1.3 Provisional Brokers and Broker-in-Charge Supervision

One License, Three Statuses

North Carolina issues a single license type — broker — but a broker can occupy one of three operational statuses:

The key insight: removing "provisional" (via 90 hours of post-licensing) lets a broker operate independently, but it does not by itself authorize supervising others or holding client money. Those powers require the separate BIC designation.

What Triggers a BIC Requirement

A broker must be designated as broker-in-charge of an office whenever that office:

• Has one or more other brokers affiliated with it, OR
• Maintains a trust or escrow account for clients' money, OR
• Engages in property management that collects rents/funds, OR
• Acts as a firm (a licensed entity must designate a BIC).

A sole broker working alone with no trust account and no other affiliated brokers can be "BIC-eligible" without actually being designated, but the moment any of the above triggers occur, a designated BIC is mandatory.

Becoming a Broker-in-Charge

To be designated as a BIC, a broker must meet every condition below:

A broker who has the experience and 12-hour course but has not been designated for an office is called BIC-Eligible. BIC-Eligible status can lapse if the broker fails to maintain the required education, which is why the annual BICUP is essential.

Trap: Two years of experience alone does not make someone a BIC, and finishing the 12-hour course alone does not either. All conditions — active non-provisional status, the experience, the course, and an actual designation for an office — must be met together.

Why the BIC Matters for Provisional Brokers

A provisional broker can only be supervised by a BIC — never by an ordinary active broker, no matter how experienced. If the office's BIC resigns, dies, or is removed, the provisional brokers there cannot perform brokerage activity until a new BIC is designated. This is the most common supervision fact tested.

Exam Tip: When a question describes a busy active broker "training" a new licensee, check whether that trainer is actually a designated BIC. If not, the supervision is invalid and the provisional broker may not lawfully practice.

Broker-in-Charge Duties

The BIC bears personal, named responsibility for compliance at the office. NCREC holds the BIC accountable even for acts of affiliated brokers that proper supervision should have prevented. Core duties under 21 NCAC 58A include:

1. Trust-account oversight — opening, maintaining, and reconciling the firm's trust/escrow accounts and ensuring deposits are timely.
2. Advertising review — ensuring all advertising identifies the firm and is not false or misleading (no "blind ads").
3. Disclosure compliance — confirming agency disclosure (the Working With Real Estate Agents Disclosure) and the Residential Property and Owners' Association Disclosure Statement are delivered properly.
4. Supervision — overseeing provisional brokers, reviewing their transactions, and confirming they remain affiliated and qualified.
5. Record retention — keeping transaction and trust records for at least three years from the later of closing or termination of the agreement.

One BIC per Office; Limits on Multiple Designations

Each office location must have one designated BIC physically able to supervise. A broker may generally serve as BIC of only one office at a time; NCREC grants exceptions only in limited circumstances (for example, temporary coverage or closely related offices) and the BIC must still provide adequate, reasonable supervision. A branch office likewise needs its own designated BIC and must be registered with NCREC.

Trap: A single person cannot freely be the BIC of several busy offices simultaneously. The general rule is one office; "the same person can be BIC of unlimited locations" is a wrong-answer distractor.

Changing Firms / Affiliation

When a broker leaves a firm, the affiliation with that firm's BIC ends, and the broker's license effectively becomes inactive for practice until re-affiliated. The steps:

1. The departing broker (and the former BIC) update the firm/BIC affiliation with NCREC.
2. The new BIC files to add the broker to the new firm.
3. A provisional broker may not perform brokerage activity in the gap between leaving one BIC and being accepted by another.
4. Pending transactions and any held trust funds must be reconciled — trust money belongs to the firm/clients, not the departing broker.

All of this is handled through NCREC's online licensing system, and the broker is responsible for confirming the affiliation is recorded before resuming work.

Exam Tip: Trust funds never travel with a departing broker. The earnest money stays with the firm holding it (or is disbursed per the contract), and the BIC of that firm remains responsible for it until properly disbursed.