.
NCREC requires the account title — on the bank's records, not just your label in Buildium — to contain the words "trust" or "escrow." Two recent findings:
Note the pattern in the Hernandez case: titling was one of five findings. Examiners rarely find one violation — a mislabeled account signals a firm that hasn't read the rules, and the rest of the audit proceeds accordingly.
Client funds must reach the trust account within three banking days of receipt. The NCREC record includes a license revoked over a single $2,000 rent check deposited into a personal account, and Allison & White Property Management (Hickory, effective March 2026), found to have deposited prepaid rent into the operating account, never entered it in the tenant ledger — and then failed to hand it to the successor manager, leaving the tenant showing delinquent on rent they had already paid.
Operating without any trust account at all is its own category: Equity North Carolina Real Estate LLC (Matthews, February 2026) was reprimanded for taking deposits and rent with no trust account and sitting on the funds for six months; Jerry Wojenski (Huntersville, December 2025) drew a 12-month suspension for the same core failure.
North Carolina gives you 30 days to move earned management fees from trust to operating. Leaving them longer is commingling — even when the motive seems protective. In Carolina United Realty LLC (Charlotte, December 2023), after an employee embezzled from the trust account, the firm left its own management fees in trust to cover the hole. NCREC's finding: the patch itself "caused commingling." You cannot fix a shortage by donating your own money into the pool; you fix it by funding the shortage, documenting it, and reporting what happened.
NCREC's case studies document a firm that posted "one amount representing all deposits for the day, another representing all withdrawals." No trial balance could be generated; the trust account carried a "significant shortage"; remediation failed and discipline followed. The same records describe the diagnostic every examiner runs: software that tracks receivables rather than cash makes owner statements show negative balances, and comparing the owner ledger trial balance against the bank statement exposes the gap immediately.
Related NCREC math: a broker-in-charge paid a $1,000 water heater bill for an owner whose ledger held $200. The trust account's total balance was $50,000, so nothing bounced — the $800 came from other owners' funds, invisible to two-way reconciliation, caught only by the three-way check. And fees may only be taken on money actually collected: disbursing a $15 late fee to the broker when the tenant never paid it is a cited violation.
NCREC's "Ten Most Common Mistakes" bulletin, mistake #6: managing ten owners' associations requires ten separate trust accounts. Pooling association reserves into one account is structural commingling even with clean internal sub-ledgers — one association's shortfall silently borrows from another's reserves, and a bank failure exposes every association at once. (Mistake #3 from the same bulletin: bank fees must never be absorbed by the trust account — fund a small operating-money buffer, book fees against broker equity.)
Rule 58A.0117 requires records to be producible whenever the Commission asks. Steven Eric Beam (Charlotte, May 2024) stopped doing property management, kept no copies of his trust and transaction records, and could not support a Commission audit. Three-year suspension. The obligation survives the business line: ceasing property management does not cease the record duty.
Two cases define the supervision standard:
That second case is the whole argument for independent verification in one paragraph: the person who makes the entries can also make the worksheets, and a signature on top verifies nothing. Wanda R. Tate (Ocean Isle Beach, November 2024) rounds out the picture — no property ledger, no trial balance, revenue and fees misreported, expenses run through operating instead of trust: nine-month license surrender.
The full list of what examiners request is in our 24-point audit checklist. If the Cox and embezzlement cases above describe a risk you can't currently rule out — entries and verification done by the same hands — that independent check is exactly what our free audit performs on your actual Buildium or AppFolio exports.
Upload three exports. Within 48 hours you get a discrepancy report with every finding tied to a record ID. Built from the same failure patterns state auditors look for.
For property management companies on Buildium or AppFolio. No call required.